Rotation of funds via bank auto sweep accepted as source; addition under unexplained credits provision deleted on evidentiary review.

Appeal concerns deletion by the CIT(A) of an addition under Section 69A read with Section 115BBE where the appellate authority accepted the assessee's explanation that credited sums arose from rotation of funds via the bank's auto sweep/fixed deposit facility and from retirement benefits. The authority reviewed bank statements, joint account records and retirement benefit documents to assess admissibility and whether the assessee discharged the evidentiary burden to establish genuineness and source; it concluded the assessing officer had not adequately verified transaction patterns and upheld deletion, setting aside the challenged addition.

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Issues: (i) Whether the order of the CIT(A) deleting the addition of Rs. 1,55,34,265/- made under Section 69A read with Section 115BBE of the Income-tax Act, 1961, by accepting the explanation of rotation of funds due to the bank's auto sweep facility and retirement benefits as source, is sustainable.

Analysis: The appellate authority examined bank statements, documents regarding retirement benefits, and evidence showing joint accounts and recurring debits and credits attributable to an auto sweep/fixed deposit facility. The appellate authority evaluated whether the assessee discharged the evidentiary burden to demonstrate genuineness and source of the credited amounts, and whether the assessing officer had properly analysed and verified the transaction pattern before making additions under the cited provisions. The appellate authority also considered the admissibility and relevance of retirement benefit documents and joint account records in establishing source and nature of transactions.

Conclusion: The deletion of the addition is upheld and the addition made under Section 69A read with Section 115BBE of the Income-tax Act, 1961 is not sustained; the assessing officer's order is set aside in respect of the challenged addition.

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