Cash deposit explanation accepted where source traced to gold loan and withdrawals, defeating section 69A addition.

Cash deposits in the assessee's bank account were examined under section 69A of the Income-tax Act as alleged unexplained money. The assessee explained that the deposits came from a prior gold loan and related cash withdrawals, and that the funds remained available because planned marriage expenditure was postponed when the daughter chose further education. That explanation was found consistent with surrounding circumstances and was not rebutted by any contrary material from the Revenue. On that basis, the assessee was held to have discharged the burden of explaining the nature and source of the deposits, and the addition was directed to be deleted.

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Issues: Whether the cash deposits made into the assessee's bank account were liable to be treated as unexplained money under section 69A of the Income-tax Act, 1961 and taxed accordingly.

Analysis: The assessee explained that the cash deposits were sourced from a prior gold loan and related cash withdrawals, and that the cash remained available because the planned expenditure for the daughter's marriage was postponed when she opted to pursue further education. The explanation was found to be consistent with the surrounding circumstances and was not demolished by any contrary material from the Revenue. Once the assessee discharged the burden of explaining the nature and source of the cash deposits, the amount could not be brought to tax merely on conjecture or suspicion.

Conclusion: The addition treating the cash deposits as unexplained money was not sustainable and was directed to be deleted, in favour of the assessee.

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