Unexplained share investment addition under section 69 reduced to estimated basis after banking evidence and supporting invoices

Share investment addition under section 69 was partly explained by purchase invoices, bills and banking-channel payments, with no material showing cash payment or cash receipt against cheques. On those facts, the Tribunal treated the disputed amount as suitable for estimated assessment rather than full sustenance of the unexplained investment addition. The addition was therefore restricted to 5% of the disputed investment amount, and the assessee obtained relief to that extent.

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Issues: Whether the addition made on account of alleged unexplained investment in shares under section 69 of the Income-tax Act, 1961 was to be sustained in full or restricted by way of an ad hoc estimated addition.

Analysis: The assessee produced purchase invoices, bills and other supporting material to explain the share transactions, and the payments were through banking channels. There was no material to show cash payment or cash received in lieu of cheques. The disputed amount was small, and both sides accepted that a reasonable estimated addition could meet the ends of justice. In these circumstances, the entire addition was not sustained and the matter was dealt with on an estimated basis.

Conclusion: The addition was restricted to 5% of the disputed investment amount, resulting in a sustained addition of Rs. 44,228/-; the assessee succeeded to that extent.

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