Unexplained investment addition fails where affidavits, bank records, and cancellation evidence show the payments were explained.

Unexplained investment addition was found unsustainable where the assessee supported cash and banking-channel payments with affidavits and bank records, and showed that the booking transaction was later cancelled. The record bifurcated the disputed amount and indicated that the payments were either routed through family members or reversed after cancellation. On those facts, the addition could not be maintained under section 69 read with section 115BBE of the Income-tax Act, 1961, and relief was granted to the assessee.

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Issues: Whether the addition made and sustained as unexplained investment under section 69 read with section 115BBE of the Income-tax Act, 1961 was justified.

Analysis: The assessee had explained the cash and banking-channel payments with supporting affidavits and bank records, and also pointed out that the booking transaction was subsequently cancelled. The material on record showed bifurcation of the disputed amount and indicated that the payments were either sourced through family members or reversed after cancellation. In these circumstances, the addition sustained as unexplained investment could not be upheld.

Conclusion: The addition under section 69 read with section 115BBE of the Income-tax Act, 1961 was held to be unsustainable and the relief was granted in favour of the assessee.

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