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<h1>Cash deposits during demonetisation explained by withdrawals and household savings, so addition for unexplained cash deleted on appeal</h1> Addition under unexplained cash provisions for deposits during demonetisation was contested on the ground that the deposits were sourced from prior bank ... Addition on account of cash deposit in his Bank account during demonetization period - Addition u/s 69A r/w section 115BBE - source of cash deposit not explained - HELD THAT:- Deposit made by assessee is fully explained by withdrawals made by assessee from the bank for household expenses and for marriage of the assessee’s daughter. The explanation of the assessee is further supported by the contention that assessee’s wife who did not maintain any bank account of her own, also had accumulated savings out of funds given to her household expenses, and that she, as a result, had cash in hand as stridhan. Thus, the submission made by the assessee that deposits made by the assessee in bank account is treated as genuinenly explained by way savings made by assessee and his wife. Therefore, the AO is directed to delete the addition. Appeal of assessee allowed. Issues: Whether the addition of Rs. 11,29,500/- made under Section 69A read with Section 115BBE of the Income-tax Act, 1961, on account of cash deposits during the demonetization period is justified, or whether the deposits stand satisfactorily explained by prior bank withdrawals and accumulated household savings.Analysis: The assessment under Section 143(3) recorded an addition on account of cash deposits and the appellate authority had confirmed the same. The evidence on record shows aggregated past bank withdrawals and asserted accumulated cash savings (including amounts characterized as stridhan and household savings) sufficient to account for the impugned deposits. The appellate record contains detailed submissions quantifying total withdrawals and explaining the flow of funds from withdrawals and household savings into the deposits. The explanation demonstrably links prior withdrawals and accumulated household cash to the deposits in question and is not rebutted by contrary evidence on record.Conclusion: The addition of Rs. 11,29,500/- is deleted and the appeal is allowed in favour of the assessee.
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