Unaccounted cash receipts require verified findings on tax treatment before deletion of additions can be sustained.

Deletion of the addition for unaccounted cash receipts could not stand where seized papers indicated actual receipts and surrounding material suggested payment toward land purchases, but the factual basis was not properly verified. The record did not conclusively show whether the amounts had been assessed to tax or whether due tax had been paid. Because the first appellate authority proceeded on an incorrect premise that the receipts had already been offered to tax and verified, fresh findings on acceptance of the amounts by the concerned persons and their tax treatment were required, and the matter was restored for reconsideration.

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Issues: Whether the deletion of the addition made on account of unaccounted cash receipts from undisclosed sources could be sustained when the factual basis regarding acceptance of receipts by the concerned persons and their tax treatment was not properly verified.

Analysis: The addition was made on the basis of seized papers reflecting actual receipts and the surrounding material indicated that certain persons had accepted payment towards purchase of land. The record, however, did not conclusively establish whether the amounts had been assessed to tax or whether due taxes had been paid. The deletion by the first appellate authority proceeded on an incorrect factual premise that the amounts had already been offered to tax and verified by the department. In these circumstances, a further finding on the acceptance of the amounts by the concerned persons and their tax treatment was necessary.

Conclusion: The deletion could not be sustained on the existing record, and the matter was restored for fresh findings.

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