Unexplained cash deposits under section 68 remain taxable when the assessee offers no source explanation or evidence.

Cash deposits in a bank account may be treated as unexplained income under section 68 where the assessee does not explain the source or produce supporting evidence. The note records that non-cooperation in assessment and remand proceedings, coupled with the absence of documentary proof that the cash came from family members or any other identified source, left the explanation unsubstantiated. On those facts, the addition as unexplained cash was sustained and the challenge failed.

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Issues: Whether the addition under section 68 of the Income-tax Act, 1961, on account of cash deposits in the bank account was sustainable when the assessee failed to explain the source and did not cooperate either in the assessment proceedings or in remand proceedings.

Analysis: The assessee remained absent throughout the proceedings and did not furnish any explanation or supporting evidence for the cash deposits. The assessment was completed ex parte after notice under sections 147, 148 and 142(1) of the Income-tax Act, 1961, and the appellate authority sought remand verification. Even in remand, no documentary material was produced to establish that the cash belonged to family members or had any explained source. In the absence of proof, the explanation remained unsubstantiated and the addition as unexplained cash was held to be justified.

Conclusion: The addition under section 68 of the Income-tax Act, 1961, was rightly confirmed and the assessee's challenge failed.

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