Unexplained cash deposits: primary records are essential to support claimed cash withdrawals and cash sales under section 69A.

Unexplained cash deposits during the demonetisation period remained taxable under section 69A where the assessee did not produce the cash book, sale invoices or other primary records before the Assessing Officer despite notices under sections 133(6) and 142(1). The appellate view that the deposits were covered by cash withdrawals and cash sales was not accepted because those foundational documents were not verified before assessment and no remand examination of additional material was obtained. A mere assertion that the books were not rejected could not establish the source of the deposits. The addition was therefore sustained and restored in favour of the Revenue.

---

---

Issues: Whether the deletion of addition made under section 69A of the Income-tax Act, 1961, on account of cash deposits during the demonetisation period was justified on the basis of alleged cash withdrawals, cash sales and cash book entries.

Analysis: The Assessing Officer had treated the cash deposits as unexplained money because the assessee did not produce the cash book, sale invoices or other supporting material before assessment despite notices under sections 133(6) and 142(1) of the Income-tax Act, 1961. The appellate relief rested on the premise that the deposits were supported by withdrawals and cash sales reflected in the books, but the record showed that no cash book or sale bills were produced before the Assessing Officer and no remand verification of alleged additional material was obtained. The reasoning that the books were not rejected could not substitute for proof of the source of the deposits when the foundational documents were not before the Assessing Officer.

Conclusion: The deletion of the addition was not sustainable. The cash deposits remained unexplained and the addition under section 69A of the Income-tax Act, 1961, was restored in favour of the Revenue.

Ratio Decidendi: An addition for unexplained cash deposits cannot be deleted merely on general assertions of cash withdrawals or cash sales when the assessee fails to produce primary supporting records and the source of deposits is not proved with cogent evidence.

---