Presumptive taxation and bank deposits: business receipts accepted under the scheme could not be added as unexplained income.

An appeal filed within 30 days of service of the assessment order could not be treated as time-barred, particularly where the Revenue did not oppose the delay plea. Bank deposits could not be added as unexplained income when the assessee had disclosed the relevant business receipts under presumptive taxation and the business character of those receipts was not disputed. On those facts, the limitation objection failed and the addition was deleted.

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Issues: (i) Whether the appeal before the first appellate authority was barred by limitation when the assessment order was stated to have been served only later; (ii) whether the addition made on the basis of bank deposits could be sustained when the assessee's receipts were offered under presumptive taxation and the business nature of the receipts was not disputed.

Issue (i): Whether the appeal before the first appellate authority was barred by limitation when the assessment order was stated to have been served only later.

Analysis: The appeal was filed after the assessee obtained a copy of the assessment order, and the filing was within 30 days from the date of service. The delay plea was not opposed by the Revenue.

Conclusion: The appeal could not be rejected as time-barred and the objection on limitation was not sustainable.

Issue (ii): Whether the addition made on the basis of bank deposits could be sustained when the assessee's receipts were offered under presumptive taxation and the business nature of the receipts was not disputed.

Analysis: The assessee had disclosed the business receipts under the presumptive scheme, and the authorities did not doubt the nature of the business or the explanation that the bank deposits represented business receipts. In these circumstances, the addition treating the deposits as unexplained income was unsustainable.

Conclusion: The addition was deleted.

Final Conclusion: The assessee succeeded in the appeal and the impugned addition did not survive.

Ratio Decidendi: Where business receipts are accepted and taxed under presumptive taxation, corresponding bank deposits cannot be treated as unexplained income without a contrary factual finding; an appeal filed within the permitted period from actual service of the order is not barred by limitation.

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