Explained cash deposits from agricultural land sale proceeds cannot be taxed as unexplained income when supported by evidence.

Cash deposits in the assessee's bank account were held to be explained where contemporaneous documentary evidence and corroborated statements showed that the funds came from advance cash received on sale of ancestral agricultural land. The registered sale deed recorded receipt of cash, and the record also reflected withdrawals and an available cash balance sufficient to cover the deposits. On that factual basis, the proposed addition as income from undisclosed sources could not be sustained, and the addition was deleted in favour of the assessee.

---

---

Issues: Whether the addition of Rs. 61,50,000 as income from undisclosed sources on account of cash deposits in the assessee's bank account was justified.

Analysis: The assessee explained that the cash deposits were sourced from advance cash received on sale of ancestral agricultural land. The registered sale deed recorded receipt of cash of Rs. 1.18 crores, and the statement recorded during assessment corroborated the transaction. The record also showed cash withdrawals and available cash balance sufficient to explain the impugned deposit. In these circumstances, the cash receipt from sale of agricultural land constituted an available source of funds, and the addition treating the deposit as unexplained could not be sustained.

Conclusion: The addition was deleted and the issue was decided in favour of the assessee.

Ratio Decidendi: Where the assessee establishes a credible source for cash deposits through contemporaneous documentary evidence and corroborated statements, an addition for unexplained income cannot be sustained.

---