Addition cannot be made by applying prudent man’s behaviour test

Jaya Aggarwal Vs ITO (Delhi High Court) The Assessing Officer noticed and had asked the appellant to explain source of deposit of Rs. 1,60,000/- in cash in her bank account on 13th January, 1998. The appellant had explained that she had withdrawn Rs. 2 lakhs in cash from her bank account on 2nd May, 1997 and cash deposit of Rs. 1,60,000/- was from the amount withdrawn. This withdrawal was to buy property for which earnest money in cash was to be paid. As the deal could not be finalized and Rs. 1.60.000/- was re-deposited in the bank. The Assessing Officer rejected the explanation observing th...