Unexplained cash balance addition fails where cash book and cash flow records show the carried-forward opening balance.

Cash balance additions as unexplained money under section 69A cannot be sustained where contemporaneous cash book extracts and a cash flow statement show the closing balance was carried forward as the opening balance in the next year. The discrepancy arose from comparing figures without properly considering the assessee's records, and the alleged difference in cash balance was not established on the material on record. The addition, with consequential tax treatment under section 115BBE, was therefore directed to be deleted.

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Issues: Whether the addition made towards alleged difference in cash balance as unexplained money under section 69A, with tax consequences under section 115BBE, was justified.

Analysis: The assessee produced cash book extracts and a cash flow statement showing that the closing balance on 31.03.2022 was carried forward as the opening balance on 01.04.2022. The discrepancy noticed by the Assessing Officer arose from comparing figures without properly considering the assessee's personal cash flow statement and the contemporaneous cash book records. On the material on record, the claimed difference in cash balance was not established.

Conclusion: The addition as unexplained money was not sustainable and was directed to be deleted in favour of the assessee.

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