Cash deposits treated as explained where bank trail, beneficiary details and prior commission disclosure supported the assessee's explanation.

Cash deposits were not liable to addition under section 69A where the assessee had already disclosed commission income under an income declaration scheme and furnished the names, addresses, PAN details and bank trail of the beneficiary concerns. The bank records showed immediate transfer of the deposited cash to the named beneficiaries, and the assessee's explanation that he had no independent source to make such deposits was supported by the surrounding material. In the absence of any contrary evidence or rebuttal from the Department, treating the entire cash deposits as unexplained income was held to be unjustified and the addition was deleted.

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Issues: Whether the addition made under section 69A in respect of cash deposits in the assessee's bank accounts was sustainable when the assessee had already disclosed the commission income under the income declaration scheme and furnished the names, addresses, PAN details and bank trail of the beneficiaries.

Analysis: The assessee had, prior to the reassessment notice, disclosed that the cash routed through the bank accounts represented transactions of third parties for which commission income was earned, and that disclosure had already been accepted by the Department. The bank material also showed that the cash deposits were immediately transferred to the named beneficiary concerns. The assessee further explained his limited means and absence of any independent source for making such large deposits. The explanation was supported by the surrounding record and was not rebutted by any contrary material or circumstantial evidence.

Conclusion: The addition treating the entire cash deposits as unexplained income was not justified and was liable to be deleted, in favour of the assessee.

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