Explained cash deposits supported by documents cannot be treated as unexplained money merely because cash was retained long term.

Documentary evidence showing that cash deposits came from refunded share application money and accumulated cash balances was accepted as sufficient explanation for the source of funds. The record included cash books, audited financial statements, income-tax return details, and a reply under section 133(6), which supported the genuineness of the cash balance. Retaining cash for a long period, by itself, was held insufficient to justify treating the deposit as unexplained money. The addition under section 69A read with section 115BBE was deleted in favour of the assessee.

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Issues: Whether the addition of Rs. 14,00,000 as unexplained cash deposit under section 69A of the Income-tax Act, 1961 read with section 115BBE of the Income-tax Act, 1961 was sustainable when the assessee claimed that the cash came from refunded share application money and accumulated cash balance.

Analysis: The assessee produced cash books, audited financial statements, income-tax return details of the company, and the reply furnished in response to notice under section 133(6) of the Income-tax Act, 1961. The record showed receipt of Rs. 12,61,880 from Pratap Tea Company Pvt. Ltd. as refund of share application money and also supported availability of past cash balances. The only adverse inference drawn by the lower authorities was that the cash had been retained for a long period, but once the source of cash was explained by documentary evidence, retention of cash for some time could not by itself justify an addition as unexplained money.

Conclusion: The addition under section 69A of the Income-tax Act, 1961 read with section 115BBE of the Income-tax Act, 1961 was not justified and was deleted in favour of the assessee.

Final Conclusion: The assessee's cash deposit was accepted as being supported by explained and genuine sources, and the entire addition was set aside.

Ratio Decidendi: Once an assessee substantiates the source of cash deposits with credible documentary evidence, an addition for unexplained money cannot be sustained merely because the cash was kept for a long period.

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