Telescoping of earlier disclosed income explained demonetisation cash deposits, defeating addition under section 69 and section 115BBE.

Cash deposits made during the demonetisation period were treated as satisfactorily explained through telescoping of earlier disclosed and taxed income. The assessee had already offered substantial additional income in prior years, and settlement proceedings had recognised the availability of that cash balance for adjustment. As the Revenue did not show that the earlier income had been deployed elsewhere or was unavailable, the principle against taxing the same income twice applied. On that basis, the proposed addition under section 69 read with section 115BBE was unsustainable.

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Issues: Whether cash deposits made during the demonetisation period were explainable by telescoping earlier disclosed and taxed income, so that no separate addition under section 69 read with section 115BBE was warranted.

Analysis: The assessee had already disclosed substantial additional income in the earlier assessment years, and the settlement proceedings had recognised telescoping of the cash balance against the additional income offered. The Revenue did not establish that the earlier disclosed income had been applied elsewhere or was unavailable to explain the later cash deposits. In such circumstances, the principle that the same income cannot be taxed twice applied, and the earlier taxed income was available as the source of the subsequent cash deposits.

Conclusion: The cash deposits stood satisfactorily explained by telescoping of earlier disclosed income, and the addition under section 69 read with section 115BBE was unsustainable, in favour of the assessee.

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