TaxTMI 
TaxTMI 
2026 (6) TMI 84
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....e commission agent dealing in onion, potato and vegetables as a proprietor in the name of M/s.S.R.Traders at Koyambedu. The assessee filed his return of income on 11.02.2021 declaring total income of Rs. 71,93,010/- for the AY 2020-21. The case was selected for verification under e-verification scheme 2021, wherein the High Risk Cases related to AY 2020-21 were verified. The AO found that the assessee had made cash deposits in two bank current accounts of Rs. 3,08,00,000/- in IndusInd Bank Limited and Rs. 7,94,46,500/- in Axis Bank account aggregating to Rs. 11,02,46,500/-. On the basis of the above information, the AO issued a notice u/s.148 of the Act stating that the income chargeable to tax had escaped the assessment for the AY 2020-21. In response, the assessee filed the return of income on 15.05.2024 declaring the same total income of Rs. 71,93,010/-. Later, the AO issued statutory notices calling for various details and documents including the cash book. The assessee filed a detailed response by submitting cash book, ledger, bank account statements, Form 26AS, profit and loss account, balance sheet, samples bills of purchases and sales, copy of purchase agreement and computa....
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....the principal suppliers. Therefore, the turnover declared in the profit and loss account is always lesser than the total transactions / credits made in the bank account of the assessee. Further the assessee also submitted the purchase and sales invoices along with the lorry receipts and statement sheets of the principal supplier on sample basis explaining complete transactions carried out by the assessee in support of the bank credits. However, the ld.CIT(A) on perusal of the records and submissions made by the assessee was not convinced and confirmed the order of the AO by passing an order dated 19.02.2026. 6. Aggrieved by the order of the ld.CIT(A), the assessee is in appeal before us by raising the following grounds of appeal: "1. The order of the NFAC, Delhi dated 19.02.2026 vide DIN & Order No. ITBA/APL/S/250/2025-26/1086239183(1) for the above mentioned Assessment Year is contrary to law, fact and in circumstances of the case. 2. The NFAC, Delhi erred in impliedly confirming the assumption of jurisdiction under Section 147 of the Act and consequently erred in impliedly confirming the passing of the re-assessment order under Section 147 of the Act without ....
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....umstances of the case and ought to have appreciated that the pre-requisite conditions required for making an addition in terms of Section 69A of the Act were absent in the present case, there by negating the findings in relation there to. 15. The NFAC, Delhi failed to appreciate that having shown the disputed sum as part of the turnover, assessment of the turnover once again as unexplained money was wrong, erroneous, incorrect, invalid, unjustified and not sustainable both on facts and in law. 16. The NFAC, Delhi failed to appreciate that the entire re-computation of taxable total income was wrong, erroneous, incorrect, invalid, unjustified and not sustainable both on facts and in law. 17. The NFAC, Delhi failed to appreciate that having not adhered to the prescription of faceless regime, the consequential re-assessment order as well as the appellate order passed should be reckoned as bad in law. 18. The NFAC, Delhi failed to appreciate that there was no proper opportunity given before passing of the impugned order and any order passed in violation of the principles natural justice would be nullity in law. 19. The Appellant craves leave ....
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....balance amount deposited to bank, which has been later transferred to the principal supplier through banking channel. In view of the above explanation, the ld.AR prayed for deleting the additions made by the AO which has been confirmed by the ld.CIT(A). 10. Per contra, the ld.DR supported the orders of the lower authorities and prayed for confirming the order of the ld.CIT(A). 11. We have heard the rival contentions, perused the material available on record and gone through the orders of authorities below along with paper book filed by the assessee. The issue arising for consideration before us is whether the authorities below were justified in treating the differential amount between the aggregate credits/cash deposits reflected in the bank accounts of the assessee and the turnover disclosed in the profit and loss account as unexplained money u/s.69A of the Act. 12. From the facts available on record, it is evident that the assessee is engaged in the business of wholesale trading in onion, potato and vegetables and also acts as a del-credere commission agent in Koyambedu wholesale market. The assessee has consistently stated before the AO as well as before the ld.CIT(A) t....
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....gainst consignment sales and the net proceeds after deduction of freight, loading charges, cooli, packing expenses and commission were remitted to such principals through banking channels. The authorities below have failed to examine these evidence in proper perspective. 16. We also find force in the contention of the ld.AR that the nature of business carried on in Koyambedu wholesale vegetable market involves substantial cash circulation, especially in consignment transactions relating to perishable commodities like onion and potato. In such line of business, the bank deposits may not necessarily correspond with the turnover disclosed in the books because the sale proceeds belonging to third-party principals would also flow through the bank account of the commission agent. Therefore, without disproving the business model and transaction trail explained by the assessee, the addition made u/s.69A merely on the basis of differential bank credits is unsustainable. 17. The provisions of section 69A of the Act can be invoked only where the assessee is found to be owner of money, bullion, jewellery or other valuable articles not recorded in the books of account and the assessee eit....