TaxTMI 
TaxTMI 
2026 (5) TMI 883
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....ct"). 2. The assessee has raised the following grounds in appeal: 1. That the CIT(A) and AO erred in law and in facts by making an addition of Rs. 22,13,60,055/- under section 69A without appreciating the fact that such money was collected by assessee on behalf of another companies from their customers as collection agent in lieu of commission. 2. That the Ld. CIT(A) and AO erred in law by sustaining the very invocation of section 69A without satisfying the very conditions mentioned therein. 3. The brief facts of the case are that the assessee filed his return of income at Rs. 5,50,560/- and his case was selected for limited scrutiny under CASS on the issue of cash deposits. AO noted that assessee had deposited sum o....
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....bmitted that mere deposit of cash in a bank account cannot lead to an inference of unexplained income. The bank statement itself demonstrates a complete pass through of funds, with no accumulation or personal use. Gross collections handed in an agency capacity cannot be taxed as income. It was further submitted that it is a settled law that only profit embedded should be taxed instead of gross cash deposit/credits and in a recent decision of the Hon'ble Jurisdictional Bench in the case of DCIT vs. MKF Logistics (P) Ltd. (2025) 181 taxmann.com 740, has taken a similar view. It was further submitted that assessee is duly assessed in immediately preceding previous year (AY 2017-18) for the same reason that is "large cash deposit". This assessm....
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....rought and as a result, the addition in dispute which represent gross collections and do not real income, is therefore, unsustainable. It is noted that assessee receives the charges/ commission against the service rendered as well as the cash on behalf of its principal and the cash so received is deposited into the assessee account and they pay it back to the respective companies through banking channels amount of service. The addition represents gross receipts and not real income of the assessee and taxing the entire cash deposit is against the settled principle. The assessee's real income is only the commission earned, which has already been offered to tax and accepted in earlier and subsequent years. It is settled law that where an asses....
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.... case of DCIT vs MKF Logistics (P) Ltd. (2025) 181 Taxmann.com 740, on identical issue, has observed as under:- "After considering the detailed submissions made, it is observed that the assessee is in the business of freight forwarding and handling. It is a peculiar nature of the business in which assessee raises the bill for the services tendered by it to its customers including the freight charges and it collects the freight charges plus for the fees towards services rendered by it. The freight charges have to be paid to the respective airlines or shipping company. The net service charges are the real income of the assessee. This being the peculiar nature of the assessee, assessee will collect gross amount from the customers, ret....