TaxTMI 
TaxTMI 
2026 (6) TMI 1266
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....or AY 2020-21 declaring income at Rs. 21,63,610/-. Subsequently, on the basis of information available on Insight Portal indicating high risk transactions, it was found that the appellant deposited Rs. 5,66,17,450/- in cash in the HDFC Bank account during the FY 2019-20. The declared gross receipts were Rs. 2,60,15,311/- and other income of Rs. 10,94,546/- aggregating to Rs. 2,71,09,857/-, leaving Rs. 2,95,07,593/- as unexplained. The case of the assessee of the assessee was reopened under Section 147 of the Act upon issuance of notice under Section 148 dated 29.03.2024. However, no return of income in response to the said notice was filed. The Ld. AO proceeded thereafter upon issuing notice under Section 142(1) of the Act and notice under Section 133(6) was also issued to various banks and travel agencies responses whereof confirmed large cash transactions. 3. It is the case of the appellant that the deposits were from clients for travel booking including reimbursements and advancement and, therefore, the GST returns, financial statements and bank records were furnished. Surprisingly, discrepancies were too found between the GSTR -1 invoice value of Rs. 1,78,78,652.44 and decla....
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....he bank account during the year under consideration the amount of Rs. 2,95,07,593/- was treated as unexplained money under Section 69A r.w.s. 115BBE of the Act and added in the hands of the assessee with the following observations:- "3.3 Summary of information/evidence collected which proposed to be used against it(attach documents if required) In order to verify the genuineness of transaction, a notice u/s 133(6) of the Act was issued to the SBI business Process Management Service Private Limited, Interglobe Technology Quotient Private Limited, Standard Chartered Bank, FCM Travel Solution Private Limited, HDFC Bank Limited and RBL Bank Limited. In response thereto, the above mention authority has provided the bank statements/Information's in respect of above said assessee of the concerned year. These information are also available in Form No.26AS of the assessee. 3.4 Variation proposed on the basis of inference drawn (specify the basis of inference and quantify the variation proposed, if possible). On perusal of bank statement it has been noticed that assessee deposited cash in his bank account amounting to Rs. 5,66,17,450/- during the year under conside....
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....f income and the only source of income was already disclosed by him in his return of income. The reply of the assessee is not acceptable because he did not furnish any plausible explanation with substantial evidence regarding the source of deposits/credits made in bank account during the year under consideration. Therefore, the said amount of Rs. 2,95,07,593/- is proposed to be treated as unexplained money u/s 69A of the Act r.w.s. 115BBE of the Act of the assessee and added to the total income of the assessee. Penalty u/s 271AAC of the I.T.Act, 1961 are proposed to be initiated separately. Accordingly, a show cause notice was issued to the assessee on 03.12.2024 proposing an addition of Rs. 2,95,07,593/- under section 69A read with section 115BBE of the Act owing to the fact that assessee failed to furnish plausible explanation with substantial evidence regarding the source of deposits/credits made into the bank. The assessee was required to furnish his reply along with evidence /documents by 09.12.2024. In response thereto, assessee furnished his reply along with necessary documents on the stipulated date. It is stated by the assessee that he has deposited cash of Rs. 5,....
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....f the business. The accounts submitted by the assessee are not reliable and fully explained. Therefore, assessee failed to prove the correctness of the said cash deposit/credits with authentic evidence with self explanatory reply. The reply of the assessee is not acceptable because he did not furnish any plausible explanation with substantial evidence regarding the source of deposits/credits made in bank account during the year under consideration. Therefore, the said amount of Rs. 2,95,07,593/- is treated as unexplained money u/s 69A of the Act r.w.s. 115BBE of the Act of the assessee and added to the total income of the assessee. Penalty u/s 271AAC of the I.T.Act, 1961 are being initiated separately. With the above observations, the variation made is as under :- 5. Table of Addition proposed :- Income declared in return filed in response to the notice U/s 139 of the Act Rs. 21,63,610/- Addition as per para-3.4 above Rs. 2,95,07,593/- Total Income assessed Rs.3,16,71,203/- Assessed under section 147 read with section 144B of the Act. Penalty proceedings U/s 271AAC(1) of the Act are being initiated separately." 5. Before the ....
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....from Rs. 50,000 to Rs. 2 lakh, which raised suspicion due to non-compliance with prescribed Know Your Customer (KYC) norms under section 139A(5)(c) read with Rule 114B. The AO observed that the declared turnover and income did not reconcile with the volume and value of cash deposits, and this gap was unexplained by the appellant. 5.3.2 As a result, the AO treated the difference nearly Rs. 2.95 crore as unexplained cash credits under section 69A. Section 69A enables the AO to add to income any cash credits for which the assessee fails to provide a satisfactory explanation regarding the nature and source. The appellant argued that the cash deposits largely comprised reimbursements received from clients, along with service charges and GST, which are typical in the travel agency business. It was contended that reimbursements are merely pass-through amounts and do not constitute income. The appellant explained that due to the nature of the travel business involving future bookings, cancellations, adjustments, and final settlements only after travel completion exact reimbursement amounts cannot always be determined at the time of filing returns or billing. To substantiate these ....
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.... failed to establish the genuineness and exact nature of these transactions through reliable and verifiable evidence. The lack of clear and consistent accounting, discrepancies in turnover reporting, and failure to reconcile cash deposits with declared income resulted in an untenable position. 5.3.4 The appellant contended that the AO mechanically adopted the allegations and observations contained in the show-cause notice without due consideration of the appellant's detailed replies, thereby violating the principles of natural justice and rendering the assessment order invalid. However, on careful perusal of the assessment order and the material placed on record, it is evident that the AO has duly examined the appellant's submissions, including the purchase ledgers, bank statements, confirmations, and detailed explanations furnished during the course of assessment. The AO has applied his judicial mind and independently evaluated the genuineness of the receipts. The findings recorded in the assessment order are based on identified inconsistencies in the accounts and the appellant's failure to satisfactorily reconcile the cash deposits with the declared income, and not on a ....