Unexplained cash deposits: tribunal accepts Rs.3,96,000 explanations after burden-of-proof assessment, upholds Rs.48,000 addition; appeal partly allowed

Whether cash deposits are unexplained and chargeable: Tribunal applied the burden of proof rule on unexplained cash deposits and evaluated the assessee's documentary and oral explanations. It found credible proof of cash availability from a close relative to the extent of Rs. 2,96,000 and receipts from clients of Rs. 94,000 (total Rs. 3,92,000) out of the AO's confirmed Rs. 5,38,000, and accepted a further cash explanation from a relative for Rs. 1,00,000 but rejected proof for Rs. 48,000. Consequence: addition upheld for Rs. 48,000 and the balance of the addition was deleted; appeal partly allowed.

---

---

Issues: Whether the addition of Rs.5,38,000 made by the Assessing Officer as unexplained cash deposits (and sustained by the CIT(A)) for A.Y.2017-18 is justified, and if so, to what extent.

Analysis: The assessee produced bank statements, return of income and a statement of receipts and payments. Evidence established availability of cash from the assessee's mother amounting to Rs.2,96,000 and cash of Rs.94,000 received from clients for advance tax, together totalling Rs.3,92,000 out of the Rs.5,38,000 in question. The assessee also produced partial evidence of cash from his uncle, demonstrating Rs.1,00,000 but failing to substantiate the remaining Rs.48,000 claimed. Applying an equitable assessment of the available proof, the Bench accepted the substantiated amounts and treated only the unproven Rs.48,000 as unexplained cash deposit liable to be added to income.

Conclusion: The addition is sustained to the extent of Rs.48,000 (against the assessee) and the balance portion of the Rs.5,38,000 is deleted (in favour of the assessee).

---