Cash deposits explained by sale agreement partly protected; unexplained balance remained taxable as unexplained money.

Cash deposits in the assessee's bank account were explained only in part by a contemporaneous agreement to sell and related circumstances. The ITAT held that the registered sale deed could not, by itself, displace evidence that sale proceeds were received in instalments under the agreement, so the explained portion of the deposits could not be treated as unexplained money under section 69A. However, the assessee failed to prove the source of the balance amount, and that part remained liable to addition. The result was partial relief: deletion of the addition to the extent covered by the sale agreement and sustenance of the balance.

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Issues: Whether the cash deposits in the assessee's bank account were fully explained by the sale agreement and the registered sale deed, and whether the addition made as unexplained money under section 69A was sustainable in full.

Analysis: The assessee produced an agreement to sell showing an agreed consideration substantially higher than the registered sale deed value and explained that cash deposits were made from sale proceeds received in instalments under that agreement. The registered deed was not treated as the sole document for testing the source of funds, since the agreement and the surrounding circumstances supported the assessee's explanation for a substantial part of the deposits. At the same time, the remaining amount beyond the explained sale proceeds was not supported by adequate evidence of source. On that footing, the assessee discharged the burden only to the extent of the sale consideration reflected in the agreement, while the balance remained unexplained.

Conclusion: The addition under section 69A was not sustainable in full. Relief was allowed for the amount covered by the sale agreement, and the balance addition was sustained, resulting in partial relief to the assessee.

Final Conclusion: The assessee succeeded only to the extent of the explained sale proceeds, while the unexplained balance continued to be taxable as unexplained money.

Ratio Decidendi: Where a taxpayer substantiates cash deposits by a contemporaneous agreement to sell and related circumstances, the explained portion cannot be rejected merely because the registered sale deed reflects a lower value; however, any balance lacking evidence of source remains liable to addition as unexplained money.

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