Cash deposit reconciliation defeats unexplained money treatment under section 69A when sources are credibly matched to sales and withdrawals.

A cash-deposit addition under section 69A of the Income-tax Act, 1961 was deleted where the assessee furnished a reconciliation showing that the deposits were sourced from cash sales and withdrawals from the same bank account. Because the reconciliation covered the deposits sustained by the appellate authority and the Revenue did not dispute the stated source, the cash could not be treated as unexplained money. Consequential taxation under section 115BBE therefore also could not survive, and the addition was set aside to that extent.

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Issues: Whether the addition sustained under Section 69A of the Income-tax Act, 1961 on account of cash deposits in the bank account was liable to be deleted on the basis of the reconciliation of cash sales and cash withdrawals furnished by the assessee.

Analysis: The assessee produced a reconciliation statement showing that the cash deposits were met from cash sales and withdrawals from the same bank account. The explanation covered the deposits sustained by the appellate authority, and the Revenue did not dispute the source shown in the reconciliation. In such circumstances, the cash deposits could not be treated as unexplained money for the purpose of taxability under Section 69A and consequential taxation under Section 115BBE of the Income-tax Act, 1961.

Conclusion: The addition on account of cash deposits was deleted and the issue was decided in favour of the assessee.

Final Conclusion: The appellate order sustaining the cash-deposit addition was set aside to that extent, and the assessee's appeal succeeded.

Ratio Decidendi: Where the assessee furnishes a credible reconciliation showing the source of cash deposits from identifiable receipts and withdrawals, the amount cannot be sustained as unexplained money under Section 69A of the Income-tax Act, 1961.

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