Unexplained cash deposit issue remanded for fresh verification after demonetisation-era source evidence was placed on record.

Cash deposits in specified bank notes during the demonetisation period were treated as unexplained income because the assessee had not established the source before the lower authorities. Although the assessee produced a creditor confirmation and bank statement, the Tribunal noted that the amount was claimed to have been received before the appointed day under the Specified Bank Notes (Cessation of Liability) Act, 2017. As neither side opposed fresh scrutiny, the Tribunal restored the matter to the Assessing Officer for de novo verification, with adequate opportunity to the assessee and consideration of the evidence on merits. The addition was therefore not finally sustained and was remanded for fresh adjudication in accordance with law.

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Issues: Whether the addition made as unexplained income on account of cash deposit received in specified bank notes during the demonetisation period was to be sustained or the matter required remand for fresh verification.

Analysis: The cash deposit was claimed to have been received from a sundry creditor and was supported by a confirmation and bank statement placed before the Tribunal. The Tribunal noted that the amount was received before the appointed day under the Specified Bank Notes (Cessation of Liability) Act, 2017, but the assessee had not successfully established the source before the lower authorities. In these circumstances, and with no objection from either side to a fresh examination, the Tribunal found it appropriate to restore the issue to the Assessing Officer for de novo verification with adequate opportunity to the assessee and admission of the evidence on merits.

Conclusion: The addition was not finally sustained and the matter was remanded to the Assessing Officer for fresh adjudication in accordance with law.

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