Cash redeposits from earlier bank withdrawals cannot be treated as unexplained money merely because of a time gap.

Cash redeposits made during demonetisation were held not to be unexplained money under section 69A where the assessee showed earlier withdrawals from the same bank account and the deposits were broadly supported by the bank statement. The addition could not rest only on non-compliance or the time gap between withdrawal and redeposit; without independent inquiry showing that the withdrawn cash was unavailable or used elsewhere, the explanation remained reasonable. Once the withdrawals were accepted and exceeded the deposits, the burden was not to require proof of continuous cash retention through a cash book. The addition was deleted.

---

---

Issues: Whether cash deposits made during demonetisation, claimed to be redeposits of earlier cash withdrawals from the same bank account, were liable to be added as unexplained money under section 69A.

Analysis: The assessee was a salaried government employee and the cash deposits were supported by prior withdrawals reflected in the bank statement. The addition was made mainly on the basis of non-compliance and absence of detailed explanation, without any independent inquiry to show that the cash came from undisclosed sources or had been utilised elsewhere. In the facts proved on record, the explanation was reasonable and the mere time gap between withdrawal and redeposit could not, by itself, justify the addition. Once the source of cash withdrawals was accepted and the withdrawals exceeded the deposits, the burden could not be shifted back to the assessee to prove continuous cash retention by maintaining a cash book.

Conclusion: The addition under section 69A was not sustainable and was deleted in favour of the assessee.

Final Conclusion: The assessee succeeded on the sole surviving issue, and the assessment addition relating to cash deposits was set aside.

Ratio Decidendi: Cash redeposited out of earlier identified bank withdrawals cannot be treated as unexplained money under section 69A merely because of a time gap, unless the Revenue shows that the withdrawals were not available or were used elsewhere.

---