Cash deposits treated as business turnover cannot be partly taxed as unexplained income without cogent reasons or evidence.

Cash deposits were claimed as sale proceeds from small-scale vegetable and onion trading, and part of those deposits had already been accepted as business turnover. The ITAT held that the remaining deposits could not be treated as unexplained income on the same facts without cogent reasons or supporting material for the distinction. As the assessee's explanation was not rebutted by contrary evidence, the burden was treated as discharged. The addition of the balance cash deposits was deleted and the orders of the lower authorities were set aside.

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Issues: Whether the addition of Rs. 4,76,000 as unexplained income from cash deposits could be sustained when part of the deposits had been accepted as business turnover.

Analysis: The assessee's explanation was that the cash deposits represented sale proceeds from small-scale trading in vegetables and onions. The appellate finding accepted Rs. 6,00,000 as turnover but treated the balance deposits in specified bank notes as unexplained without giving reasons for the distinction. In the absence of material showing why the remaining cash deposits could not also be treated as business turnover, the burden cast on the assessee was held to have been discharged.

Conclusion: The addition of Rs. 4,76,000 was not sustainable and was deleted.

Final Conclusion: The appeal was allowed and the orders of the lower authorities were set aside.

Ratio Decidendi: When cash deposits are partly ed as business turnover on the same set of facts, the remaining deposits cannot be treated as unexplained income without cogent reasons or supporting material.

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