Cash deposit explanations accepted where affidavits and agricultural records remained unrebutted; section 69 addition deleted.

Documentary evidence and sworn affidavits can satisfactorily explain cash deposits for section 69 purposes where they are not rebutted by cross-examination or contrary material. An agreement to sell agricultural land was accepted as proof of advance money, and registration was not treated as compulsory to establish receipt of the cash, so the addition of the deposit was deleted. Agricultural receipts supported by lease deeds, J-Forms and jamabandi were also accepted as explaining the second deposit, and the addition was deleted because the revenue did not discredit the records or the sale proceeds.

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Issues: (i) Whether cash deposit of Rs. 10 lakh was satisfactorily explained as advance received under an agreement to sell agricultural land, so as to escape addition under section 69; (ii) Whether cash deposit of Rs. 6.75 lakh was satisfactorily explained as agricultural income from self-owned and leased land, so as to escape addition under section 69.

Issue (i): Whether cash deposit of Rs. 10 lakh was satisfactorily explained as advance received under an agreement to sell agricultural land, so as to escape addition under section 69.

Analysis: The agreement to sell was treated as a valid piece of evidence, and registration was held not to be compulsory for proving the receipt of advance. The affidavits of the witnesses supporting execution of the agreement and receipt of cash were not challenged by cross-examination or rebutted by contrary material. In the absence of any material discrediting the sworn affidavits, the explanation of the source of cash deposit was accepted as reasonably probable.

Conclusion: The addition of Rs. 10 lakh was deleted and the issue was decided in favour of the assessee.

Issue (ii): Whether cash deposit of Rs. 6.75 lakh was satisfactorily explained as agricultural income from self-owned and leased land, so as to escape addition under section 69.

Analysis: The documentary record, including lease deeds, J-Forms and jamabandi, was accepted as establishing that agricultural activity was carried on jointly with the assessee's father and on leased land. The revenue did not dispute the genuineness of the agricultural receipts reflected in the J-Forms, and the existence of funds from agricultural sale proceeds was treated as sufficient explanation for the deposit. The rejection based only on the name reflected in the father's records was not found sufficient to dislodge the explanation.

Conclusion: The addition of Rs. 6.75 lakh was deleted and the issue was decided in favour of the assessee.

Final Conclusion: The additions made towards unexplained cash deposits were not sustained, and the assessee's explanation regarding the source of the deposits was accepted on the material available on record.

Ratio Decidendi: Where documentary evidence and sworn affidavits satisfactorily explain the source of cash deposits and remain unrebutted by cross-examination or contrary material, an addition under section 69 cannot be sustained merely on suspicion or technical objections to registration.

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