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of <h1>Reopening of assessment for unexplained cash deposits found to be relative's money-transfer commissions; no further tax addition.</h1> Reopening of assessment challenged additions for unexplained cash deposits; tribunal found bank statements showed the assessee's account used by a ... Reopening of assessment u/s. 147 - addition of cash deposits - AR reiterated the submissions made before the lower authorities and submitted that the assessee is a salaried teacher and had no independent business activity. The cash deposits were not the income of the assessee but represented business receipts of his son from money transfer activity, wherein only commission income was earned. HELD THAT:- As it is noticed that the account of the assessee has been used by his son for transfer of amounts collected from labourers to various places. In the case of the son, the amount of commission has been determined @ Rs. 40 per instrument/transaction. The assessee has also shown similar income @ Rs. 40 per instrument/transaction. The modus operandi is clearly discernible from the bank statements, which reflect cash deposits followed by immediate transfers through banking channels. We are satisfied that the commission charged at Rs. 40/- per instrument/transaction is reasonable and correct. Since such commission income has already been offered to tax, we hold that no addition is called for in this case. Appeal of the assessee is allowed. Issues: Whether the addition of Rs. 29,31,364 made by treating bank cash deposits as unexplained income by estimating profit in a money transfer business is sustainable.Analysis: The Tribunal examined the material on record including bank statements showing cash deposits followed by immediate transfers, the stated business model that the account was used for third-party money transfer transactions, and the fact that commission per transaction had been offered to tax. The Tribunal noted that identical modus operandi and commission determination had been accepted in earlier assessments in respect of the person conducting the transfer business. The Tribunal found the commission rate of Rs. 40 per transaction to be reasonable and supported by the transaction pattern evidenced in the bank statements, and observed that the assessee had declared commission income corresponding to the transactions.Conclusion: The addition of Rs. 29,31,364 is not warranted and the appeal is allowed in favour of the assessee.
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