Cash deposits treated as business turnover, with income estimated at a net profit rate instead of full unexplained taxation.

Cash deposits were treated as business turnover rather than unexplained money, and income was to be estimated by applying a net profit rate instead of taxing the full deposits under section 69A. On the facts and circumstances, the agreed approach was partial relief to the assessee, with assessment confined to 15% of the cash deposits treated as turnover. The operative effect was that the Assessing Officer was directed to compute income on that estimated basis rather than bring the entire amount to tax as unexplained cash deposits.

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Issues: Whether the cash deposits of Rs. 10,67,500 were to be assessed in full under section 69A or treated as business turnover with income estimated by applying a net profit rate.

Analysis: The dispute centred on the character of the cash deposits and the proper method of assessment. After hearing both sides, a consensus was reached that the amount should be treated as business turnover. In light of that agreement and the facts and circumstances of the case, estimation of income by applying a net profit rate of 15% was considered appropriate instead of taxing the entire deposits as unexplained money.

Conclusion: The assessee obtained partial relief, and the Assessing Officer was directed to compute income at 15% of the cash deposits treated as business turnover.

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