AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (10) TMI 899
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....d u/s.147 of the Act and order of assessment u/s.143(3) r.w.s.147 was passed on 28.03.2015. 3. The learned CIT(A) has erred in confirming the addition of Rs.9,39,54,486/- being 30% of the total addition of Rs.31,31,81/622/- treating it as unexplained cash deposits in the bank account. 4. The order of the learned CIT (A) is illegal/unjustified and against the principles of natural justice. 3. The Grounds of Appeal (ITA No. 02/Rjt/2019) raised by the Revenue reads as under: 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and on facts in deleting the 70% of the addition of Rs. 31,31,81,622/- made on account of unexplained cash deposit. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the A.O. 3. It is, therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the A.O. be restored to the above extent. 4. The brief facts of the case is that the assessee is an individual and engaged in the business of money transfer/Angadia Servicers by charging commission as percentage of value of money transferred. The ass....
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....he order, he partly allowed the appeal filed by the assessee. 6. Aggrieved against the same, both the Assessee and the Revenue are in appeal before us. 6.1. Ld. A.R. Shri R.K. Doshi appearing for the assessee submitted that he is not pressing ground nos. 1 & 2 namely reopening of assessment, the same are dismissed as not pressed. The only effective ground is the addition of Rs. 9,39,54,486/- being 30% of the addition of cash deposit of Rs. 31.31 Crores as unexplained cash deposits in the bank account by the Ld. CIT(A) is illegal and unjustifiable. The Ld. A.R. submitted a detailed Paper Book containing Rejoinder to the Remand Report, Statement recorded before Director General of Central Excise Intelligence, Zoanl Unit, Ahmedabad in the case of the assessee as well as in the case of Shailesh Marvaniya on 05.05.2018 and various decisions passed by the Tribunal and Gujarat High Court. The Ld. Counsel further submitted the additions made in the case of Shri Samir Kamruddin Makhani by the Ld. CIT(A) were being deleted by the Co-ordinate Bench of this Tribunal vide order dated 04.06.2020 in IT(SS)A No. 138 & 119/Rjt/2017 held as follows: 19. The Ld. A.R. also contended tha....
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....xpenditure of personal nature out of the cash withdrawn from the bank. Thus we are of the view that the amount of cash deposits alone cannot be treated as income of the assessee. Thus the action of the AO of making addition, on accounts of all deposits made in the bank accounts of the appellant is without any justification and resulting to the high pitch assessment. 27. In addition to the above, it is also pertinent to note that the assessee in the statement furnished under section 132(4) of the Act, has disclosed the name of certain/major parties of the ceramic manufacturers on whose behalf he was accepting the money from the dealers which was finally returned to such manufacturers. The relevant question raised to the assessee and its answer by the assessee is reproduced as under: Q-3 PI. Explain your main profession/service. Ans. The manufacturers of Morbi who sells its goods in Gujarat as well as outside Gujarat, the payment thereof are collected through my account. This means the cash are deposited in my account and on this amount I collect Rs. 50 to Rs. 100/ lacs as commission and balance is paid to the seller in cash. Q-4. 'As stated by....
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....ous kinds into the tax net. The income-tax authorities are not concerned about the manner or means of acquiring income. The income might have been earned illegally or by resorting to unlawful means. Illegality tainted with the earning has no bearing on its taxability, income generated by engaging in liquor trade, generally called as res extra commercium, otherwise known as trade in crime, or income earned by way of selling Khadhi products, are one and the same for the tax authorities. The assessee, having acquired income by unethical manner or by resorting to acts forbidden by law, cannot be heard to say that the State cannot be a party to such sharing of ill-gotten wealth. Allowing such income to escape the tax net would be nothing but a premium or reward to a person for doing an illegal trade. In the event of taxing the income of only those who had acquired the same through legal manner, the tendency of those who acquire income by illegal means would increase. It is not possible for the income tax authorities to act like police to prevent the commission of unlawful acts, but it is possible for the tax machinery to tax such income. During such process, strict rules of evidence are....
