Source of funds from third-party NRE withdrawals requires verification; remand directs confirmation before sustaining cash deposit additions.

The tribunal addressed two issues: whether cash deposits during demonetisation were explained by prior withdrawals from the assessee's son's NRE account, and whether assessed interest income required addition. For the source-of-funds issue the tribunal accepted the withdrawals as genuine in principle but remanded the matter to the assessing officer to obtain an affidavit/confirmation from the son and any supporting documents before deciding; outcome therefore requires verification. For the interest issue the tribunal directed verification of bank credit timing and related evidence (including bank statements and tax credit records) and ordered deletion if the credit post-dates the relevant period.

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Issues: (i) Whether cash deposits of Rs.45,00,000 (part of total disputed deposits) can be treated as explained by withdrawals from assessee's son's NRE account or require further verification; (ii) Whether addition of Rs.54,774 as interest income should be sustained.

Issue (i): Whether the withdrawals from the son's NRE account occurring between 2008 and 2016 constitute an acceptable source for the assessee's cash deposits made during demonetisation period.

Analysis: The appellate tribunal reviewed the record of withdrawals from the son's NRE account and accepted that the withdrawals were genuine and not sham. The tribunal noted that earlier withdrawals over several years can constitute a source for later cash deposits if genuine, citing authority that surrounding circumstances may be considered and that gaps in time are immaterial where withdrawals are genuine. However, the appellant had not produced an affidavit or confirmation from his son establishing that the assessee withdrew those amounts and held them as cash until deposit; the assessing officer retains power to seek such confirmations and any other supporting documents.

Conclusion: Issue (i) is set aside to the assessing officer for limited purpose to obtain confirmation from the assessee's son (by affidavit) and any other documents; thereafter the assessing officer shall proceed according to law. This disposition favours the assessee to the extent that the matter is remanded for verification rather than confirming the addition.

Issue (ii): Whether the addition of Rs.54,774 as unaccounted interest income is sustainable.

Analysis: The appellant asserted that the interest of Rs.54,774 was credited after 31.03.2017 and thus pertains to a different accounting period; the tribunal directed the assessing officer to verify the appellant's averments by examining bank credits and related evidence such as statements and Form 26AS to confirm timing of credit.

Conclusion: Issue (ii) requires factual verification by the assessing officer and, if the appellant's claim is established, the addition of Rs.54,774 shall be deleted. This conclusion is in favour of the assessee conditionally, subject to verification.

Final Conclusion: The appeal is disposed of by remanding the disputed issues for limited verification by the assessing officer (confirmation by the assessee's son regarding withdrawals and verification of interest credit timing); overall the tribunal interferes with the impugned order to the extent indicated and allows the appeal for statistical purposes.

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