Section 68 cash deposit addition deleted where prior withdrawals and opening cash balance supported the assessee's explanation.

Cash deposits in the bank account were held not to warrant addition under section 68 where the assessee explained them as redeposits from prior cash withdrawals and opening cash balance. A consistent withdrawal pattern over several months, audited books of account, accepted opening cash balance, and the absence of any disturbance to the book results supported the explanation. On these facts, the cash corpus claimed for redeposit during the demonetization period was accepted, and the addition was deleted.

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Issues: Whether the addition made under section 68 on account of cash deposits in the bank account was sustainable when the assessee explained the deposits as arising from cash withdrawals and opening cash balance.

Analysis: The assessee showed a pattern of consistent cash withdrawals over several months, maintained audited books of account as a corporate entity, and the opening cash balance was accepted. The book results were not disturbed by the Assessing Officer. On the facts, the finding that the assessee had built up a cash corpus for subsequent redeposit during the demonetization period was found acceptable, and the absence of a fully disproved explanation from the assessee did not justify the addition.

Conclusion: The addition under section 68 was deleted and the issue was decided in favour of the assessee.

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