TaxTMI 
TaxTMI 
2025 (2) TMI 1591
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....ra; 2.0 The Ld. CIT(A), before confirming the addition of cheques/RTGS deposits made in bank accounts of Rs. 1,37,69,087/-, ought to have considered the understated vital facts, being; a) The disputed deposits pertain to the sum received in normal course of business of broking activities, against which corresponding payments had been made to other parties; b) The nominal brokerage/ commission income had been earned @ 2% on disputed deposits of Rs. 2,75,382/- (@2% of Rs. 1,37,69,087); 3.0 The Ld. CIT(A) ought to have sustained the addition to the extent of peak of credits on following the telescoping method, since there exists corresponding payment against the disputed cheques/RTGS deposits made in the bank accounts. The appellant craves leave to add, amend, alter and/or withdraw any of the grounds of appeal at the time of hearing. 2. All the grounds raised by the assessee are interconnected and interrelated and relate to challenging the order of CIT(A) in sustaining the additions under section 69A of the Income Tax Act, therefore, we have decided to take up all the grounds together and adjudicate of the same through the present consol....
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....edited in bank account and made the addition u/s.69A of entire cash and other credits appearing in the bank account of Rs. 1,92,69,087/-. Findings of Ld. CIT(A) In 1st appeal, the CIT(A) observed that the addition of Rs. 55,00,000/- had already been made in hands of Mr. Atul Bora (employer of the assessee) and deleted the addition subject to verification to avoid double taxation. The CIT(A) confirmed the balance addition of Rs. 1,37,69,087/- under the reason that the assessee had not furnished the source of such credit entries. Further, the CIT(A) relying on judicial decision of Jabalpur, ITAT in the case of ACIT v. Sandesh Kumar Jain (ITA No.41/JAB/2020) directed the AO to calculate the tax @ 30%, (as against computed by AO @ 60%) under the reason that amended provision to Sec. 115BBE applies to transactions entered after 15/12/2016. Contention of the assessee: The assessee was a conduit of his employer Mr. Atul Bora, who had opened, controlled and managed the entire activities of his proprietary concern M/s. Vasant Engineering and all transactions in bank account had been undertaken by his employer. Accordingly, relying on such informa....
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....of the Act. As regards applicability of Sec. 115BBE, the assessee relies on the judicial decisions of SMILE Micro Finance Ltd v. ACIT (2078 & 1742 of 2020- Madras High Court), Naranbhai Smatbhai Bharwad v. ITO (ITA no- 272/Ahd/2024) and Shri Sandeep Sethi v. DCIT (ITA no. 155/JP/2022) and ACIT v. Sandesh Kumar Jain (ITA no- 41/Jab/2020) and DCIT v. Punjab Retail Pvt Ltd (ITA no677/Ind/2019), wherein Hon'ble ITATs had decided that Sec 115BBE shall apply w.e.f 15/12/2016. 6. On the other hand, Ld. DR relied upon the orders passed by the AO and submitted that since the assessee could not explain the source of funds credited in bank account and therefore, AO had rightly made addition under section 69A of the Act on entire cash and other credits appearing in the bank account of Rs. 1,37,69,087/-. 7. We have heard the counsels for both the parties and perused the material placed on record, judgements cited before us and the orders passed by the revenue authorities. 8. From the records, we noticed that during the year under consideration, the assessee did not file his return of income as according to the assessee his income was below the basic exemption limit. Howeve....
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....facts were admitted and relied upon by the AO because the assessment of the said Mr Atul Bora was also reopened u/s 148 of the Income Tax Act and reassessment orders for the year under consideration had been passed on 30th May 2023 in the case of said Mr. Atul Bora. It is pertinent to mention here that in the assessment order of Mr Atul Bora the AO had categorically held that the said Mr. Atul Bora had opened and controlled the proprietary concern of the assessee M/s. Vasant Engineering, and he had operated the bank account of such concern. It was further held by the AO that the assessee in the present appeal is a mere name, lender and proxy of Mr Atul Bora and all the transactions in assessee's bank account had been 'controlled and managed' by Mr Atul Bora, therefore, after analyzing the transactions and after evaluating the evidences and appreciating the fact that assessee was merely an employee of Mr Atul Bora and all the activities of the proprietary concern, M/s. Vasant Engineering were controlled and managed by the said Mr. Atul Bora. Therefore, AO made additions in the hands of Mr Atul Bora of Rs. 1,24,00,225/- which included the funds transferred by the assessee to Mr Atul ....
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....ar as the credits in the bank account of Rs. 1,37,69,087/- are concerned, in this regard, assessee has taken a categorical stand that he has engaged himself in the business of brokerage/commission, activities of engineering and electronic goods under the assistance and guidance of his employer Mr. Atul Bora and he had received the business advances from various customers which were deposited in his personal bank account and thereafter, the assessee had made the similar payments to other parties and suppliers of engineering and electronic goods. It was specifically stated that the supply of goods was directly made by the suppliers to the customers and the assessee in normal course of brokerage/commission activities had earned at the most the brokerage/commission income @ 2% of entire credits. The bank statement of the assessee disclosed the name of all parties from whom business advances had been received from the traders/customers and thereafter, paid to other traders/suppliers. The said bank statements, further disclosed the refund of business advances received from the original customers, in case of non-completed transactions in this way the assessee has successfully proved that ....
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....ent case net profit rate of five per cent has been applied. It is not appropriate that the same requires to be enhanced. It is high. In any case, it cannot be said that there has been perversity of approach." c) Man Mohan Sadani vs. CIT 304 ITR 52 (MP- High court) "Entire sale proceeds of the assessee cannot be added to his income for assessing income from undisclosed sales; net profit rate has to be applied." d) Kachwala Gems vs. JCIT 288 ITR 10 (SC) "It is well settled that in a best judgment assessment there is always a certain degree of guesswork. No doubt the authorities concerned should try to make an honest and fair estimate of the income even in a best judgment assessment, and should not act totally arbitrarily.", A 16. Therefore, considering the entire facts and circumstances of the present case and while taking into consideration the settled principles of law, we are of the view that in respect of credits of Rs. 1,37,69,087/-, the entire amount could not be added as income of the assessee as the said deposits had been made in normal course of brokerage/commission activities. Therefore, the brokerage / commission income be estimated @....