Unexplained bank deposits and failed agriculture receipt claim sustained where supporting documents were found non-genuine and unverified.

Cash deposits in bank accounts were treated as unexplained income where verification of the alleged payer denied the payments and independent inquiry showed the supporting bills and confirmations to be non-genuine; the plea to restrict the addition to peak credit or net profit was rejected. A claimed agriculture receipt was also disallowed for want of credible proof of genuine agricultural activity, and the cross-examination objection failed because no timely request was made and the adverse material had already been confronted during assessment. The additions were sustained.

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Issues: (i) Whether the cash deposits in the assessee's bank accounts, claimed to represent commission and sale proceeds, could be treated as unexplained income. (ii) Whether the addition of the claimed agriculture receipt and the objection based on denial of cross-examination warranted interference with the assessment.

Issue (i): Whether the cash deposits in the assessee's bank accounts, claimed to represent commission and sale proceeds, could be treated as unexplained income.

Analysis: The assessee's explanation was tested by verification with the alleged payer, who denied making the payments. Independent inquiry also indicated that the supporting bills and confirmations were not genuine and had been prepared by misuse of the letterhead of the stated firm. In these circumstances, the deposits were not accepted as explained business receipts. The plea for treating only peak credit or net profit was not accepted on the facts found.

Conclusion: The addition treating the cash deposits as unexplained was upheld, against the assessee.

Issue (ii): Whether the addition of the claimed agriculture receipt and the objection based on denial of cross-examination warranted interference with the assessment.

Analysis: The claim of agriculture receipt was rejected because no supporting evidence of genuine agricultural activity was produced, and the statutory bar under Section 156(1) of the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950 was treated as inconsistent with the asserted arrangement. The cross-examination objection also failed because the record did not show any request by the assessee for such cross-examination, while the adverse material had been confronted to the assessee during assessment proceedings.

Conclusion: The addition of the agriculture receipt and the rejection of the cross-examination objection were upheld, against the assessee.

Final Conclusion: The assessment additions were sustained in full and the assessee's appeal was rejected.

Ratio Decidendi: Where the supporting documents are found to be non-genuine on verification and the assessee fails to substantiate the source and nature of bank deposits or claimed receipts with reliable evidence, the additions as unexplained income are sustainable; a cross-examination objection does not succeed in the absence of a request made at the relevant stage and where the material has been confronted to the assessee.

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