Unexplained investment addition under section 69 deleted where cash purchase of property was traced to partnership firm drawings.

Cash payment for property purchase was treated as unexplained investment under section 69, but the assessee explained that the funds came from drawings from a partnership firm. The explanation was supported by the firm's financial statements, partner's capital account and cash book, and the cash withdrawals were shown on different dates before the transaction. As the records established availability of cash and the payment was reflected in the agreement and sale deed, the source stood explained. The addition under section 69 was therefore deleted.

---

---

Issues: Whether the addition made under section 69 of the Income-tax Act, 1961, treating cash payment of Rs. 31,86,000/- for purchase of property as unexplained investment, was sustainable.

Analysis: The assessee explained that the cash payment was made out of drawings from the partnership firm and supported the explanation with the firm's financial statements, partner's capital account and cash book. The cash drawings were reflected as having been made on different dates before the property transaction, and the availability of cash in the firm was supported by the records produced. The authorities below had sustained the addition mainly on the ground that the supporting cash book and related details were insufficient, but the material on record showed that the source of the cash payment stood explained and that the payment was recorded in the agreement and sale deed.

Conclusion: The addition under section 69 could not be sustained and was deleted, in favour of the assessee.

---