Explained bank deposits as business receipts: contemporaneous records and commission income defeated treatment as undisclosed income.

Cash deposits in the bank account were held to be explained by contemporaneous evidence of business receipts, including payments to Idea Cellular Ltd. and commission income reflected in Form 26AS with TDS. On that material, the deposits were treated as turnover from sale of recharge coupons rather than income from undisclosed sources, and the addition was deleted. Mere absence of a formal agreement was insufficient where the surrounding records supported the assessee's explanation.

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Issues: Whether the addition made on account of cash deposits in the bank account could be sustained as income from undisclosed sources, or whether the deposits were explained as business receipts on which commission income had been earned.

Analysis: The bank statement showed that the cash deposits were substantially utilised for payments to Idea Cellular Ltd. The record also contained evidence of aggregate payments to the company and Form 26AS reflecting commission income with tax deducted at source. These materials supported the assessee's explanation that the deposits represented business turnover from sale of recharge coupons and not unexplained income. In these circumstances, the assessment of the deposits as income from undisclosed sources was not justified.

Conclusion: The addition was deleted and the explanation of the assessee was accepted.

Ratio Decidendi: Where bank deposits are supported by contemporaneous evidence showing corresponding business receipts and commission income reflected in tax records, they cannot be treated as unexplained income merely for want of a formal agreement.

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