Unexplained cash credit under section 68: photocopy of sale agreement and unsupported explanation were insufficient to prove cash deposit source.

Cash deposits were treated as unexplained under section 68 because the assessee failed to prove the source with authentic, corroborative evidence. A photocopy of an agreement to sell, unsupported by the original document, direct verification from the alleged purchaser, or surrounding evidence of an actual transaction, was held insufficient. The explanation was found inconsistent with normal human conduct and not established on the preponderance of probabilities applicable in income-tax proceedings. The addition was therefore sustained as unexplained cash credit.

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Issues: Whether the addition made under section 68 of the Income-tax Act, 1961 on account of cash deposits was liable to be deleted on the basis of a photocopy of an agreement to sell and the surrounding circumstances.

Analysis: The assessee failed to produce authentic or corroborative evidence to establish the source of the cash deposits. The only material relied upon was a photocopy of the agreement to sell, which was not supported by the original document, direct verification from the alleged purchaser, or any surrounding evidence showing actual completion of the transaction. The explanation was found inconsistent with normal human conduct and unsupported by the preponderance of probabilities applicable in income-tax proceedings. The objection regarding the validity of the stamp paper after six months did not advance the assessee's case, since the real issue was the failure to discharge the evidentiary burden.

Conclusion: The addition as unexplained cash credit was sustained and the assessee's claim for deletion failed.

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