Cash deposit explained by gold loan source cannot be taxed as unexplained income absent contrary evidence.

Cash deposits in a bank account were held not to be unexplained income where the assessee gave a credible source explanation that the funds came from a gold loan intended for a proposed dairy farming business, and the business was not started due to family circumstances. The record contained no contrary material showing that the money had been used for any purchase or other transaction after withdrawal. In the absence of evidence rebutting the explanation or tracing the amount to another income source, the addition as unexplained income was deleted.

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Issues: Whether the addition made on account of cash deposits in the bank account as unexplained income was sustainable when the assessee explained the source as gold loan proceeds intended for dairy farming business.

Analysis: The source of the deposited was explained as funds raised through a gold loan. It was also explained that the amount was not utilised because the proposed dairy farming business could not be started due to family circumstances. The record did not show any contrary material indicating that the amount had been spent on any purchase or other transaction after withdrawal. In the absence of evidence rebutting the explanation, the explanation for the deposit was found acceptable.

Conclusion: The addition treating the cash deposit as income from unexplained sources was not justified and was deleted in favour of the assessee.

Final Conclusion: The appeal was allowed and the impugned addition was set aside.

Ratio Decidendi: Where a cash deposit is supported by a credible explanation of source and the revenue brings no material to disprove utilisation or trace contrary income, the addition as unexplained income cannot be sustained.

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