Unexplained investment under section 69B sustained where refund cheque in assessee's name established direct nexus to jewellery transaction.

Cash paid through the assessee's personal assistant for purchase of jewellery, followed by a cheque refund of the balance in the assessee's name and credit of that cheque into his bank account, established a direct nexus with the transaction. On those facts, the explanation that the cash payment did not relate to the assessee was rejected, and the precedents relied upon were treated as inapplicable. The impugned amount was therefore sustained as unexplained investment under section 69B of the Income-tax Act, 1961, and the assessee's challenge failed.

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Issues: Whether the cash payment made for purchase of jewellery, coupled with refund of the balance amount by cheque in the assessee's name and credit of that cheque in his bank account, could validly be assessed as unexplained investment under section 69B of the Income-tax Act, 1961.

Analysis: The record showed that the cash was paid through the assessee's personal assistant and the jewellery was delivered to him. A crucial and undisputed fact was that part of the same transaction resulted in refund of the balance amount by cheque issued in the assessee's name, which was later deposited in his bank account. That circumstance established a direct nexus between the assessee and the impugned transaction. In these facts, the explanation that the cash payment did not pertain to the assessee could not be accepted, and the judicial precedents relied upon by the assessee were held to be inapplicable on the facts.

Conclusion: The addition under section 69B was upheld and the assessee's challenge failed.

Final Conclusion: The assessment of the impugned amount as unexplained investment was sustained, and the appeal was rejected.

Ratio Decidendi: Where refund arising from the very transaction is received in the assessee's name and credited to his bank account, such undisputed conduct establishes a direct nexus sufficient to sustain an addition as unexplained investment.

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