Unexplained money under Section 69A: bank entries and lender declarations can discharge the explanation requirement, reversing the addition.

Addition under Section 69A was deleted where the assessee produced contemporaneous bank statements, identity proofs and signed declarations from alleged lenders; the documentation identified lenders and explained multiple small receipts as loans, addressing the statutory requirement to satisfactorily explain unexplained money and thereby negating the basis for the cash-credit addition. The material was treated as sufficient corroborative evidence to discharge the onus of explanation and the assessment adjustment was set aside.

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Issues: Whether the addition of Rs. 1,23,383 made u/s. 69A of the Income-tax Act, 1961 for unexplained money can be sustained where the assessee produced bank statements, identity proofs and declarations from alleged lenders explaining the receipts as small loans received through banking channels.

Analysis: The recorded receipts consist of multiple small transactions in the assessee's bank account during the relevant period. The assessee furnished the bank passbook/statement showing the transactions, identity documents of the alleged lenders and signed declarations from those lenders explaining the nature of the receipts as loans. The documentary material was examined in the light of the statutory provision for unexplained money under Section 69A of the Income-tax Act, 1961 and the requirement that the nature and source of cash credits or receipts be satisfactorily explained by the assessee. The evidence shows contemporaneous banking entries and corroborative declarations identifying lenders and amounts, which address the statutory concern regarding source of funds.

Conclusion: Addition of Rs. 1,23,383 made u/s. 69A of the Income-tax Act, 1961 is deleted; the assessee's explanation of the receipts as small loans supported by bank entries, identity proofs and declarations is accepted and the ground of appeal is allowed.

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