Unexplained income under section 69A deleted where ownership records, third party confirmations and cash flow proved source.

Where the Assessing Officer treated cash receipts as unexplained money under section 69A read with section 115BBE, the ITAT applied the principle that unexplained income cannot be sustained where the assessee furnished ownership records of agricultural land, certificate of agricultural income, third party confirmation letters with identity and PAN/Aadhaar details, and a cash flow statement, and where the Assessing Officer conducted no independent enquiry to contradict that evidence; absence of a written lease deed alone was held insufficient to sustain the addition, and the addition was deleted with the appeal allowed for the assessee.

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Issues: Whether the addition of Rs. 40,90,000 to the assessee's income as unexplained money under section 69A read with section 115BBE of the Income-tax Act, 1961, made by the Assessing Officer and confirmed by the Commissioner (Appeals), is justified where the assessee produced land ownership documents, confirmation letters from cultivators, PAN/Aadhaar details and a cash flow statement but did not produce written lease agreements.

Analysis: Relevant provisions include the Assessing Officer's power to treat cash deposits as unexplained money under section 69A read with section 115BBE, and the assessment procedure under section 143(3) read with section 144B of the Income-tax Act, 1961. The assessee produced ownership records of agricultural land, a certificate of agricultural income, confirmation letters from third parties with identity details and PAN/Aadhaar copies, and a cash flow statement showing receipts and deposits. The absence of registered or written lease agreements was contested, and the assessing authority relied on that absence to reject the claimed source. The evidence produced was not directly contradicted by independent enquiries or material from the Assessing Officer. Recognition of tenancy or lease for agricultural land under local tenancy practice may not require a written lease to establish agricultural receipts where credible third-party confirmations and supporting financial statements are furnished. A mere suspicion or demand for a lease deed, without conducting further enquiry to test the genuineness of the supplied evidence, is insufficient to treat the amounts as unexplained money.

Conclusion: The addition of Rs. 40,90,000 treated as unexplained money under section 69A read with section 115BBE is deleted and the appeal is allowed in favour of the assessee.

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