Unexplained cash deposits were only partly sustained where withdrawals substantially covered the deposits despite incomplete source reconciliation.

Cash deposits were treated as unexplained income only partly because the assessee showed a prima facie link to withdrawals from her husband's bank account, but failed to file a reconciliation or cash flow statement to fully explain the source. As the withdrawals substantially covered the deposits, the full addition was considered excessive on the facts. The addition was therefore restricted to a lump sum amount, granting partial relief on the cash deposit issue.

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Issues: Whether the addition of cash deposits as unexplained income was to be sustained in full or restricted.

Analysis: The assessee showed prima facie linkage between the cash deposits and withdrawals from her husband's bank account, but no reconciliation or cash flow statement was filed to satisfactorily explain the source. At the same time, the full addition was found to be excessive in the given factual background because the withdrawals substantially covered the deposits.

Conclusion: The addition was restricted to a lump sum amount of Rs. 2 lakhs, granting partial relief to the assessee on the cash deposit issue.

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