2023 (12) TMI 133

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....g out of the order passed U/s. 144 of the Income Tax Act, 1961 [the Act], dated 5/12/2019 for the AY 2017-18. 2. Brief facts of the case are that the assessee is a firm engaged in the IDEA Cellular sales and service point in the name and style of Dhairya Lakshmi Cellular by providing facility of sales, bill collections, post-paid and prepaid recharges for Mobile SIMs and Top-up sales for which commission is received by the assessee as an agent. For the impugned assessment year the assessee has not filed its return of income as the assessee does not have any taxable income. On verification of the data relating to 'cash deposits during the demonetization period' available in AIMS module of ITBA, it is noticed that there were substantial ca....

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....nd deposit the same in to his bank accounts in exchange. In this regard the Ld. AO relied on the Notification given by the Central Government dated 8/11/2016. The Ld. AO further observed that the assessee is not one of the specified persons like carrying on business in petrol bunks, gas agencies etc., to receive SBNs against sales. Therefore, the Ld. AO treated the SBNs deposited during the demonetization period amounted to Rs. 10,14,000/- as unexplained money U/s. 69A of the Act for taxation as provided U/s. 115BBE of the Act. Further, the Ld. AO also initiated the penalty proceedings U/s. 271AAC of the Act in respect of the said unexplained income. Thus, the Ld. AO determined the total income of the assessee at Rs. 10,14,000/- and pass....

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....ning the addition of Rs. 10,14,000/- made by the Assessing Officer U/s. 69A of the Act towards alleged unexplained cash deposits in bank account. 3. The Ld. CIT(A) ought to have held that the Assessing Officer is not justified in charging the above said addition to tax at higher rate by invoking section 115BBE of the Act. 4. Any other grounds may be urged at the time of hearing." 4. At the outset, the Ld. Authorized Representative [Ld. AR] submitted that during the course of assessment proceedings, the Ld. AO failed to verify / consider the documentary material as well as the details available on record and made the addition under the head unexplained cash deposits. The Ld. AR further submitted that the sources of the c....

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.... to the IDEA Cellular and during the demonetization period. Further, the RBI as well as the Central Government have also approved for making payments towards pre-paid mobile top-up to a limit of Rs. 500/- for every top-up through their Notifications mentioned supra. The Ld. AR further submitted that the Ld. AO has also wrongly interpreted the provisions of the Act by invoking the provisions of section 69A r.w.s 115BBE of the Act. The Ld. AR also submitted that the Ld. CIT(A)-NFAC ought to appreciated all the facts and submissions made before the Ld. AO as well as before the Ld. CIT(A)-NFAC but failed to do so and fell into error in confirming the addition made by the Ld. AO by stating that the assessee has not furnished any satisfactory evi....

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....f the Ld. Revenue Authorities. It is fact that the assessee has made deposits worth Rs. 10,14,000/- in its bank account with Central Bank of India. It is the case of the Ld. AO that the deposits were made by the assessee during the demonetization period with SBNs which is an unaccounted money under the guise of collection of bills and also providing pre-paid and post paid bookings and therefore the Ld. AO brought the deposits amounting to Rs. 10,14,000/- to tax and made an addition U/s. 69A r.w.s 115BBE of the Act under the head unexplained cash deposits. On appeal, the Ld. CIT (A)-NFAC dismissed the appeal of the assessee by holding that the onus is on the assessee to provide the satisfactory explanation with respect to the deposits made i....

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....collected amounts initially into the assessee's (service provider or agent) account and later remits the same to the IDEA Cellular's account through ECS. It is also pertinent to note that the assessee being a service provider on behalf of IDEA Cellular is responsible for collection of moneys from the pre-paid and post-paid subscribers and the IDEA Cellular holding the position of Principal pays commission / incentives to its agents / service providers (assessee in the present case). Therefore, the assessee acted merely as an agent to the IDEA Cellular and during the demonetization period, the RBI as well as the Central Government have also approved for making payments towards pre-paid mobile top-up to a limit of Rs. 500/- for every top-up t....