TaxTMI 
TaxTMI 
2025 (4) TMI 2172
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....pted by appellant during the relevant period. 3. Without prejudice to her right, the appellant submits that the assessing officer had erred in quantifying the demonetized currencies in the appellant's account as Rs. 11,13,750 as against the actual amount of Rs. 1,61,000. 4. The Assessing Officer failed to appreciate that the bank account was joint account of appellant with her husband, Mr.M.SENTHILKUMAR and cannot constitute as appellant's books. 5. The CIT(A) had erred in upholding the action of Assessing Officer who had erroneously considered appellant's husband transactions in her hands and failed to appreciate that such deposits in the said bank account were transferred to appellant's husband's principal viz, Interactive Financial & Trading Services Private Limited, distributor of Itz Cash Card Limited /shortly by trade name "Itzcash"], (Presently called Ebix Payment Services Private Limited) who had already acknowledged the same by producing the ledger in their books. 6. The Assessing Officer had failed to appreciate that the same income cannot be taxed twice. 7. The CIT(A) had erred in noting that the commission....
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....money transfer. The assessee is an authorised agent of EBIX Payment services private limited (Itz Cash). The assessee had not filed her return of income as per the dates prescribed under the Act for the A.Y. 2017-18. Even after issuing notice u/s.142(1) of the Act, the assessee did not file her return before the valid date i.e. 31.03.2018. However, the assessee filed her return of income on 14.08.2019, by declaring an income of Rs. 2,39,410/-, which was an invalid return and taken up the case for scrutiny assessment. Meanwhile the AO had collected the details of transactions carried out by the assessee from the banks and found that the assessee had total credits during the year to the tune of Rs. 5,56,79,819/- at SBI, ICICI (2 accounts) and UBI, which includes Rs. 11,13,750/- of cash deposits during the demonetisation period. During the assessment proceedings, the assessee had stated that the she has received cash including the SBNs from the customers/clients during the demonetisation period and utilised the same for making deposits to her bank account. The AO was not convinced with the explanation as the assessee was not eligible to received the SBN and hence made the addition of ....
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.... 9.1 Going through the above financial statement, it is ascertained that, during the financial year 2016-17, the assessee is doing online money transfer for commission basis. In the computation statement enclosed as said above, the assessee has admitted commission of Rs. 2,39,410/- under the head other sources. However total bank credits accumulated to Rs. 5,45,66,069/- (excluding cash deposits of Rs. 11,13,750/- made during demonetization period). Hence actual commission income is to be estimated on total bank credits which worked out to Rs. 43,65,286/- at the higher side ratio of 8%. As discussed above, the taxable income from the above is computed at 8% of the same, amounting to Rs. 43,65,286/-. Accordingly, the income from other sources is computed at Rs. 43,65,286/-. Addition: Rs. 43,65,286/- 3.1 Aggrieved by the assessment order of the AO, the assessee preferred an appeal before the Ld.CIT(A). 3.2 Before the Ld.CIT(A), the assessee filed a written submission in support of her grounds of appeal and stated that the she has carried out the business of fund transfer/ domestic money transfer/other online services like flight booking, loan payment, credit c....
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....arby Technologies Private Limited, Ticket booking agent for Hermes, retail money transfer for Ebix payment services private limited, and was having a joint current account in SBI with her husband Mr.Senthil Kumar as second name. The said account was put to joint use by Husband and Wife. The assessee has filed the return with service charges and commission offered as income (Page 13-17 of Paper book). The assessee also had current account in ICICI Bank and savings bank accounts also in ICICI and Union Bank of India. The ld.AR stated that the assessee's husband, Mr.Senthil Kumar was doing money transfer business authorized BCA of IDBI Bank through Itz Cash Card Private limited (Shortly Called ITZ Cash) Now called EbixCash) and used to transfer money to his wallet through ITZ Cash distributor - Interactive Financial and Trading Services Private Limited. 4.1 Further, the ld.AR stated that the assessee's business was principally facilitating electronic payments during the year with very less volume in Ticket booking and as BCA with no business done in her name as Ebix retail agent in money transfer, the commission out of which was Rs. 427 and Rs. 67 respectively as reflected in 26AS ....
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....e. 4.4 The crux of the issue in assessment made, is acceptance of demonetized currency, consideration of husband transactions in assessee's hand and estimation of unrealistic commission out of it. 4.5 Ground 1 & 2 - Assumption that assessee is not permitted to accept demonetized currencies: During the demonetization period the appellant had collected cash from her customers and deposited the same in her bank account for transferring to the respective beneficiaries. The AO had made additions of the same on the ground that assessee cannot accept demonetized currency and therefore it is unexplained money u/s 69A [Para 8 of the assessment Order]. It is pertinent to note that said cash deposits doesn't belong to assessee as she was operating as an agent to assist her customers facilitating electronic payments by collecting cash and depositing the same in Bank. It is not the case of AO that source for said monies was unexplained rather it was acceptance of Specified Business Notes (SBN) that had triggered addition. It is not the case that AO had doubts on source of deposits as he himself appreciated assessee's business, relied on the quantum of deposits to estimate income subse....
