Unexplained cash deposits were deleted where cash flow, cash book, and supporting confirmations substantiated the source.

Cash deposits were examined under Section 69A and Section 115BBE of the Income-tax Act, 1961. The assessee supported the deposits with a cash flow statement and cash book showing opening cash balance from declared income, backed by earlier return filings, and produced confirmation letters and identity details for persons from whom loans had earlier been advanced and later repaid. On the material furnished, the explanation for the deposits was accepted as evidenced, and the addition was held unjustified. The addition under Section 69A read with Section 115BBE was deleted.

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Issues: Whether the cash deposits of Rs. 9,60,000 were correctly treated as unexplained money under Section 69A and taxed under Section 115BBE of the Income-tax Act, 1961.

Analysis: The assessee furnished a cash flow statement and cash book to show that Rs. 5,78,500 represented available opening cash balance arising from declared income, supported by earlier return filings. For the balance amount of Rs. 3,81,500, confirmation letters and identity particulars of the persons from whom loans had earlier been advanced and later repaid were produced. On the material placed, the explanation for the cash deposits was found to be supported by evidence, and the addition was not justified.

Conclusion: The addition made under Section 69A read with Section 115BBE was deleted, and the issue was decided in favour of the assessee.

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