Bank deposit additions partly fail where documentary evidence and banking trail prove the source of cash deposits.

Cash deposits in the assessee's bank account were partly explained by documentary evidence and banking trail. The tribunal accepted deposits sourced from family members where sale deed records, bank statements and remittance evidence showed that the father and uncle received sale proceeds of agricultural land, one sister's contribution came through bank transfer, and an NRI sister's remittance passed through banking channels. The balance claimed as accumulated savings remained unsupported by acceptable evidence, so the unexplained portion could still be sustained. The addition was therefore deleted to the extent of proved sources and maintained only for the unsubstantiated balance.

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Issues: Whether the cash deposits in the assessee's bank account were wholly unexplained or whether the assessee had satisfactorily explained part of the source, warranting deletion of the addition to that extent.

Analysis: The assessee's explanation that part of the deposits represented amounts received from family members was examined on the basis of the sale deed, bank statements, and remittance records. The material showed that the amount received from the father and uncle was supported by the sale proceeds of agricultural land, the amount attributed to one sister was supported by bank transfer evidence, and the amount attributed to the NRI sister was supported by remittance through the banking channel. The remaining amount claimed as accumulated savings was not supported by any acceptable evidence and remained unproved. The addition could therefore not survive in full, but the unexplained balance was still liable to be sustained.

Conclusion: The explanation was accepted for Rs. 9,00,000 and rejected for Rs. 3,20,000. The addition was deleted to the extent of Rs. 9,00,000 and sustained for Rs. 3,20,000, resulting in partial relief to the assessee.

Final Conclusion: The assessment addition was reduced on the basis of proved sources and banking evidence, with only the unsubstantiated balance remaining taxable.

Ratio Decidendi: Where the assessee substantiates the source of cash deposits with contemporaneous documentary evidence and banking trail, the corresponding addition as unexplained deposit cannot be sustained; any balance not proved by evidence may still be added as unexplained.

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