TaxTMI 
TaxTMI 
2025 (12) TMI 1757
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.... The appellant is a licensed non-judical stamp vendor License No. 18/CH(S)/2008 dated 03.12.2008, issued by District Registrar, Chennai South) * The amounts deposited represented cash collections from sold of stamp papers, of which only commission income is taxable, not the entire turnover. * Supporting documents such as cash book, indents, and daily sales registers were duly filed, but were disregarded without proper verification. 2. Non- Consideration of evidence: * Loan of Rs,14,50,000/- availed from ICICI Bank (31.10.2015), which was part of available funds. * Salary /settlement income of Rs. 5,78,399/- from Amazon, which explained part of the bank transactions. * Rejecting of these explanations was arbitrary and without proper reasoning. 3. Violation of directions issued u/s. 263: The Principal CIT had specifically directed the AO to: * Obtain details of specified bank notes (SBN) from the bank; * Verify inflow/outflow of both SBI Accounts; * Examine the genuineness of stamp vending business as per TN stamp Vending Act, * These directions were not complied with, renderin....
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....s for the entire year. However, the AO failed to seek approval for conversion. Hence, the order u/s. 263 of the Act was passed by the learned Principal Commissioner of Income Tax, asking the AO to thoroughly verify the nature and source of cash deposit of Rs. 1,66,85,200/- made throughout the year in the light of his claim that he was carrying out stamp vending business. The AO noted that no positive material was brought on record to show that the cash deposited was the proceeds from sale of stamp vendor business which was carried out by the assessee. Therefore, in the absence of satisfactory explanation and evidence, an addition of u/s. 69A of the Act was made in the hands of the assessee as unexplained income for the impugned year by holding as under: "But the assessee failed to furnish samp duty register and submitted particulars of indent, details to Sub-Treasury Saidapet as cash Book. And the snapshot of bank account no 35328489692 for the same period i.e. 07.11.2016 to 14.11.2016 is as under: made in the A/c no 35328489692 bank account maintained with SBI, Velachery Branch, Chennai i.e. assessee was doing stamp paper vendor business and the money got from the custome....
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....disallowed. Further, the assessee had claimed Rs. 2,00,000/- as deduction u/s. 24(b) of the Act, on account of housing loan interest, the statement reflected interest payment of Rs. 43,383/-. Hence the claim of Rs. 2,00,000/- towards interest on housing loan was found to be incorrect and was disallowed". 5. Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A). Before the ld.CIT(A), the assessee challenged the issue of additions of Rs. 1,66,85,200/- made by the AO under 69A of the Act. After perusing the documents and details furnished by the assessee, the ld.CIT(A) confirmed the additions made by the AO by holding as under: - "7.1.2 During the appellate proceedings, the appellant has stated that he had furnished various documents before the PCIT during proceedings u/s. 263 of the Act as well as the AO during the proceedings u/s. 143(3) rws 263 of the Act, but nothing has been considered by the authorities. Before the appellate authority, he once again furnished form 16 received from the employer Amazon, copy of ICICI Loan, loan statement, bank statement of city bank, profit and loss account, copy of cash book, indent copies, and daily ....
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....ted before the FAA are on sample on random basis and there is no purchase - sale reconciliation of stamp papers bought and sold. Thus, the appellant has furnished partial self-serving documents with no third party contemporaneous evidences. 7.1.4 Further, the appellant has failed to refute the findings of the Assessing Officer that the amount of Rs. 5,78,399/- was received from his employer Amazon.com' directly into the appellant' bank account and so, it could not be the source of cash deposit in bank. Further, the appellant has failed to refute the findings of the Assessing Officer that the loan of Rs. 14,50,000/- from ICICI bank was disbursed 3 years ago on 31.10.2015 and so, it could not be the source of cash deposit in bank. Furthermore, the appellant has contended that the AO did not obtain details of SBN from the Bank, when he himself ought to have submitted the same before the AO. He has not referred to the relevant provisions of the Stamp vending Act of the Tamilnadu Government. For acceptance of proceeds, in cash and determination of his commission from the said business. He has not furnished the transaction details of inflow and outflow in the two bank accounts h....
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.... a copy of the bank statements of State Bank of India, account No.35328489692, Velachery branch for the period 01.04.2016 to 31.03.2017 together with the Daily Sales Register, and explained that the daily cash collections match the daily cash deposits made into the account amounting to Rs. 2,03,96,750/-. The consistent pattern of day-to-day deposits clearly shows that the amounts are nothing but daily stamp-paper collections from stamp paper sales which are deposited into State Bank of India, Account No.35328489692, Velachery branch. It was therefore submitted that the nature and source of the cash deposits were fully explained in view of the documentary evidence and explanations placed on record and consequently the assessee prayed that the addition sustained u/s. 69A of the Act may kindly be deleted in the interest of justice. 10. The assessee further contended that the claim for deduction of housing-loan interest of Rs. 2,00,000/- u/s. 24(b) of the Act was rejected by the Ld.CIT(A) without any discussion or finding, contrary to the mandate of section 250(6) of the Act, which requires a reasoned order on each ground. 11. Per contra, the ld.DR during the course of hearing su....
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....a licensed stamp vendor. Further, the assessee also filed a statement showing the purchase of stamp paper out of the cash deposits made regularly from the treasury. 14. On careful consideration of the facts and circumstances of the case and the documents furnished during the course of hearing, we find that the assessee has produced verifiable documents showing a clear one-to-one correlation between the stamp-paper sales and the cash deposits into the bank accounts on various dates and payment of such amounts to purchase the stamp paper from treasury along with indents for purchase of stamp paper. The daily sales register and the bank statements placed before us convincingly establish that the deposits represent daily cash collections from customers for purchase of stamp papers and thus, there was no unexplained cash deposits in his bank account as alleged by the AO. There is no material brought by the Revenue to discredit the genuineness of these documents or to suggest any alternative source for the deposits into the bank account of the assessee. When the assessee acts only as an agent and earns merely the commission income, the daily cash collections cannot be treated as unexp....