Cash deposit explanation under section 69A accepted where prior income disclosures and gift confirmation supported the source of funds.

Cash deposits during the demonetisation period were explained through prior disclosures of agricultural and tuition income and a brother's confirmation of the alleged gift, so the assessee was held to have discharged the burden of proving the ownership and source of the cash. On that evidence, the explanation for the bank deposits could not be rejected, and the addition under section 69A was directed to be deleted.

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Issues: Whether the addition made under section 69A of the Income-tax Act, 1961 in respect of cash deposits during the demonetisation period was sustainable.

Analysis: The assessee showed prior disclosure of agricultural income and tuition income in the returns of income, and also furnished confirmation from her brother regarding the alleged gift amount received by her. On the material placed on record, the assessee was found to have discharged the burden to explain the ownership and source of the cash deposited in the bank account. In view of the credible evidence, the explanation for the deposits could not be rejected.

Conclusion: The addition sustained by the lower authorities under section 69A was not justified and was directed to be deleted, in favour of the assessee.

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