Unexplained investment addition deleted where documentary evidence proved NBFC-funded NSEL trades and no personal routing of transaction funds.

Addition under section 69 for alleged unexplained investment in NSEL transactions was deleted because the assessee substantiated the source of funds with the credit facility agreement, ledger accounts, bank statements and lender confirmation. The evidence showed that the NBFC financed most of the transaction value directly to the broker and only margin money came from the assessee's own account, so no transaction amount was routed through the assessee's personal account. As the assessee discharged the primary burden and the Revenue produced no independent material to rebut the explanation, mere doubt or suspicion could not sustain the addition.

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Issues: Whether the addition sustained under section 69 of the Income-tax Act, 1961 as unexplained investment in NSEL transactions was liable to be deleted.

Analysis: The assessee produced the credit facility agreement, ledger accounts, bank statements and confirmation from the financer to show that 90% of the transaction value was financed directly by the NBFC to the broker and that only margin money flowed from the assessee's own bank account. The evidence showed that no transaction amount was routed through the assessee's personal account and that the Revenue did not bring independent material to discredit the explanation. Once the assessee discharged the primary burden with documentary proof, the onus shifted to the Revenue, and mere doubt or suspicion could not sustain the addition.

Conclusion: The addition under section 69 was not sustainable and was deleted, resulting in allowance of the assessee's appeal.

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