Agreement to sell accepted as documentary proof of cash deposit source, leading to deletion of unexplained income addition.

Acceptance of an agreement to sell as documentary proof established the source of a specific cash deposit of Rs. 7,50,000, with the absence of a registered sale deed explained by the land's lawful character and transaction specifics; the agreement was treated as probative evidence sufficient to discharge the explanation requirement, distinct from prior treatment of a separate cash gift issue. Consequently, the prior addition treating the deposit as unexplained income was deleted and the taxpayer's challenge to that addition was allowed.

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Issues: Whether the addition of Rs. 7,50,000 made by the Assessing Officer as unexplained cash deposits (treated as undisclosed income) for assessment year 2012-13 is justified where the assessee produced an agreement to sell for the said amount.

Analysis: The assessee produced an agreement to sell evidencing receipt of Rs. 7,50,000 as sale consideration for land. The agreement was evaluated as documentary proof of the source of the cash deposit. The absence of a registered sale deed was explained by the nature of the land transaction (Lal Dora land) and the agreement to sell was treated as probative evidence. Prior deletion of a separate component of the addition (cash gift) was on the basis of the legal principle applicable to gifts and their treatment under the statute; that principle is distinct from proof required for sale proceeds. The agreement to sell directly addresses the source of the specific cash deposit in dispute and was accepted as sufficient to discharge the explanation requirement.

Conclusion: The addition of Rs. 7,50,000 is deleted and the assessee's appeal on this ground is allowed.

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