Agricultural cash deposits during demonetisation accepted only in part where records support the source, with the balance taxed as unexplained money.

Cash deposits made during the demonetisation period may be accepted as agricultural income only to the extent they are supported by contemporaneous records; where the assessee produces land records, revenue certificates and cash receipts but cannot fully explain the entire deposit, the source may be estimated on the available material. In this document, agricultural activity was not disputed, yet complete evidence was lacking for the full cash deposit, so only the explained portion was accepted and the balance was treated as unexplained money taxable under section 69.

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Issues: Whether the cash deposits made during the demonetisation period were fully explainable from agricultural receipts, or whether part of the deposits were liable to be treated as unexplained money under section 69.

Analysis: The assessee produced land-holding records, revenue certificates and cash receipts to support the claim that the deposits arose from agricultural operations, and the assessment record did not dispute that agricultural activity was being carried on. At the same time, complete evidence was not available to explain the entire cash deposit of Rs. 11,54,500/-. In these circumstances, the source of deposits had to be estimated on the material available. The explanation was accepted only to the extent supported by the record, and the balance was treated as not satisfactorily explained.

Conclusion: The claim of agricultural source was accepted in part, and only the balance cash deposit was sustained as unexplained money taxable under section 69.

Ratio Decidendi: Where an assessee substantiates agricultural activity but fails to fully explain cash deposits, the explained portion may be accepted on estimation and the balance may be assessed as unexplained money under section 69.

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