Unexplained cash deposits during demonetisation deleted where donor receipts and deposit pattern supported the assessee's explanation.

Cash deposits made during the demonetisation period were examined to see whether they constituted unexplained income. The assessee supported the deposits with donor receipts containing complete particulars and a month-wise comparison of cash deposits across several years, showing no abnormal spike in the relevant period. The deposits were also explained as higher festival-season collections. As the revenue authorities brought no material to establish undisclosed money and relied only on suspicion arising from demonetisation-related deposits, the addition was deleted and the deposits were not treated as unexplained income.

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Issues: Whether the cash deposits of Rs. 9,54,000 made during the demonetization period were liable to be treated as unexplained income of the assessee.

Analysis: The assessee produced receipts issued to donors containing complete particulars and a comparative month-wise statement of cash deposits across several financial years. The pattern of deposits did not show any abnormal deviation during the relevant period as compared with later years, and the period also coincided with the festival season when donations were stated to be higher. The revenue authorities did not bring any material to show that the deposits represented undisclosed money, and the addition rested only on suspicion arising from demonetization-related deposits.

Conclusion: The cash deposits were not proved to be unexplained income and the addition of Rs. 9,54,000 was deleted in favour of the assessee.

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