Unexplained seized cash under section 69A can be added when the assessee lacks credible supporting evidence.

Seized cash was treated as unexplained income under section 69A of the Income-tax Act, 1961 because the assessee failed to substantiate the claimed source with reliable corroborative evidence. The explanation that the cash represented business receipts or inter-branch transfers was rejected where no branch-wise books, balance details, purpose of cash movement, or supporting records were produced, and the cash flow pattern and same-day bank deposit undermined credibility. On that factual basis, the deletion of the addition by the first appellate authority was held unsustainable and the assessment addition was restored.

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Issues: Whether the deletion of the addition made under section 69A of the Income-tax Act, 1961 in respect of cash of Rs. 7.50 crores seized from the assessee was sustainable.

Analysis: The assessee claimed that the seized cash represented business receipts or funds transferred between branches, but no corroborative evidence was produced to establish the source, the purpose of the alleged cash movement, or the branch-wise books and balances said to support the explanation. The cash flow pattern, the regular bank cash pickups, the deposit of cash on the same date after seizure, and the absence of satisfactory supporting material led to the conclusion that the explanation was not credible. The finding that the cash represented sale proceeds was rejected as unsupported by the records, and the appellate deletion was held to have been based on an erroneous appreciation of facts and law.

Conclusion: The addition under section 69A was rightly made and the deletion by the first appellate authority was unsustainable; the Revenue's appeal succeeded.

Final Conclusion: The assessment addition treating the seized cash as unexplained income stood restored, and the relief granted to the assessee was reversed.

Ratio Decidendi: Where an assessee fails to substantiate the source and nature of seized cash with reliable, corroborative evidence, the amount may be treated as unexplained income under section 69A of the Income-tax Act, 1961.

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