Cash deposits treated as business receipts where sales and deposits were broadly commensurate with turnover.

Cash deposits in the assessee's bank account were accepted as business receipts where the sales figures for the year, and the preceding year, showed that cash sales and cash deposits during the relevant period, including the demonetisation period, were broadly commensurate with business turnover. On that factual basis, the deposits were treated as having a business source rather than as income from undisclosed sources, and the addition for unexplained cash deposits was deleted.

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Issues: Whether the addition made on account of alleged unexplained cash deposits in the assessee's bank account was sustainable.

Analysis: The cash deposits were examined alongside the assessee's sales figures for the relevant year and the preceding year. The comparative chart showed that the cash sales and cash deposits during the relevant period, including the demonetization period, were broadly commensurate with the assessee's business turnover. On that factual basis, the deposits were treated as having a business source and not as income from undisclosed sources.

Conclusion: The addition for unexplained cash deposits was deleted.

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