Explained cash deposits during demonetisation were accepted where sale proceeds and household cash trail were substantiated.

Cash deposited during the demonetisation period was held to be explained because the assessee showed that proceeds from an earlier sale of agricultural land were available in cash and had been kept with his brother for a proposed land purchase before being returned and deposited. The Assessing Officer failed to establish that the cash was otherwise spent, and the assessee also explained domestic expenditure and its source. On these facts, the addition under section 69A and taxation under section 115BBE was deleted.

---

---

Issues: Whether the addition made under section 69A of the Income-tax Act, 1961, and taxed under section 115BBE of the Income-tax Act, 1961, for cash deposited during the demonetisation period was sustainable.

Analysis: The assessee established that agricultural land had been sold earlier and that his share in the sale consideration was available in cash. The explanation that the cash remained with the brother for a proposed purchase of land, and was later handed over and deposited in the bank account, was accepted. The Assessing Officer did not show that the cash had been spent elsewhere, and the domestic expenses and their sources were also explained.

Conclusion: The addition was not justified and was deleted, in favour of the assessee.

---