Unexplained cash deposits restricted to commission income where records showed pass-through receipts and a 0.7% margin

Cash deposits and credit entries were examined in light of the surrounding material, including the remand proceedings, to determine whether they represented unexplained money or only the assessee's margin income. The record showed that cash receipts were being transferred to Vodafone West Ltd. and that the assessee earned only a 0.7% margin on E-top up sales. As no fresh material was produced to dislodge the factual basis accepted by the first appellate authority, the addition could not be sustained in full and income was restricted to the commission element of 0.7% of the transferred amount.

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Issues: Whether the addition made on account of cash deposits and credit entries as unexplained money was liable to be sustained in full, or whether the income was to be restricted to the commission element found from the material on record.

Analysis: The assessee's bank deposits were examined against the surrounding material, including the remand proceedings. The record showed that the cash receipts were being transferred to Vodafone West Ltd. and that the assessee was earning only a margin of 0.7% on E-top up sales. The Tribunal found no fresh material to dislodge the factual basis accepted by the CIT(A), whose conclusion rested on the remand report and the examination of the nature of deposits.

Conclusion: The addition as unexplained money was not to be sustained in full, and the restriction of income to 0.7% of the transferred amount was upheld, in favour of the assessee.

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