Unexplained cash deposits rejected where bank records and cash book showed business-related withdrawals and redeposits.

Cash deposits were examined as unexplained money under section 69A of the Income-tax Act, 1961, but the assessee supported the source with bank statements, cash book and related records showing cash withdrawals and redeposits in the course of a money transfer agency business. The documentary evidence showed a consistent cash movement pattern, and the Revenue did not establish any discrepancy, fabrication or defect in the books. As the books were not rejected under section 145 and the related commission income from the same transactions was accepted, the addition under section 69A was held unsustainable and was deleted in favour of the assessee.

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Issues: Whether the cash deposits of Rs. 6,25,000 were liable to be treated as unexplained money under section 69A of the Income-tax Act, 1961.

Analysis: The assessee produced bank statements, cash book and related records showing that he was engaged in money transfer business as an agent and that the impugned deposits were sourced from regular cash withdrawals made in the course of that business. The documentary material supported a consistent cash movement pattern, and no discrepancy, fabrication or defect in the books was brought out by the Revenue. The books were not rejected under section 145 of the Income-tax Act, 1961, and the commission income arising from the same business transactions was also accepted.

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

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