Cash deposit source explanation accepted in part, with partial relief granted despite incomplete corroborative records.

Cash deposit in the assessee's bank account was examined as potential unexplained investment under section 69 of the Income-tax Act. The assessee explained that the funds arose from liquor business receipts and were reflected in audited books, while the lower authorities rejected the claim for lack of full supporting records. On the material available, the Tribunal accepted that the audited accounts and auditor verification supported the source explanation to some extent, though complete corroborative documentation was not produced. It therefore did not sustain the addition in full and granted partial relief by accepting 50% of the disputed cash deposit as explained.

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Issues: Whether the cash deposit of Rs. 28 lakh in the bank account was liable to be treated as unexplained investment under section 69 of the Income-tax Act, 1961, or whether relief was warranted on the basis of the audited books and business explanation.

Analysis: The assessee claimed that the deposit represented cash generated from liquor business and reflected in the audited accounts, while the lower authorities declined relief for want of supporting books, bills, and complete substantiation. On the material available, the Tribunal found that the audited books had been verified by the auditors and did support the explanation to some extent, though the assessee had not produced a complete set of corroborative records before the lower authorities. In the overall facts, the Tribunal considered it to grant partial acceptance of the source explanation rather than sustain the addition in full.

Conclusion: The addition was not sustained in full and 50% of the disputed cash deposit was accepted as explained, resulting in partial relief to the assessee.

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