Section 69A unexplained money addition fails where cash deposits are recorded in books and explained as business receipts.

Section 69A could not be applied to cash deposits recorded in the books and supported by customer ledger and allied records, because the assessee explained them as business receipts and the Revenue failed to show that the deposits were unaccounted money or that the explanation was unsatisfactory. The statutory preconditions for treating the amount as unexplained money were therefore not satisfied, and the addition was deleted in favour of the assessee.

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Issues: Whether cash deposits reflected in the bank account and supported by books of account and customer ledger could be assessed as unexplained money under section 69A of the Income-tax Act, 1961.

Analysis: Section 69A applies only when the assessee is found to be the owner of money not recorded in the books of account and offers no satisfactory explanation about its nature and source. The cash deposits in question were claimed to represent business receipts and were shown in the regular books of account through the customer ledger and allied records. The Assessing Officer did not bring material to show that the deposits were unaccounted money or that the explanation was false. On these facts, the statutory conditions for invoking section 69A were not met.

Conclusion: The addition under section 69A was unsustainable and was directed to be deleted, in favour of the assessee.

Final Conclusion: The appeal was allowed and the impugned addition on account of cash deposits was set aside.

Ratio Decidendi: Section 69A cannot be invoked where the cash deposits are recorded in the books and are explained as business receipts, unless the revenue establishes that the money represents unaccounted income and the explanation is unsatisfactory.

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