Bona fide delay condonation and presumptive income estimation applied where bank credits and cash deposits formed one business turnover.

Delay of 930 days in filing the appeal was accepted as bona fide because the assessee relied on a tax consultant and came from a rural background, so the appeal was admitted in the interest of justice. On the tax issue, bank credits were treated as business receipts and the demonetisation cash deposit was held to form part of the same turnover, so no separate addition was justified. In the absence of regular books, income was estimated on a presumptive basis under section 44AD at 8% of gross receipts, subject to tax credit verification.

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Issues: (i) Whether the delay of 930 days in filing the appeal deserved to be condoned. (ii) Whether the cash deposit during demonetisation and the related bank credits could be separately added, and what net profit rate should be applied to the business receipts.

Issue (i): Whether the delay of 930 days in filing the appeal deserved to be condoned.

Analysis: The delay was attributed to dependence on the tax consultant and the assessee's rural background. The explanation was accepted as bona fide and not intended to secure any advantage by delay. In the interest of justice, the appeal was admitted.

Conclusion: The delay was condoned in favour of the assessee.

Issue (ii): Whether the cash deposit during demonetisation and the related bank credits could be separately added, and what net profit rate should be applied to the business receipts.

Analysis: The bank credits were accepted as business receipts, and the cash deposit formed part of the same business turnover. Separate addition for the cash deposit was therefore not justified. As the assessee had not maintained regular books, the income was to be estimated on presumptive basis under section 44AD of the Income-tax Act, 1961 at 8% of the gross receipts.

Conclusion: The separate addition for cash deposit was deleted, and income was recomputed by applying 8% net profit on the gross receipts, subject to tax credit verification.

Final Conclusion: The assessee obtained partial relief, with the assessment modified by deleting the separate cash-deposit addition and substituting a presumptive profit computation for the business receipts.

Ratio Decidendi: Where bank credits are accepted as business receipts, a separate addition cannot be made for cash deposits forming part of the same receipts, and in the absence of regular books the income may be estimated on a presumptive basis under the applicable statutory profit rate.

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