PARESH MAHENDRA SHAH,BHIWANDI vs. INCOME TAX OFFICER , WARD 1(1), KALYAN

Per: Smt. Beena Pillai, J.M.:

The present appeal filed by the assessee arises out of order dated 19/03/2025 passed by NFAC, Delhi for assessment year
2018-19 on following grounds of appeal :
“
The grounds of appeal mentioned hereunder are without prejudice to one another:-

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ITA No. 3832/Mum/2025; A.Y. 2018-19
Paresh Mahendra Shah
1) On the facts and circumstances of the case, the Ld. CIT (A) has erred in upholding the estimation of profit @ 1% on gross receipts of Rs. 11,07,70,960 which works out to Rs. 11,07,709 without appreciating the fact that the profit margin in money transfer is very low considering the expenses like salary and other administrative expenses.
2) On the facts and circumstances of the case, the Ld. CIT (A) has erred in upholding the estimated profit of Rs. 11,07,709 as unexplained cash credit u/s 68 of the Act and make the addition.
3) Without prejudice to the above, the Ld. CIT (A) should have reduced the assessed income of Rs. 11,07,709 by income already disclosed in return of income amounting to Rs. 4,69,380 and restrict the net addition to Rs. 6,38,329 only. Thus, the credit for income of Rs.
4,69,380 disclosed in the return should be allowed.
4) On the facts and circumstances of the case, the Ld. CIT (A) has failed to appreciate the fact that since the bank deposits of Rs.
11,07,70,960 were from business receipt, the computation of tax u/s 115BBE of the Act is not applicable and tax payable as per slab rate.
The appellant craves the leave to add, alter, delete or modify any ground of appeal before or during the hearing of appeal.”
Brief facts of the case are as under:
2. The assessee is an individual and is engaged in the business of digital money transfer on commission basis as authorized agents of M/s Nearby Technologies Pvt. Ltd., Oxy-
Money (Appnit Technologies Pvt. Ltd.). During the year under consideration the assessee filed its return of income on 31/12/2018, declaring total income at Rs.4,53,180/- which was later return of revised on 09/01/2019. The Ld.AO noted that during the financial year relevant to assessment year under consideration there has been cash deposits of Rs.11,07,70,960/- in the current account of assessee for Yes Bank with Bharat Co
Operative Bank and ICICI Bank. Due to substantial cash deposits

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ITA No. 3832/Mum/2025; A.Y. 2018-19
Paresh Mahendra Shah and in order to verify sources, the case was selected for scrutiny under CASS.
2.1 The assessee was issued notice u/s. 142(1) of the Act, calling upon details in respect of the cash deposited and the credit entries in the said bank accounts. The assessee vide letter dated 08/03/2021 submitted that, credit entries in the bank account represents business entries from customer and digitally transferring their money to the parties. The Ld.AO however, observed that assessee did not furnish any details as called for and thus made addition of 1% of the entire deposit in the 3
banks account on estimate basis.
Aggrieved by the order of the Ld.AO assessee preferred appeal before the Ld.CIT(A).
3. Before the Ld.CIT(A) various notices were issued to the assessee. However, there was no response in respect of the same.
The Ld.CIT(A) based on materials available on record confirmed the addition made by the Ld.AO by holding that no documentary evidences were furnished by the assessee.
Aggrieved by the order of the Ld.CIT(A) the assessee is in appeal before this Tribunal.
4. The Ld.AR submitted that, the assessee entered into an agreement with companies for domestic money transfer against which commission was earned at 0.48% amounting to Rs.
4,69,380/-. The Ld.AR submitted that the assessee offered commission income to tax under the head Income from other sources page 2 of the paper book.

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ITA No. 3832/Mum/2025; A.Y. 2018-19
Paresh Mahendra Shah
4.1 He submitted that the commission income offered to tax by the assessee has been doubly taxed said amount has been added twice. The Ld.AR thus prayed for the relief to the extent of commission income declared based on the computation placed at page 2 of the paper book.
4.2 On the contrary, the Ld.DR submitted that no details were furnished by the assessee in respect of commission earned and therefore the disallowance is justified u/s.68 of the Act.
I have perused the submissions advance by both sides in the light of record placed before me.
5. It is noted that the assessing officer invoked section 68 and made addition on estimate based at 1% of the total credits in the books of the assessee. It is noted that the criteria to make addition u/s.68 is different as compared to what has been made by the Ld.AO. It is further noted that, the assessing officer included the commission income already offered by the assessee to tax under the head “income from other sources”. Further addition is made on ad-hoc basis by only considering the credit entries. The Ld.AO failed to appreciate that corresponding debit entries must also be taken into consideration. I therefore did not agree with the manner and in which addition was made.
5.1 The Ld.AO is directed to exclude the commission income earned by the assessee which is already offered to tax under the head “income from other sources” and to consider the debit entries against the amount credited, and to consider the net deposits the end of the financial year. The Ld.AO shall restrict the addition only to the extent of the net figure as addition in the 5
ITA No. 3832/Mum/2025; A.Y. 2018-19
Paresh Mahendra Shah hands of the assessee. With the above direction we remit this issue back to the Ld.AO.
Accordingly the grounds raised by the assessee stands partly allowed for statistical purposes.
In the result the appeal filed by the assessee stands partly allowed for statistical purposes.
Order pronounced in the open court on 28/08/2025 (BEENA PILLAI)

Judicial Member
Mumbai:
Dated: 28/08/2025
Poonam Mirashi,
Stenographer
Copy of the order forwarded to:
(1)The Appellant
(2) The Respondent
(3) The CIT
(4) The CIT (Appeals)
(5) The DR, I.T.A.T.By order

(Asstt.