Unexplained cash deposits partly accepted where sale deed proceeds showed a temporal nexus, but proof remained incomplete.

Cash deposits treated as unexplained were partly accepted as sourced from sale consideration received under earlier sale deeds, because the deposits showed a temporal nexus with those transactions. The assessee, however, did not satisfactorily discharge the burden of proving all relevant facts before the lower authorities, so the explanation was accepted only in part. The addition was therefore restricted, with relief granted for the balance amount.

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Issues: Whether the addition made in respect of cash deposits as unexplained was liable to be sustained in full or restricted on the facts of the case.

Analysis: The assessee claimed that the cash deposits were linked to sale consideration received by the grandfather through sale deeds executed in the preceding period. The deposits were found to have a temporal nexus with those sale deeds, but the assessee did not satisfactorily discharge the onus of proving all relevant facts before the lower authorities. In these circumstances, the deposits were held to merit only partial acceptance of the source explanation.

Conclusion: The addition was restricted to Rs. 10 lakhs and relief was granted for the balance amount.

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