Unexplained money under Section 69A cannot rest solely on absence of bills for cash agricultural sales; addition deleted.

Addition under Section 69A challenged the classification of portions of declared agricultural receipts as unexplained money; the legal principle applied is that invocation of unexplained-money provisions requires that the assessee own the funds and fail to satisfactorily explain their nature and source. Given undisputed land ownership, cultivation, substantial documentary sales evidence and bank entries, and the rural practice of cash sales without formal bills, absence of bills alone did not render receipts unexplained. The appellate non appearance did not excuse merits adjudication; the addition was held unjustified and deleted on the available material.

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Issues: Whether the addition of Rs. 7,00,761 by treating part of the assessee's agricultural receipts as unexplained money under Section 69A of the Income-tax Act, 1961 is justified.

Analysis: The assessee declared agricultural receipts totaling Rs. 34,50,000 for cultivation on about 39 acres and furnished documentary evidence for sales to registered dealers amounting to Rs. 27,49,239. The impugned addition related to sales made directly in local markets for which formal bills were not produced. Invocation of provisions for unexplained money requires that the assessee be the owner of the money and fail to satisfactorily explain its nature and source. Given the undisputed ownership of agricultural land, the fact of cultivation, production of partial documentary evidence and bank entries, and the common practice of cash sales in rural agricultural markets, absence of formal bills alone does not demonstrate that the receipts are unexplained or originate from an unaccounted source. The appellate authority dismissed the appeal mainly on non-appearance without adjudicating the merits; adjudication on merits based on available material was required.

Conclusion: The addition of Rs. 7,00,761 treated as unexplained money under Section 69A of the Income-tax Act, 1961 is not justified and is deleted; the assessee's grounds in this regard are allowed.

Ratio Decidendi: Absence of formal bills for agricultural cash sales, when ownership of land, cultivation and substantial corroborative documentary evidence for major receipts are not controverted, is insufficient to classify such receipts as unexplained money under Section 69A of the Income-tax Act, 1961.

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