2026 (1) TMI 179 - AT - Income Tax

Opening cash-in-hand on 01.04.2016 and alleged unexplained money u/s 69A: addition sent back for verification.

Whether the opening cash-in-hand as on 01.04.2016 could be treated as unexplained money u/s 69A turned on proof of factual availability of cash at the ... Unexplained money u/s.69A - addition being opening balance of cash in hand as on 01.04.2016 - CIT(A) upheld the action of the AO on the grounds that the assessee failed to produce documentary evidence supporting the opening cash balance and further assessee had withdrawn only a minor amount towards regular expenses - CIT(A) held that the cash-in-hand claimed by the assessee could not be accepted - HELD THAT:- As before us, the Ld. AR submitted copies of the bank account statements and the relevant ledgers. Considering the bank statements filed, we direct the Assessing Officer to examine the same and verify the factual availability of cash at the end of the year based on these records. Appeal of the assessee is allowed for statistical purposes. Issues: (i) Whether the addition of Rs.40,55,603/- as opening cash balance treated as unexplained money under Section 69A is sustainable.Analysis: The appeal challenged the acceptance of the opening cash balance where the assessee produced bank account statements and ledgers showing withdrawals and balances. The Tribunal considered the records placed before it and directed the Assessing Officer to examine and verify the factual availability of cash at the end of the year based on those bank statements and ledgers.Conclusion: The addition under Section 69A is not sustained without verification; the matter is remitted to the Assessing Officer for factual verification and the appeal is allowed for statistical purposes in favour of the assessee.