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....rayan [Page 44-52] [TS-238-ITAT- 2022(VIZ)] wherein it was held that "The Specified Bank Notes (Cessation of Liabilities) Act, 2017, defines "appointed day' vide Section 2(1)(a). As per Section 2(1)(a), "appointed day" means the 31st Day of December 2016. Section 5 of the Specified Bank Notes (Cessation of Liabilities) Act, 2017 also deals with prohibition on holding, transferring or receiving specified bank notes. Section 5 states that "On and from the appointed day, no person shall knowingly or voluntarily, hold, transfer or receive any specified bank note". We therefore, find that the specified bank notes can be measured in monetary terms since the guarantee of the Central Government and the liability of Reserve Bank of India do es not cease to exist till 31.12.2016. In view of the above, the contention of the Ld.DR, treating the receipt of SBNs from cash sales as illegal and thereby invoking the provisions of section 69A is not valid in law. Therefore, we dismiss this ground of the Revenue." (iii) Bangalore ITAT in the case of Bhageeratha Pattina Sahakara Sangha Niyamitha[ Page 53-621[TS-217-ITAT-2022 (Bang)] where in it was held that "deposits after pr....
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....The Ld.AR submitted that the AO failed to appreciate that the bank account was joint account of assessee [Please refer 1 page of SBI Bank statement submitted separately] with her husband, Mr.SenthilKumar and erred in alleging that all transactions in the said bank account constitute only that of assessee's. As stated in facts of the case and Ground 5 in Form 36, assessee's husband Mr.Senthil Kumar was BCA for IDBI and used to transfer to his wallet through ITZ Cash distributor - Interactive Financial and Trading Services Private Limited and was holding and operating account under reference with SBI jointly with appellant. The establishment of the said fact was accepted by AO vide para 2, page 4 of the assessment order. Attention of Lordship is drawn to 3rd Para in page 4 of the assessment order wherein AO had referred to the statement made by the appellant that said bank transactions (Transactions relating to money transfers) shown only in her husband's return of income for the assessment year 2017-18 but misunderstood the same as said Bank account reflected in husband's return and stretched himself hard to prove that it was only assessee's bank account which was never disp....
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....s bank accounts including that of appellant and Commission thereon paid to him)[ Page 89], the Ld.CIT(A) had erred in dismissing the grounds of the assessee for want of such workings and details which in no way connected to the assessee's case. 4.15. Ground 8-Unrealistic estimation of commission at 8% as against trade practice of 1-2% The Ld.AR further submitted that the AO had grossly erred and contradicted in stating that "actual commission income is to be estimated on total bank credits which worked out to Rs. 43,65,286/- at the higher side ratio of 8%" Para 9.1, Page 7 of assessment order. The assessee's working of commission on deposits (after exclusion of husband's transaction) is as below. Extract from Bank statements of appellant Rs. P. Rs. P. Particulars Sum of Receipts Commission Total credits in SBI 5,48,14,593 2.21% Less: Opening Balance (4,24,955) Net Credits during the year 5,43,89,638 (Considered less by AO in his Order as Rs. 5,14,42,547/-) Less: Credits relating to Husband business, transferred to his Principal ITZ c....
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....ion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year." The Ld.AR stated that the cash deposits were accepted to have been from customers of assessee by the AO and also found credited in her bank account. Given that fact, AO had erred in invoking Section 69A r.w.s 115BBE of the Act. 4.20 Ground 14 : Without prejudice to her right, the Ld.AR submitted that the AO has erred by not giving credit to TDS and computing interest on tax determined. 5. Per contra, the Ld.DR supported the orders of the lower authorities. 6. We have heard both the parties, perused materials available on record, all the paper books and gone through orders of the authorities below along with the judicial decisions relied on. It is undisputed fact that the assessee is an authorised agent of EBIX Payment services private limited (Itz Cash), carrying on business of facilitating electronic payments like online payments of school fees, electricity bill, credit card bills for i....
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....tion period the assessee had collected cash from her customers and deposited the same in her bank account for transferring to the respective beneficiaries. The AO had made additions of the same on the ground that assessee cannot accept demonetized currency and hence considered it as unexplained money u/s.69A of the Act. It is not the case of AO that source for said monies was unexplained rather it was acceptance of Specified Business Notes (SBN) that had triggered addition. We note that the assessee had deposited only Rs. 1,61,000/- out of the collection from customers and hence the source for the same has been explained by the assessee. Therefore, the addition of Rs. 11,13,750/- u/s.69A of the Act, is not sustainable. We are in agreement with the Ld.AR's reliance in the case of Mrs. Umamaheshwari in ITA No.527/Chny/2022 of this Tribunal, wherein the receipt of SBN upto 30.12.2016 was not prohibited once the source has been explained. The relevant extract of the decision is given below: "As regards, the first objection of the AO on legal tender of Specified Bank Notes on or after 08.11.2016, I find that as per the Specified Bank Notes (Cessation of Liabilities) Ordinance, ....