TaxTMI 
TaxTMI 
2026 (6) TMI 1177
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....r (for short, "AO") under section 147 r.w.s 144B of the Income Tax Act, 1961 (for short, "the Act"), dated 25/03/2022. The Revenue has assailed the impugned order of the CIT(A) on the following grounds of appeal: "(a) Whether the Ld. CIT(A) is correct in not appreciating the fact that the assessee has not furnished any proof of travel business agency before the FAO and corroborative evidence to substantiate that the cash deposits were made out of travel agency business. (b) Whether the Ld. CIT(A) is correct in accepting the evidence furnished before him without remanding the issue to the Assessing Officer for verification wherein it is seen that no such evidence was furnished before the FAO, which is bad in law. (....
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....visions of section 44AB of the Act despite admitting turnover of Rs3,67,34,434/ before the Ld. CIT(A) during the appellate proceedings. (g) Any other ground that may be urged at the time of hearing." 2. Succinctly stated, the AO based on information that the assessee had during the subject year carried out substantial financial transactions, viz., (i) cash deposits in current bank account: Rs. 1,95,10,500/-; (ii) cash withdrawals from current bank account: Rs. 3,88,378/-; and (iii) received commission or brokerage income: Rs. 1,43,911/-, initiated proceedings under section 147 of the Act. Notice under section 148 of the Act, dated 31/03/2021, was issued and duly served upon the assessee. In response, the assessee filed his retur....
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....e "receipts and payments account" filed before him, admitted a turnover of Rs. 3,67,34,434/-. However, he observed that the assessee had neither had his accounts audited as required under section 44AB of the Act nor deducted tax at source (TDS) from payments made to various travel agencies and tour operators, as he was obligated to do. Although the CIT(A) observed that, considering the aforesaid deficiencies, the meagre income returned by the assessee in response to notice under section 148 of the Act did not merit acceptance, but at the same time he held a conviction that as per the bank statement filed before him it could safely be concluded that the cash deposits made in the said bank account were sourced from his business receipts. 6....
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....mitted that as the assessee had failed to place on record any material which would irrefutably evidence that the cash deposits in his bank account amounting to Rs. 1,91,22,123/- formed part of his business receipts, therefore, the CIT(A) had most arbitrarily vacated the said addition and substituted the same by the income of the assessee estimated @ 8% of his disclosed turnover of Rs. 3,67,34,434/-. The Ld. Sr-DR reiterated that as there is no material available on record which would evidence that the cash deposits of Rs. 1,91,22,123/- made in the assessee's bank account were sourced out of his receipts from the business of travel agency, the CIT(A), without any justification had scrapped the addition made by the AO and most arbitrarily sub....
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....he deficiencies pertaining to the "receipts and payments account" filed by the assessee, viz., (i) that the assessee had not got his accounts audited under section 44AB of the Act; and (ii) that the assessee had not deducted tax at source on the payments made to travel agents and tour operators, as required under law, had clearly observed that it was difficult to accept the meagre income disclosed by the assessee in his return of income filed in his response filed under section 148 of the Act. However, we find that the CIT(A) despite observing as herein above, had without any basis vacated the addition of the unexplained cash deposits made during the subject year in the assessee's current account by holding a conviction that if the income o....
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....id amount was transferred by the assessee to the principal travel agent and tour operators in the normal course of his business, which we find had not been done by the said First Appellate Authority. 17. We thus, in terms of our aforesaid deliberations are unable to persuade ourselves to subscribe to the view taken by the CIT(A), who had without any cogent basis vacated the addition of Rs. 1,91,22,122/- made by the AO under Section 68 of the Act, on the presumption that as the said amount formed part of the turnover of Rs. 3,67,34,434/- disclosed by the assessee, on which the income element was estimated @ 8%, thus no separate addition was called for in his hands. In our view, the matter, in all fairness, needs to be set aside to the fil....