Explained cash deposit treatment fails where same-day withdrawal and redeposit supports a contra entry explanation.

Cash deposits in a savings bank account were treated as unexplained income, but the assessee explained them as a contra entry, representing cash withdrawn from one account and deposited in another on the same day. The addition was made without proper enquiry into the source of the deposit, and the appellate order sustained the assessment without dealing with the explanation on merits. On these facts, the source of the deposit was accepted as explained and the addition was held unsustainable.

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Issues: Whether the addition made on account of cash deposit in the assessee's savings bank account as unexplained income was sustainable.

Analysis: The assessee explained that the deposit was a contra entry, being the amount withdrawn from one savings bank account and deposited in another on the same day. The assessee also explained the circumstances for non-response to notices. The addition was made without proper enquiry into the source of the deposit, and the appellate order merely sustained the assessment without addressing the explanation on merits.

Conclusion: The source of the cash deposit was accepted as explained, and the addition was unsustainable.

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