Unexplained income under tax law cannot be sustained without evidence of receipt or possession; addition deleted.

Addition under Section 69A was found unsustainable where revenue failed to prove receipt or possession by the assessee: the AO relied on a third party Resolution Professional report without independent evidence linking receipts from multiple investors to the assessee, produced no bank or date/mode of transaction particulars, and did not file a remand/clarification report despite requests. The appellate authority's acceptance of a charge was insufficient in the absence of evidentiary foundation; accordingly the addition was deleted for want of proof and the revenue's claim failed.

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Issues: Whether the addition of Rs. 59,18,00,000/- made by the Assessing Officer as unexplained money under Section 69A of the Income-tax Act, 1961 can be sustained in the absence of evidence establishing receipt/possession of the amount by the assessee and in view of absence of remand/clarification report from the Assessing Officer.

Analysis: The Tribunal examined the materials placed before the Assessing Officer and the appellate authority, including the report relied upon by the Assessing Officer (Resolution Professional's report before NCLT) and documents submitted by the assessee such as resignation letters, communication with the Registrar of Companies, and confirmations from the employer. The Assessing Officer failed to produce particulars demonstrating that the amounts alleged to have been received from 636 investors were in the assessee's possession during the relevant year, and did not furnish a remand report or bank account particulars despite repeated calls by the CIT(A). The Tribunal noted that mere reliance on the RP's report without independent evidence connecting the alleged receipts to the assessee, and without proof of mode, dates or bank transactions, is insufficient to establish the assessee's ownership or possession of the funds for application of Section 69A. The appellate authority's finding that the question of proving innocence arises only after a charge is established was considered in light of the lacunae in the assessment evidence. The Tribunal found no material to disturb the reasoned conclusion of the CIT(A) that the addition could not be sustained where the revenue had not discharged the evidentiary burden and had not filed the remand/clarification report called for during appellate proceedings.

Conclusion: The addition of Rs. 59,18,00,000/- under Section 69A of the Income-tax Act, 1961 is unsustainable and is deleted; the revenue's appeal is dismissed (decision in favour of the assessee).

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