Cash deposits backed by audited books cannot be treated as unexplained money merely because deposits were made during demonetisation.

Cash deposits made during demonetisation were fully supported by an audited cash book showing sufficient balance, and no defect was found in the books or accounts. An addition as unexplained money could not be sustained merely because the deposits were made over time, and the selective acceptance of the same source for part of the deposits was arbitrary. The addition under section 69A read with section 115BBE was therefore deleted, and the income was directed to be recomputed without that addition.

---

---

Issues: Whether the addition made as unexplained money in respect of cash deposits during the demonetisation period was justified when the assessee's cash book showed sufficient cash balance and the books were audited without defect.

Analysis: The assessee's audited books showed a cash balance sufficient to cover the deposits made during the relevant period. The assessment records did not disclose any defect in the cash book or the audited accounts. The addition was sustained only for part of the deposits on the view that the assessee ought to have deposited the cash within a reasonable period, even though the same source explained the entire amount. Such a requirement was held to have no basis in law, and the selective acceptance of the source for one part of the deposits while rejecting the balance was found to be arbitrary.

Conclusion: The addition under section 69A read with section 115BBE was not sustainable and was deleted in favour of the assessee.

Final Conclusion: The appeal succeeded, and the assessed income was directed to be recomputed after deleting the impugned addition.

Ratio Decidendi: Where cash deposits are fully supported by an audited cash book showing sufficient available balance and no defect is found in the accounts, an addition as unexplained money cannot be sustained merely because the deposits were made over time during demonetisation.

---