Unexplained bank credits rejected where agricultural receipts and other sourced deposits were substantiated by records and withdrawals.

Bank credits and cash deposits could not be treated as unexplained income where the assessee substantiated the sources through agricultural sale proceeds, bank interest, a transfer from the KCC account, loan repayment, a nominal transfer from the son's account, and cash deposits from past withdrawals and savings. Supporting landholding records and sale bills corroborated the agricultural receipts, and no contrary material showed undisclosed business or other income. On these facts, suspicion alone was insufficient to sustain the addition, which was therefore deleted.

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Issues: Whether the addition of bank credits and cash deposits as unexplained income was justified when the assessee explained the sources as agricultural receipts, transfer from KCC account, past withdrawals, savings, and loan repayment.

Analysis: The assessee furnished material showing that the credits comprised agricultural sale proceeds, bank interest, a transfer from the KCC account, repayment of an earlier loan, a nominal transfer from the son's account, and cash deposits sourced from past withdrawals and savings. The record also showed agricultural landholding and supporting sale bills. In these circumstances, the assessment could not rest merely on suspicion or on a blanket treatment of all bank credits as unexplained income, particularly when the sources were substantially corroborated and no contrary material established an undisclosed business or other income.

Conclusion: The addition of Rs. 46,74,238 as unexplained income was not sustainable and is deleted.

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