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....ngaged as dealer of ceramic manufacturer at the rate of 25% of the turnover without bringing any material on record. Accordingly, we are not inclined to make any reference to such finding of the learned CIT (A). 32. There was no material found during the course of search proceedings suggesting that the assessee was acting as a dealer of ceramic manufacturer. Therefore, the question of making any investment in such business does not arise. Accordingly we are of the view that there cannot be any addition on account of investment of Rs. 13,53,224/- in such undisclosed business of the assessee. 33. The next question arises what should be the rate to be applied determining the income of the assessee from its activities of money transfer. As such, none of the authority below has brought anything on record suggesting the rate to be applied for determining the income of the assessee from its activities. Accordingly, in the absence of such information available on record, we accept the rate of the income disclosed by the assessee in his income tax return. 34. In view of the above and after considering the facts in totality we hold that the assessee was acting as m....
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....ity provided to its customers. The firm receives cash from the beneficiary and gives cheque in lieu thereof. The cheque is drawn in favour of the beneficiary. For arranging this transaction, the firm charges commission. Reference has been made in the reply to instances where the petitioner has received cash from parties and has issued cheques in lieu thereof which were deposited by such parties in its account and the cheques were cleared at Rajkot. Based on this, the Assessing Officer had stated that she had reason to believe that income chargeable to tax has escaped assessment on account of the failure on the part of the petitioner to disclose fully and truly all material facts. Thus, while it is the case of the respondent that it is the business of the petitioner to accept cash and issue cheques in lieu thereof, it is also the case of the respondent on the basis of the instances cited in the affidavit, that the cash deposits received by the petitioner are in the nature of undisclosed income, despite it being the specific case of the respondent that the petitioner had issued cheques in lieu of cash received by it which had been encashed by the concerned party by depositing the sam....
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....ion of the revenue that it represented by any undisclosed income of the assessee. Noting the fact that the assessee into business of Shroff and earned only commission on the mandatory transactions carried out by it, the cash deposits representing money belonging to his customers. 9. In view of the above, we see no reason to interfere in the order of the Ld. CIT(A) deleting the addition made of cash deposits amounting to Rs. 224.53,23,993/-. The grounds of the appeal raised by the revenue is dismissed. 6.5. Thus pleaded that the additions made by the Ld. CIT(A) is to be deleted. The assessee also further submitted that the commission amount of 0.25% per lakh deposit in the bank account to be assessed to tax. 7. The Ld. CIT DR Mr. Shramdeep Sinha appearing for the Revenue strongly objected to the above contention and submitted during the reassessment proceedings, the assessee has not find any details before the Assessing Officer but whereas filed various details during the Remand proceedings. The assessee failed to submit confirmation from the parties from whom it has claimed cash receipts, PAN of such parties. In absence of the same, the genuineness of the credit tran....
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....ions of the Income Tax Act is to tax income of the assessee, whether it was from legal or illegal source. Therefore the principles for determining the income will remain the same even the source of income is illegal in nature as held by the Hon'ble High Court of Madras in the case of CIT vs. K. Thangamani. Thus the Co-ordinate Bench held that after considering the facts in totality it was held that the assessee was acting as money transfer agent on behalf of the parties engaged in ceramic manufactures. Accordingly allowed the assessee's appeal and dismissed the Revenue's appeal. 8.1. It is further seen in assessee own case in ITA No. 193/Rjt/2016 relating to the Assessment Year 2006-07, the Coordinate Bench of this Tribunal dismissed the Revenue appeal by holding "during the assessment proceedings, the assessee recorded his statement and categorically explained the nature of transaction that he is getting commission at Rs. 0.25 paise on transaction of Rs. 1 lakh. Therefore the cash deposit in the bank account cannot be treated as the income of the assessee. It was further observed that cash deposits and withdrawals were made regularly during the year under consideration. Therefo....