Unexplained cash deposit addition requires verification of registered sale deeds; unregistered agreements cannot support deemed transfer.

Unexplained cash deposit additions under section 69 could not rest on unregistered sale deeds or an alleged gift from the assessee's father. After the 2001 amendments, an unregistered agreement to sell has no legal efficacy for section 53A of the Transfer of Property Act and cannot support a deemed transfer under section 2(47)(v) of the Income-tax Act. However, registered sale deeds in the record required limited verification to see whether sale proceeds were available with the father and could have been gifted to the assessee. The matter was therefore remanded for that restricted examination, and the addition was not sustained in its existing form.

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Issues: Whether the addition made as unexplained cash deposit under section 69 could be sustained on the basis of unregistered sale deeds and an alleged gift from the assessee's father, and whether the matter required remand for examination of the registered sale deeds alone.

Analysis: The cash deposit was not fully explained by the assessee with credible documentary support. The reliance placed on unregistered documents was found insufficient because, after the 2001 amendments, an unregistered agreement to sell has no legal efficacy for the purposes of section 53A of the Transfer of Property Act, 1882, and cannot be treated as an enforceable basis for transfer under section 2(47)(v) of the Income-tax Act, 1961. At the same time, the record showed that some registered sale deeds existed, and the possible cash generated from those registered transactions could legitimately be examined for the limited purpose of determining whether any amount was available to the father and could have been gifted to the assessee. The addition could not, therefore, be sustained in full without such limited verification.

Conclusion: The assessee succeeded only to the extent that the matter was sent back for limited verification of the registered sale deeds, and the addition was not finally upheld in its existing form.

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