Presumptive taxation and section 68 cash deposits: tribunal reduced the addition after accepting business receipts from debtors.

Delay in filing the appeal was condoned on affidavit evidence because no material rebutted the explanation and the tribunal preferred substantial justice over technicality. On the section 68 dispute, cash deposits said to be recoveries from debtors were accepted as business receipts on the facts, supported by prior balance sheet material, debtor confirmations and identity particulars. As the assessee was a small trader eligible for presumptive taxation and had admitted business income at 8%, the full addition was not sustained; only the presumptive-income component of the disputed amount was upheld and the balance was deleted.

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Issues: (i) Whether the delay in filing the appeal deserved to be condoned. (ii) Whether the addition made under section 68 in respect of cash deposits stated to be recoveries from debtors was sustainable, or whether the amount should be taxed only to the extent of presumptive income.

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

Analysis: The delay was explained by affidavit, no adverse material was shown to rebut the explanation, and the statutory power to admit a delayed appeal on proof of sufficient cause was invoked. The approach favouring substantial justice over technicality was applied.

Conclusion: The delay was condoned and the appeal was admitted.

Issue (ii): Whether the addition made under section 68 in respect of cash deposits stated to be recoveries from debtors was sustainable, or whether the amount should be taxed only to the extent of presumptive income.

Analysis: The assessee was a small trader eligible for presumptive taxation and had accepted business income at 8%. The assessee had produced prior year balance sheet material, debtor confirmations, and supporting identity particulars. The rejection of the explanation for the entire amount was held unsustainable on the facts, but the business character of the receipts was accepted. To bring the dispute to an end, the amount was directed to be assessed at the presumptive rate applied to the disputed sum.

Conclusion: The addition under section 68 was not sustained in full; only Rs. 52,633 was upheld and the balance was deleted.

Final Conclusion: The assessee obtained only partial relief, with the impugned addition reduced to the presumptive-income component and the appeal disposed of accordingly.

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