Section 69A cash deposits explained as redeposits of earlier withdrawals were not treated as unexplained money.

Cash deposits were not to be treated as unexplained money under section 69A where the assessee produced bank statements showing prior cash withdrawals and later redeposits. The Tribunal found that the revenue did not dispute the withdrawals or establish that the withdrawn cash had been used elsewhere or invested in another asset. The explanation that the deposits represented redeposit of earlier cash, including amounts withdrawn for medical expenses, was therefore supported by the available evidence. The addition under section 69A was deleted.

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Issues: Whether cash deposits in bank accounts were liable to be treated as unexplained money under section 69A when the assessee explained them as re-deposits of earlier cash withdrawals.

Analysis: The assessee furnished bank statements showing prior cash withdrawals and subsequent deposits, including withdrawals stated to have been made for medical expenses and later redeposited. The addition was sustained below mainly on the basis of the time gap between withdrawal and deposit and on an adverse view of the assessee's conduct. The Tribunal found that the revenue did not dispute the withdrawals themselves or show that the withdrawn cash had been diverted to any other use or investment, and held that the explanation of source for the deposits was supported by the available evidence.

Conclusion: The cash deposits were held not to be unexplained money, and the addition under section 69A was directed to be deleted.

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