Joint bank deposits and estimated agricultural income can reduce unexplained additions where surrounding facts support apportionment and source.

Unexplained bank deposits in a joint account operated by either spouse need not be attributed wholly to one co-holder; the unexplained credits were apportioned and only 50% was treated as assessable in the assessee's hands. Agricultural income may also be accepted on reasonable estimate where the assessee owns substantial agricultural land and surrounding facts make such income probable, even if an agreement produced as additional evidence is rejected under Rule 46A. On that basis, a further reduction of the unexplained addition was warranted, leaving only the balance taxable.

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Issues: (i) Whether the addition made under section 69 of the Income-tax Act could be sustained in full in respect of deposits in a bank account held jointly with the assessee's spouse. (ii) Whether agricultural income could be taken into account on estimate for explaining part of the deposits, notwithstanding rejection of the agreement as additional evidence under Rule 46A of the Income-tax Rules, 1963.

Issue (i): Whether the addition made under section 69 of the Income-tax Act could be sustained in full in respect of deposits in a bank account held jointly with the assessee's spouse.

Analysis: The bank account stood in the names of the assessee and her husband and was operated by either of them. On that footing, the entire unexplained deposit could not be attributed solely to the assessee. The shared nature of the account justified apportionment of the unexplained amount between the co-holders.

Conclusion: The addition could not be sustained in full against the assessee, and only 50% of the unexplained deposit was assessable in her hands.

Issue (ii): Whether agricultural income could be taken into account on estimate for explaining part of the deposits, notwithstanding rejection of the agreement as additional evidence under Rule 46A of the Income-tax Rules, 1963.

Analysis: The assessee owned agricultural land of substantial extent, and the returned income was below the taxable limit. The non-disclosure of agricultural income in the return did not by itself disprove the earning of such income. Even though the agreement produced before the appellate authority was not accepted as additional evidence under Rule 46A, the surrounding circumstances supported a reasonable estimate of agricultural income as a source for part of the deposits. On that basis, a further reduction from the assessed unexplained amount was warranted.

Conclusion: Agricultural income was accepted to a limited extent on estimate, resulting in a further reduction of the addition.

Final Conclusion: The assessment of the unexplained bank deposits was substantially reduced by apportioning the joint-account credits and by allowing an estimated agricultural income component, leaving only the balance taxable in the assessee's hands.

Ratio Decidendi: Where a bank account is jointly held and operated by either holder, unexplained deposits may be apportioned between the co-holders, and agricultural income may be accepted on reasonable estimate where ownership of agricultural land and surrounding facts make such income probable.

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