Unexplained cash receipts and expenditure additions fail where cash book and contract entries explain the accounting mismatch.

Additions for alleged unexplained cash receipts under section 68 and unexplained expenditure under section 69C were found unsustainable because the assessee produced the cash book and contract-linked entries from both parties' books and the related firm's books, which explained the accounting mismatch noted by the Assessing Officer. The factual basis for the additions was therefore incorrect, and the cash book supported both the credit and expenditure entries. On that record, the impugned additions could not stand, and the assessee succeeded.

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Issues: Whether the additions made on account of alleged unexplained cash receipts under section 68 and unexplained expenditure under section 69C were sustainable.

Analysis: The assessee had placed on record the relevant cash book and details of the contract entries between the parties' books as well as the related firm's books. These records explained the apparent accounting mismatch noticed by the Assessing Officer. Since the addition was based on an incorrect factual assumption and the cash book also supported the credits and expenditure entries, the impugned additions could not be sustained.

Conclusion: The additions under sections 68 and 69C were held to be unsustainable, and the assessee succeeded.

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