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May 2026

Cash deposits – Source explained as advance received under agreement to sell agricultural land and agricultural income – Unregistered agreement supported by affidavits – No requirement of registration for such agreement – Affidavits not rebutted – Explanation held reasonable – Addition deleted.

By Jagdish T Punjabi, Chartered Accountant Devendra Jain & Aditya Bhatt, Advocates
Reading Time 2 mins

14. [2025] 128 ITR(T) 544 (Amritsar - Trib.)

Anbhao Parkash vs. ITO

A.Y.: 2012-13

DATE: 30.06.2025

Section: 69

Cash deposits – Source explained as advance received under agreement to sell agricultural land and agricultural income – Unregistered agreement supported by affidavits – No requirement of registration for such agreement – Affidavits not rebutted – Explanation held reasonable – Addition deleted.

FACTS

The assessee, an agriculturist, had deposited cash amounting to ₹16.75 lakhs in his bank account. Based on such deposits and the absence of a return of income, proceedings under section 147 were initiated, and the Assessing Officer made an addition under section 69, treating the cash deposits as unexplained.

The assessee explained that a sum of ₹10 lakhs was received in cash as advance against an agreement to sell agricultural land, and the balance amount was sourced from agricultural income earned from land cultivated jointly with his father, including leased land.

The assessee f

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Where the assessee-trust was generating receipts from certification fees, membership fees and training programmes which were incidental to its main object of imparting education and skill development, and the assessee was not engaged in profit maximisation or charging disproportionately high fees, the activities could not be regarded as commercial activities but fell within “education” and were not hit by proviso to section 2(15).

Additions based on loose sheets/excel data seized during search – Assessee being a salaried employee with no business activity – No ownership or nexus of entries established – Entries found to be group financial projections and borrowings – No corroborative evidence or unexplained assets – Additions deleted.