TaxTMI 
TaxTMI 
2026 (7) TMI 807
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....assed under section 250 of the Income Tax Act, 1961 (hereinafter called 'the Act'). The relevant Assessment Year is 2017-18. 2. We shall first adjudicate the appeal filed by the Department (ITA No.2931/CHNY/2025). The grounds raised by the Revenue reads as follows:- (1) The order of the Ld. CIT(A) is opposed to law on the facts and in the circumstances of the case. (2) The Ld. CIT(A) was correct in deleting the addition of Rs. 3,44,35,116/- made u/s 69A of the Income-tax Act, 1961 without appreciating the fact that the assessee has failed to produce concrete evidence such as written agreements with foreign exchange entities to establish that he acted as an authorized sub-agent of the said foreign exchange entities. ....
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....s, the AO noticed that there were total cash withdrawals of Rs. 3,44,35,116/- and cash deposits of Rs. 5,00,000/- in the above mentioned bank account of assessee. The AO directed the assessee to explain the transactions in the bank account. In response, the assessee submitted that he was engaged as a commission agent/sub-agent for foreign exchange entities, namely Tanscorp International Ltd. and Muthoot Forex Ltd., and that the funds received in his bank account were meant solely for disbursement to customers after verification of KYC documents. It was explained that the assessee merely acted as an intermediary, maintained books of account including day book and ledger, and that the cash withdrawals represented cash disbursed to customers a....
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.... receipts against the transaction amounting to Rs. 3,44,35,116/- is being treated as unexplained money of the assessee for the year under consideration and accordingly the said unexplained money of Rs. 3,44,35,116/- is added back to the taxable income for the year under consideration in view of provisions of section 69A r.w.s. 115BBE of the I.T. Act, 1961." 4. Aggrieved, assessee filed appeal before the First Appellate Authority (FAA). Before FAA, the assessee furnished copies of the relevant bank statements, day book and ledger accounts. After extracting the relevant extracts and upon examining the material on record, the FAA found that the assessee was engaged as an authorised sub-agent of Transcorp International Ltd. and Muthoot Finco....
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....mission income for rendering such services. In light of the above facts, and considering the evidences placed on record which substantiate the appellant's role as an intermediary rather than the beneficial owner of the deposits, the addition of Rs. 3,44,35,116/- made by the Assessing Officer by invoking the provisions of section 69A of the Act cannot be sustained. The Assessing Officer is accordingly directed to delete the said addition from the hands of the appellant. Accordingly, the Ground No. 3, 4 & 6 raised in the appeal is allowed." 5. Aggrieved by the order of the FAA, the Department has filed the present appeal before the Tribunal. The Ld.DR relied on the grounds raised and the findings of the AO. 6. The Ld.AR reiterated the s....
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....corresponding disbursement to beneficiaries. The Form 26AS also reflects commission income received by the assessee from the aforesaid entities, on which tax was deducted at source u/s. 194H of the Act, thereby corroborating the assessee's claim that he was merely an intermediary and that his income was confined to commission earned from such agency operations. The Revenue has not brought any material on record to controvert the factual findings recorded by the FAA or to establish that the assessee was the beneficial owner of the funds withdrawn from the bank account. In the absence of any such evidence, and having regard to the nature of the transactions supported by the books of account, bank statements and Form 26AS, we find no infir....