Unexplained Cash Deposits: deletion where taxpayer links deposits to business receipts and presumptive taxation supports the claim.

Challenge to additions made as unexplained cash deposits and household expenditure was resolved by treating cash receipts as business sales supported by documentary evidence and presumptive taxation filing; the evidentiary linkage between deposits and business receipts undermined the unexplained cash deposit finding and no distinct disallowance for household expenses was justified on the specific facts, so the additions were deleted and the appeal allowed in favour of the taxpayer.

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Issues: (i) Whether the additions of Rs. 8,42,424 made under section 69A on account of cash deposits and Rs. 2,50,000 made on account of household expenses can be sustained.

Analysis: The Tribunal considered the factual material and submissions on record regarding cash deposits of Rs. 10,46,434 during the year and the assessee's explanation that the cash receipts arose from small business sales dispatched by courier. The Tribunal noted the assessee filed return under presumptive taxation and that the evidence furnished before the appellate authority was sufficient to link the cash deposits to business receipts. The Tribunal also examined the basis for the household expenditure addition and found that, on the specific facts and evidence, no separate disallowance on household expenses was warranted.

Conclusion: The additions of Rs. 8,42,424 under section 69A in respect of cash deposits and Rs. 2,50,000 on account of household expenses are deleted; the appeal is allowed in favour of the assessee.

Ratio Decidendi: An addition under unexplained cash deposits or household expenditure cannot be sustained where the assessee furnishes satisfactory explanation and evidence linking deposits to business receipts and where presumptive taxation treatment is applicable.

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