Section 69 cash deposit addition remanded for verification of cash book and cash flow evidence.

Cash deposits of demonetised currency were examined under section 69, with the assessee's cash book showing opening cash availability of Rs. 65,35,514.52 as on 01.11.2016 and no bank deposits apart from the two impugned deposits on 15.11.2016 and 21.11.2016. The cash book and cash flow statement were required to be verified by the Assessing Officer, including whether they had been produced in the original assessment and whether the documents now filed were the same as those earlier available. The addition was not finally sustained at this stage and was to be reconsidered on verification; if the cash balance as on 01.11.2016 exceeded Rs. 18 lakh, the addition was to be deleted.

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Issues: Whether the addition made under section 69 on account of cash deposits of demonetised currency was sustainable on the facts, and whether the cash book and cash flow statement required verification before the addition could be sustained.

Analysis: The cash book showed opening cash availability of Rs. 65,35,514.52 as on 01.11.2016 and no bank deposit other than the two impugned deposits on 15.11.2016 and 21.11.2016. In the interest of justice, the cash book and cash flow statement were directed to be placed before the Assessing Officer for verification, including whether they had been produced during the original assessment and whether the documents now produced were the same as those earlier available.

Conclusion: The addition under section 69 was not finally upheld at this stage and was directed to be examined afresh on verification of the cash book and cash flow statement; if the cash balance as on 01.11.2016 exceeded Rs. 18 lakh, the addition was to be deleted.

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