Cash deposits under section 69A: explained withdrawals and marriage gifts accepted, but unsupported agricultural income claims failed.

Cash deposits in a bank account were examined under section 69A, and the addition was restricted to the unexplained portion. The assessee substantiated part of the deposits as redeposits of earlier withdrawals from the same account, supported by the bank statement and cash flow pattern, and the explanation for marriage gifts received in the preceding year was accepted on the facts. For the remaining amount claimed as agricultural income and family savings, no credible documentary evidence was produced to show agricultural land, receipts, or a reliable accumulation trail, so that explanation failed. The addition was therefore deleted only to the extent satisfactorily explained and sustained for the balance.

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Issues: Whether the addition made under section 69A of the Income-tax Act, 1961 on account of cash deposits in the bank account was sustainable in full, or was liable to be deleted to the extent the assessee had satisfactorily explained the source.

Analysis: The assessee explained the cash deposits as arising from earlier withdrawals from the same bank account, marriage gifts received in the preceding year, and family savings including agricultural income. The bank statement and cash flow established that a part of the deposits was redeposited cash from prior withdrawals, and the proximity between withdrawals and redeposits supported that explanation. The explanation regarding marriage gifts was also accepted as reasonable on the facts. However, for the remaining amount claimed to be from agricultural income and family savings, no cogent documentary evidence was produced to establish ownership of agricultural land, agricultural receipts, or any reliable trail of accumulation. In proceedings under section 69A, the assessee must satisfactorily explain the source of the cash deposits, and unsupported assertions do not discharge that burden.

Conclusion: The addition was deleted to the extent of the deposits explained from earlier withdrawals and marriage gifts, and the balance addition was sustained.

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