Unexplained cash receipts found to be an advance under an agreement to sell where contemporaneous evidence and payer confirmation exist.

Whether an addition as unexplained cash receipt was sustainable where the assessee, an agriculturist, produced an agreement to sell agricultural land, contemporaneous evidence of an advance receipt and the payer's confirmation; the tribunal found the assessee discharged the evidentiary onus to establish nature and source of the cash, and that subsequent non-registration of the sale deed did not negate the contemporaneous evidence. Outcome: the addition was deleted and the appeal allowed in favour of the assessee.

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Issues: Whether the addition of Rs. 29.20 lakhs to the assessee's income as unexplained cash receipt, despite evidence of an advance received under an agreement to sell agricultural land and confirmation by the payer, is sustainable.

Analysis: The assessee, an agriculturist, declared agricultural income and produced evidence that Rs. 29.20 lakhs was received as an advance for sale of agricultural land under an agreement to sell, with the payer (also an agriculturist) confirming the payment and the cash exchange. The assessment was framed under Section 143(3) of the Income-tax Act, 1961 and the assessing officer added the amount as income despite these confirmations. The non-registration of the sale deed subsequently was not shown to negate the contemporaneous evidence of advance receipt, the agreement to sell, or the payer's confirmation. The assessee discharged the evidentiary onus to show the nature and source of the receipt.

Conclusion: The addition of Rs. 29.20 lakhs is not sustainable and is deleted; the appeal is allowed in favour of the assessee.

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