GAURAV AHUJA,YAMUNANAGAR vs. INCOME TAX OFFICER, YAMUNA NAGAR, HARYANA

That the order of Ld. CIT(A) is against the law and facts of the case.

That on the facts & circumstances on the case the Ld. CIT(A) is not justified while upholding the order of the Assessing Officer and confirming the addition of Rs. 1,67,40,633/- without proper appreciation of impeccable documents, evidences on record and facts of the case.

That the Ld. CIT(A) has erred on law & facts of the case while upholding an addition of Rs. 1,67,40,633/- as profit @ 8 percent of the total cash deposited as turnover of the assessee, without properly considering the evidences, documents and facts of the case that assessee's income is only commission income, for handing cash deposited by the clients on behalf of his principals and assessee is only working as conduit and all the cash deposited are transferred to his principals immediately.

That the ld. CIT(A) has erred while holding "8% tax charge upon the cash deposits made during the year since the same are in concurrence with the Net Profit evident from above NP/Turnover ratio" without appreciating the fact that 8% profit is for Trading of Mobile Phones only and the addition on account of cash deposits is wholly unjustified as made on surmises and conjectures.

That the Learned CIT(Appeals) is not justified in upholding the Order of Assessing Officer without even considering the fact, that there is no turnover of the assessee of its own, as he has acted as an agent on behalf of his principals.

That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard and disposed off.

Brief facts of the case are that the assessee is engaged in the business of money transfer, mobile recharge and trading of mobile phones. The case was selected for limited scrutiny on account of cash deposits. The Assessing Officer completed the assessment under section 143(3) and made an addition of Rs.1,67,40,633/- by applying a profit rate of 8% on the total cash deposits amounting to Rs.20,92,57,910/-, treating the same as turnover.

Against the order of the AO the assessee carried the matter in appeal before the Ld. CIT(A), who confirmed the action of the Assessing Officer.

Aggrieved, the assessee is now in appeal before the Tribunal.

During the course of hearing the Ld. AR submitted that the assessee is merely acting as a facilitator in money transfer business and only commission income is earned, which has already been duly offered to tax. It was further contended that the Assessing Officer has failed to appreciate the nature of the business and has wrongly treated the entire cash deposits as turnover without proper verification of corresponding debit entries and fund transfers. It was also argued that a proper opportunity was not afforded, and the assessment was completed in a hurried manner.

The Ld. DR, on the other hand, supported the orders of the lower authorities and submitted that the assessee failed to substantiate the claim with cogent evidence and discrepancies in bank transactions were rightly considered.

We have heard the rival submissions and perused the material available on record. It is observed that the primary dispute revolves around

1 However, from the records and findings of the lower authorities, it emerges that there are contradictions regarding the flow of funds, the absence of complete agreements, and a lack of clarity on the exact nature of transactions. At the same time, it is also evident that the Assessing Officer has not carried out a comprehensive verification of the entire trail of deposits and corresponding withdrawals/transfers, nor has the issue been examined in the light of the business model claimed by the assessee.

2 In our considered view, the issue requires a thorough factual verification at the level of the Assessing Officer. The principles of natural justice demand that the assessee be granted an adequate opportunity to substantiate its claim with complete documentary evidence, including agreements, bank reconciliations, ledger accounts, and confirmation from concerned parties.

3 At the same time, we cannot ignore the fact that the assessee has not properly discharged the onus during the earlier proceedings, which has led to prolonged litigation and avoidable consumption of judicial time. Therefore, in order to balance equities, we deem it appropriate to impose a cost.

4 Accordingly, we set aside the impugned order and restore the matter to the file of the Assessing Officer for fresh adjudication in accordance with law. The Assessing Officer shall afford the assessee a reasonable and effective opportunity of being heard and shall duly consider all evidences that may be placed on record. It is clarified that the assessee shall be at liberty to adduce such documentary and other evidences as it may deem appropriate to substantiate its claim that it functioned merely as a pass-

5 Thousand only) with the POOR PATIENT RELIEF FUND, PGI, Chandigarh and produce the receipt of such payment before the