Employer reimbursement of vehicle expenses cannot be taxed as unexplained cash credits when supported by contemporaneous evidence.

Cash deposits in the assessee's bank account were accepted as reimbursements from the employer towards vehicle running and maintenance expenses, not unexplained cash credits under section 68. The assessee supported the claim with employer confirmations, ledger entries and correspondence, including a reply to notice under section 133(6), establishing the employment relationship and the nature of the payments for transportation, fuel, toll tax and maintenance. The deposits were also spread through the year, which supported the reimbursement explanation. On that record, the addition was deleted.

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Issues: Whether the cash deposits in the assessee's bank account were unexplained cash credits liable to addition, or were reimbursements received from the employer company towards vehicle running and maintenance expenses.

Analysis: The assessee produced employer confirmations, ledger material and supporting correspondence showing that he was employed as Manager (Admn.) and had received cash payments against transportation, fuel, toll tax and vehicle maintenance expenses. The confirmation issued in response to notice under section 133(6) of the Income-tax Act, 1961 supported the employment relationship and the payment of amounts towards running and maintenance expenditure. On the record, the deposits were found to be spread through the year and were accepted as reimbursements rather than unexplained receipts.

Conclusion: The addition under section 68 of the Income-tax Act, 1961 was deleted and the assessee succeeded on this issue.

Ratio Decidendi: Where the assessee substantiates cash deposits with contemporaneous employer confirmations and other supporting evidence showing reimbursement of business-related expenses, such deposits cannot be treated as unexplained cash credits under section 68 of the Income-tax Act, 1961.

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