Unexplained cash deposits may attract restricted additions where gift explanations are partly unproved but full addition is excessive.

Unexplained cash deposits treated as income under section 69A were not upheld in full where the assessees' explanation that the deposits were gifts from family members was not fully substantiated, yet the facts did not justify sustaining the entire addition. The Tribunal found the lower authorities' concerns on genuineness and donor creditworthiness were not completely displaced, but considered the original additions excessive on the record. It therefore restricted the additions to Rs. 1 lakh each, granting partial relief and reducing the assessed additions accordingly.

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Issues: Whether the additions made towards unexplained cash deposits under section 69A of the Income-tax Act, 1961 were to be sustained in full or modified in the facts of the case.

Analysis: The assessees claimed that the cash deposits represented gifts from family members. The Revenue disputed the genuineness of the gifts and the creditworthiness of the donors. On the facts presented, the explanations and evidence did not fully dislodge the lower authorities' findings, but the entire additions were considered excessive in the circumstances.

Conclusion: The additions were restricted to Rs. 1 lakh each, resulting in partial relief to the assessees.

Final Conclusion: The appeals were partly allowed and the assessed additions stood reduced accordingly.

Ratio Decidendi: Where explanations for cash credits are not wholly satisfactory yet the facts do not justify sustaining the entire addition, a restricted addition based on a reasonable estimate may be made.

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