Unexplained cash deposits during demonetisation upheld where the taxpayer's source explanation lacked credible contemporaneous evidence.

Cash deposits made during the demonetisation period were treated as unexplained money where the assessee failed to substantiate the source with credible contemporaneous evidence. The explanation that the funds came from the spouse's proprietary concern, allegedly sourced from a top-up home loan, was rejected because the claimed cash retention for several months was unsupported, the cash book and voucher pattern lacked credibility, and the explanation appeared to be an afterthought. The addition under section 69A, with consequential tax treatment under section 115BBE, was upheld and the assessee's challenge failed.

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Issues: Whether cash deposits made during the demonetisation period were satisfactorily explained and whether the addition made as unexplained money under section 69A with the consequential tax treatment under section 115BBE was sustainable.

Analysis: The assessee sought to explain the cash deposits as amounts received from the proprietary concern of the spouse, sourced from a top-up home loan withdrawn in May 2016. The explanation was not accepted because the alleged cash was said to have remained unutilised for several months, no convincing documentary evidence supported such retention of large cash balances, and the cash book entries were found to be unpersuasive. The serially continuous voucher pattern also weakened the credibility of the explanation. The explanation was therefore treated as an afterthought, and the factual findings of the lower authorities were found to suffer from no infirmity.

Conclusion: The addition as unexplained money was upheld and the assessee's challenge failed.

Final Conclusion: The appeal was rejected, and the assessment addition confirmed by the appellate authorities remained undisturbed.

Ratio Decidendi: A cash deposit remains liable to be assessed as unexplained money where the assessee fails to substantiate the source with credible contemporaneous evidence and the explanation appears to be an afterthought.

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