Cash deposits during demonetisation accepted as explained where rental income and loan repayment were not rebutted.

Cash deposits made during the demonetisation period were explained as arising from rental receipts and repayment of a loan. The record contained no material to discredit that explanation, and the lower authorities accepted it only partly without rebutting it with contrary evidence. On that basis, the balance addition treating the remaining deposits as unexplained was not justified and was directed to be deleted.

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Issues: Whether the addition made on account of cash deposits during the demonetisation period was sustainable when the assessee explained the deposits as out of rental income and loan repayment.

Analysis: The assessee explained that the cash deposits were sourced from rental receipts and repayment of a loan, and the record did not contain material to discredit that explanation. The lower authorities had accepted the explanation only to a limited extent and treated the balance as unexplained without rebutting the assessee's version with contrary evidence.

Conclusion: The addition of the balance cash deposits was not justified and was directed to be deleted.

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