Unexplained cash deposits were sustained where the taxpayer failed to reconcile receipts, GST records, and financial statements.

Cash deposits in a travel business were treated as unexplained income because the assessee failed to produce credible, verifiable evidence reconciling the deposits with turnover, GST returns, ledger entries, and financial statements. The claimed explanations of client receipts, reimbursements, service charges, and GST were found inconsistent with the record, so the onus under section 69A was not discharged and taxation under section 115BBE was sustained. The challenge based on natural justice also failed because the assessee was given an opportunity to respond, and the assessment order dealt with the material and inconsistencies rather than mechanically repeating the show-cause notice.

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Issues: (i) Whether the addition of cash deposits as unexplained money under section 69A read with section 115BBE of the Income-tax Act was justified on the facts and evidence on record. (ii) Whether the assessment order suffered from violation of natural justice or mechanical acceptance of the show-cause notice without independent application of mind.

Issue (i): Whether the addition of cash deposits as unexplained money under section 69A read with section 115BBE of the Income-tax Act was justified on the facts and evidence on record.

Analysis: The assessee claimed that the cash deposits represented client receipts, reimbursements, service charges, and GST arising from travel business transactions. The record, however, showed substantial discrepancies between the cash deposits, the declared turnover, the GST returns, and the financial statements. The assessee did not maintain separate authentic accounts or furnish a reliable reconciliation supported by verifiable evidence to explain the source and nature of the deposits. In such circumstances, the onus to satisfactorily explain the cash credits was not discharged.

Conclusion: The addition under section 69A read with section 115BBE was upheld and was against the assessee.

Issue (ii): Whether the assessment order suffered from violation of natural justice or mechanical acceptance of the show-cause notice without independent application of mind.

Analysis: The record showed that the assessee had been given opportunity to file replies and supporting material, and the assessment order dealt with the explanations, ledger entries, bank statements, GST returns, and reconciliation offered. The finding of the authority below was based on inconsistencies in the material and the failure to reconcile deposits, rather than on a mere reproduction of the show-cause notice.

Conclusion: The plea of violation of natural justice and mechanical assessment was rejected and was against the assessee.

Final Conclusion: The assessed addition was sustained in full and the appeal did not succeed.

Ratio Decidendi: When an assessee fails to furnish credible and verifiable evidence satisfactorily explaining the source and nature of cash deposits, the deposits may be treated as unexplained income under section 69A and taxed accordingly.

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