Cash deposits explained by business records and cash flow evidence; section 69A addition deleted.

Cash deposits during demonetisation were held not taxable as unexplained money under section 69A where the assessee produced sale registers, purchase registers, sample sale bills and a cash flow statement to explain the source. The ITAT found that these records, together with the small-scale imitation jewellery business activity, showed availability of cash in hand and adequately explained the bank deposits. As the revenue did not rebut the explanation with contrary material, the assessee's onus was treated as discharged and the addition was deleted.

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Issues: Whether the addition of cash deposits as unexplained money under section 69A was sustainable when the assessee produced sale registers, purchase registers, sample sale bills and a cash flow statement to explain the source of deposits during the demonetisation period.

Analysis: The assessee had claimed to be carrying on imitation jewellery business on a small scale and to have maintained sales and purchase registers, supported by sample bills and cash flow details. These materials were found sufficient to show the availability of cash in hand and to explain the deposits made in the bank accounts. The factual explanation furnished by the assessee was not rebutted by the revenue authorities with contrary material, and the explanation regarding the source of the deposits was treated as having discharged the assessee's onus.

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

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