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Facts
The assessee, an auto-rickshaw driver, was lured by an individual to conduct business in his name through M/s. Aqua Trading Company. Large transactions occurred, which the AO added to the assessee's income. The assessee claimed the business was run by someone else and he was only paid a nominal monthly commission.
Held
The Tribunal held that the AO erred in making additions to the assessee's income without verifying the actual business operators. The AO failed to trace the real culprits behind the transactions.
Key Issues
Whether the AO was justified in adding large business transactions to the income of an auto-rickshaw driver who claimed to have no involvement in the actual business operations.
Sections Cited
131, 147, 148, 143(3)
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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: SHRI NARENDRA KUMAR BILLAIYA, HON’BLE & SHRI SANDEEP SINGH KARHAIL, HON’BLE
Assessee by : Shri Surendra Kumar Rajmani Mishra, A/R Revenue by : Shri Vivek Perampurna, CIT, D/R सुनवाई की तारीख/Date of Hearing : 16/04/2025 घोषणा की तारीख /Date of Pronouncement: 21/04/2025 आदेश/O R D E R
PER NARENDRA KUMAR BILLAIYA, AM:
This appeal by the assessee is preferred against the order dated 07/11/2023 by NFAC, Delhi, pertaining to AY 2012-13.
The sum and substance of the grievance of the assessee is that the ld. CIT(A) erred in confirming the addition of Rs. 10,33,38,610/- as commission income. 3. Briefly stated the facts of the case are that on the basis of the information, the AO came to know that M/s. S5 Trading Pvt. Ltd., Crystal Corporation and M/s. Aqua Trading Company, were having CD accounts with Dhanlaxmi Bank Ltd., Fort Branch, Mumbai. The accounts were opened during June, 2010 and closed on 14/07/2011. The AO found that large volume of funds was transacted inter-se among these three accounts. The AO found that RTGS transfer of Rs. 2 Crores each is seen credited in these accounts from M/s. Ravi Kumar Distilleries Ltd..
2 4. The bank account in the name of M/s. Aqua Trading Company had huge credit transactions amounting to Rs.1,03,33,86,100/- in the bank account held with Dhanlaxmi Bank Ltd., Fort Mumbai. 4.1. Assessee was asked to explain the details in the aforementioned bank account. In his reply, the assessee stated that the said bank account was not operated by him but by Shri Raju Bhimrajka and he was given only Rs.2,000/- per month i.e., Rs.24,000/- per annum as commission and the same has been offered for taxation by him in his return of income. 4.1.1. The assessee was summoned u/s 131 of the Act and his statement was recorded by the AO and in his statement, the assessee categorically stated that M/s. Aqua Trading Company was carried on by Shri Raju Bhimrajka in his name. On receiving no supportive evidence, the AO treated the transactions of Rs. 1,03,33,86,100/- and made addition of the same to the returned income of the assessee.
The assessee carried the matter before the ld. CIT(A) but without any success.
We have given a thoughtful consideration to the orders of the authorities below.
The peculiar facts and circumstances of the case are that the assessee is an auto-rickshaw driver, who was lured by Shri Raju Bhimrajka to carry on the business in the name of M/s. Aqua Trading Company. The assessee was offered Rs.2,000/- per month for his name. It is beyond one’s imagination as to how an auto-rickshaw driver can do transactions of Rs.103,33,86,100/-. 7.1. The AO was in possession of the complete information of all the three companies mentioned elsewhere. The AO was also in possession