Unexplained cash deposits under section 69A fail when bank trail and confirmations show refunds of earlier advances.

Cash deposits can be treated as unexplained money under section 69A only where the assessee fails to substantiate the source with credible material. Here, the assessee supported the deposits with bank statements, confirmations and a consistent trail showing refunds of earlier advances paid for proposed property purchase; the Revenue did not disprove the advances, show the confirmations false, or conduct meaningful independent enquiry. On these facts, the initial burden was held to be discharged and mere suspicion was insufficient to sustain the addition, so the addition under section 69A was deleted.

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Issues: Whether cash deposits of Rs. 75,00,000 in the assessee's bank account were rightly treated as unexplained money under section 69A of the Income-tax Act, 1961.

Analysis: The assessee explained that the deposits represented refunds of earlier advances paid through banking channels for proposed purchase of immovable property, and supported the explanation with bank statements, confirmations, and correlation of advance payments with the refunds received. The documentary trail showed identity of the parties, genuineness of the transactions, and a plausible source for the cash deposits. The Revenue did not bring material to prove the confirmations false, did not disprove the earlier advance payments, and did not conduct meaningful independent enquiry to rebut the explanation. In these circumstances, mere suspicion was held insufficient to sustain the addition.

Conclusion: The addition of Rs. 75,00,000 under section 69A was not sustainable and was deleted in favour of the assessee.

Ratio Decidendi: Where an assessee substantiates cash deposits with contemporaneous banking evidence, confirmations, and a coherent explanation showing refund of earlier advances, the initial burden stands discharged and the onus shifts to the Revenue to rebut the evidence with cogent material before invoking section 69A.

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