Demonetisation cash deposit addition fails where bank records show no demonetised currency was deposited.

Bank certificates showing that no demonetised currency was deposited, together with acceptance of the returned income and turnover, meant the addition for cash deposits during demonetisation could not stand on mere suspicion. The first appellate authority had examined the assessee's explanation in detail, and no material showed that the deposits were in demonetised notes. On those facts, the deletion of the addition was upheld and the Revenue's challenge failed.

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Issues: Whether the addition made on account of cash deposits during the demonetisation period was justified and whether the deletion of such addition by the first appellate authority called for interference.

Analysis: The assessee produced bank certificates showing that no demonetised currency had been deposited in the bank accounts. The returned income stood accepted and the turnover was treated as accepted in principle. The first appellate authority had also undertaken a detailed examination of the assessee's claim before granting relief. On these facts, the addition made by the Assessing Officer lacked merit.

Conclusion: The deletion of the addition was upheld and the Revenue's challenge was rejected.

Final Conclusion: The appellate relief granted to the assessee was sustained and the Revenue's appeal failed.

Ratio Decidendi: Where bank records and surrounding material establish that deposits were not made in demonetised currency and the assessee's results are otherwise accepted, an addition based solely on suspicion regarding cash sales during demonetisation is not justified.

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