Justification of bank loans: a matter of case-by-case decisions?

The Administrative Court of Appeal of Nancy issued two rulings in which it found that the explanations provided by the taxpayers were insufficient to establish that the amounts credited to their accounts did not constitute income.

In an earlier ruling, a taxpayer had failed to file a tax return and was subject to an assessment by the tax authorities, during whichadministration a sum of approximately 275,000 euros deposited in cash into his account constituted income. 

The taxpayer thus bore the burden of proving that the assessments were without merit due to the ex officio assessment procedure.

The man, who had been lucky enough to receive a check for 500,000 euros from the Française des Jeux in 2014, had made substantial cash withdrawals from his bank accounts in February and March of that year, totaling approximately 240,000 euros.

He stated that he had deposited the cash in a safe and then transferred it back into his bank account in April and May in order to purchase his house.

The Court, having noted a transfer to a notary’s office in the amount of approximately 220,000 euros, will nevertheless find that the taxpayer has not provided evidence that the cash deposited into the account in April and May came from the funds kept in his safe.

She therefore confirms the tax reassessment.

In a second ruling,administration found that a taxpayer had deposited more cash into his bank accounts than he had withdrawn during 2016 and 2017. They then asked the taxpayer to provide evidence of the source of that cash.

The taxpayer explained that, in order to avoid the effects of his bank’s bankruptcy and the potential consequences this might have on his savings, he had made substantial cash withdrawals in 2002 and 2012.

Following the discontinuation of 500-euro banknotes in 2016, he deposited cash into his bank account during 2016 and 2017.

Although the taxpayer provided explanations for the cash withdrawals in 2002 and 2012, the Court will rule that the explanations were vague and unverifiable and that the taxpayer therefore refused to comply with the request for supporting documentation.

She will then confirm the tax reassessment.

Case No. 1: CAA Nancy, April 9, 2026, No. 24NC01275

Decision No. 2: CAA Nancy, April 9, 2026, No. 24NC00807

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