2026 (5) TMI 1553

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....g from the assessment order dated 25.12.2019 passed u/s 143(3) of the Act pertaining to Assessment Year 2017-18. 2. Brief facts of the case are that the assessee is an individual and engaged in the business of money transfer agency under the license granted by payments service providers companies like Ezspend Prepaid Payments Solutions Pvt. Ltd., Oxigen Service India Pvt. Ltd., Ebix Payments services Pvt. Ltd. etc. The return of income was filed on 02.02.2018, declaring total income of INR 3,19,351/-. The case was selected for scrutiny through CASS for the year under appeal to verify the source of cash deposited during the demonetization period in Specified bank notes ("SBN"). The AO observed that during the year under appeal, the assess....

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.... has been confirmed without considering the fact that the assessee has already shown the commission received on this deposit in his ITR for the relevant assessment year. 4. (i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the commission income of Rs. 7,07,790/- at estimated 2% of Rs. 3.53 crore, thereby making an addition of Rs. 3,88,439/- (Rs. 7,07,790/-less 3,19,351/- income declared by assessee in ITR), ignoring the nature of low-margin agency business and form 26AS. (ii) That the commission has been charged @ 2%, without there being any basis for the same. 5. The appellant craves leave to add, amend OR alter any of the grounds of appeal." 5.....

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.... was acted as a broker for the principals i.e. money transfer agency, no addition is could be made in the hands of the assessee for the money belonged to those principals and more particularly when these funds were ultimately transferred to their accounts. In view of these facts, AO has wrongly treated the cash deposited during the demonetization period in SBN as unexplained money of the assessee and therefore the addition of INR 15,40,000/- made u/s 69A of the Act is hereby deleted. Accordingly, Ground of appeal Nos.2 & 3 raised by the assessee are allowed. 9. Ground of appeal No.4 raised by the assessee is with respect to the confirmation of addition of INR 3,88,439/- by estimating the income of the assessee by applying the profit of 2....