TaxTMI 
TaxTMI 
TaxTMI 
2023 (1) TMI 914
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....of the case the ld. CIT(A), NFAC erred in upholding the validity of order passed by the ld. AO. 3. That on the facts and in the circumstances of the case the ld. CIT(A), NFAC grossly erred in invoking provision of section 69 of the Act by substituting the provisions of section 68 of the Act as applied by ld AO. 4. That on the facts and in the circumstances of the case the ld. CIT(A)NFAC erred in sustaining addition of Rs. 1,59,789/- in respect of cash deposited in bank account particularly when the nature and source of such cash deposits had been explained with evidences. 5. That on the facts and in the circumstances of the case the ld. CIT(A), NFCA grossly erred in without analyzing the nature of transaction in right prospective and judicious manner and sustained the addition in a hypothetical way which is against principle of natural justice. 6. That on the facts and in the circumstances of the case he ld. CIT(A0 erred in invoking the provision of section 69A of the Act for sustaining addition whereas it is evident that the AO has not made out a case calling for an addition under section 69A of the Act. 7. That on the facts and in the circumstances of the case the CIT(A....
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....posits made in the savings bank accounts represent the LIC premium collected from policy holders in cash and deposited in the bank accounts for transferring the same to LIC, in his capacity as an authorised cash collector on behalf of LIC of India. The assessee furnished the authorisation letter issued by LIC of India in support of the said explanation. The assessee also furnished the details of premium amounts collected and paid by him, as available in the Premium Collection Portal of the LIC. However, the details available in the portal do not contain the names of the policy holders who paid the premium in cash to the assessee. The assessee was therefore required to furnish the cash book to facilitate further verification of the immediate sources of cash deposited in the bank. On verification of the cash book furnished by the assessee, the AO noticed that the cash balance available in the cash book was less than the amount of cash deposited in the bank on 38 days during the year. The aggregate of the cash deposited in the bank account in excess of cash balance available in cash book for the said 38 days amounted to Rs.11,59,789/-. 8. In this regard, the assessee explained durin....
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....nd 2340 The assessee did not furnish any contentions in respect of this ground of appeal during the appellate proceedings. The levy of interest under these sections is mandatory on satisfaction of the conditions specified in the respective sections. The assessee did not point out specific mistakes that occurred in computation of interest under these sections. This ground of appeal is accordingly dismissed Ground No.6 Initiation of penalty proceedings 12 In this ground of appeal, the assessee has disputed the action of the AO in initiating penalty proceedings u/s 271(1)(c) of the Act. This ground of appeal does not have any merit, as no prejudice is caused to the assessee on mere initiation of penalty proceedings Penalty proceedings are separate proceedings and levying of penalty is not automatic after its initiation. Therefore, this ground of appeal is premature and the same is hereby dismissed" 6. Against the above final show cause notice the ld. A/R of the assessee filed his written submission which is reproduced as under:- "1] That the assessee is an individual and derives commission income from LIC of India. In addition to this derives income from other source. 2] Fo....
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....ion in such bank account and same was also verified from the premium collection account issued by the LIC. Further the assessee has explained before the Ld AO that what so ever amount deposited in his bank account was belonging to his client as the assessee is only acted as an agent between the client and LIC and in lieu of providing such services he has obtained Commission income of Rs. 5,51,109% which is duly disclosed in the return of income and also accepted by the Ld AO as genuine. d] Further it is relevant to mention that the assessee had authorized to collect the premium from customers and issued the receipts on behalf of LIC. The assessee having grace period of 3 days from cash received from customer to transfer to LIC account and accordingly the assessee has deposited such amount in his bank account for transferred the amount to the LIC account. The documentary evidence had been submitted before the Ld AO during the assessment proceeding which established the direct nexus of source of cash deposit with the business activity carried out by the assessee. Therefore the allegation made by the Ld AO that the assessee failed to prove the source of cash deposit in bank account ....