Unexplained cash deposits and employer tax credit: documentary evidence defeated the addition, while verification was remanded.

An addition for unexplained cash deposits in a foreign bank account cannot survive where bank records and confirmations show that part of the amount was wrongly treated as salary and the balance is supported by evidence of family cash receipts for travel-related expenses, particularly where no contrary material rebuts the documentary evidence and books of account were not required. The tax-credit claim for employer-paid tax, though reflected in Form 26AS and linked to disclosed relocation allowance and perquisites, was not fully verifiable on the appellate record and was therefore remanded to the Assessing Officer for limited verification after hearing the assessee. Relief was accordingly granted on the cash-deposit issue and only partial relief on the tax-credit issue.

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Issues: (i) Whether the addition made on account of alleged unexplained cash deposits in the foreign bank account was sustainable. (ii) Whether the assessee was entitled to credit of tax paid by the employer and, if not verifiable at the appellate stage, whether the matter required remand for verification.

Issue (i): Whether the addition made on account of alleged unexplained cash deposits in the foreign bank account was sustainable.

Analysis: The cash deposits were found to be explained by the assessee through bank records and confirmations showing that part of the amount was wrongly treated as salary deposit and the balance was supported by evidence of cash received from family members towards travel-related expenses during the overseas assignment. The assessee was also not required to maintain books of account, and no contrary material was brought to dislodge the documentary evidence.

Conclusion: The addition on account of unexplained cash deposits was deleted, in favour of the assessee.

Issue (ii): Whether the assessee was entitled to credit of tax paid by the employer and, if not verifiable at the appellate stage, whether the matter required remand for verification.

Analysis: The tax paid by the employer was reflected in Form 26AS and was linked to the relocation allowance and perquisite already disclosed in income. The disallowance of the credit was found to be unjustified, but the appellate record was insufficient for final verification of the exact credit claim, so the issue was sent back to the Assessing Officer for examination after giving the assessee an opportunity of hearing.

Conclusion: The tax credit issue was remanded for verification and allowed for statistical purposes, in favour of the assessee to that extent.

Final Conclusion: The appeal succeeded on the cash-deposit addition and the tax-credit dispute was restored for limited verification, so the overall relief was only partial.

Ratio Decidendi: An addition for unexplained cash deposits cannot survive where the assessee substantiates the source with credible documentary evidence and the revenue brings no rebuttal, and a tax-credit claim reflected in the prescribed statement may be remanded for verification when final allowance cannot be confirmed on the existing record.

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