Demonetisation cash deposit addition under section 69A restricted after partial acceptance of the assessee's cash source evidence.

Cash deposits during the demonetisation period were examined under section 69A against the assessee's cash flow statements, bank records, land documents, agricultural income material, salary evidence, withdrawals and past cash balance. The Tribunal found that the lower authorities had not properly examined this supporting material and accepted that there was some basis for availability of cash. However, it also treated parts of the evidence as self-serving and insufficient to justify complete deletion of the addition. On that record, the Tribunal granted partial relief by restricting the addition to 10% of the disputed amount.

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Issues: Whether the addition made towards cash deposits during the demonetization period under section 69A was sustainable in full, or whether the assessee's explanations and supporting material warranted partial relief.

Analysis: The assessee produced cash flow statements, bank statements, land records, and material relating to agricultural income, salary income, withdrawals, and past cash balance to explain the source of deposits. The Tribunal found that these materials were not properly examined by the lower authorities and that the assessee had shown some basis for the availability of cash. At the same time, it held that some of the supporting documents were self-serving and did not justify complete deletion of the addition. Balancing the material on record and the possibility of revenue leakage, the Tribunal restricted the addition by adopting 10% of the disputed amount as taxable income.

Conclusion: The addition was not sustained in full and was reduced to Rs. 68,000, resulting in partial relief to the assessee.

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