MOHMMEDAYAZ JANMOHMMED SHAIKH,AHMEDABAD vs. THE ITO, WARD-1(3)(1), AHMEDABAD
Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD
Before: DR. BRR KUMAR & SHRI SIDDHARTHA NAUTIYAL
PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:
This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeal), (in short “Ld. CIT(A)”),
National Faceless Appeal Centre (in short “NFAC”), Delhi vide order dated
28.11.2024 passed for A.Y. 2017-18. 2. The Assessee has taken the following grounds of appeal:-
“1. That the Ld. CIT(A) erred in law and in the facts of the case in upholding the order of the AO in making addition of Rs. 2,02,09,235/- u/s 68 of the act.”
The brief facts of the case are that the assessee filed the return of income for the Assessment Year 2017–18 on 08.03.2018, declaring a total income of Rs. 4,01,340/-. The case was subsequently selected for complete scrutiny, and a notice under Section 143(2) of the Act was issued on Mohmmedayaz Janmohmmed Shaikh vs. ITO Asst.Year –2017-18 - 2–
08.2018. During the assessment proceedings, the Assessing Officer noted that the assessee had deposited substantial amounts in the bank, including credits of Rs. 1,20,27,500/- and debits of Rs. 90,44,526/- in the SBI Account bearing No. 32188519922, along with foreign currency purchases amounting to Rs. 81,81,735/-. Despite being given several opportunities, the assessee failed to satisfactorily explain the nature and source of these credit entries and foreign currency transactions. The assessee submitted that the amounts represented receipts related to pilgrimage (Umrah) services, but the Assessing Officer noted that such receipts were not supported by individual ledger accounts for each pilgrim detailing receipts and related expenses, along with their identities and travel details. Further, the assessee did not furnish any such ledgers or identity proofs of the pilgrims nor the corresponding expense records, even after specific queries having been raised. As a consequence of the failure to explain the source and nature of the total deposits of Rs. 2,02,09,235/-, including cash deposits made during the demonetization period, the entire amount was treated as unexplained income under Section 68 of the Act and added to the assessee's total income.
In appeal before CIT(Appeals), the assessee contended that he is the proprietor of M/s Gawara Tours & Travels and that the income in question was earned through organizing Umrah pilgrimages to Saudi Arabia during the relevant financial year. It was further claimed that cash received from various pilgrims was deposited in his bank account and subsequently used to purchase foreign currency from money exchangers for meeting expenses in Saudi Arabia, including air tickets for the pilgrims. The assessee also submitted a request to admit additional evidence in support of these claims Asst.Year –2017-18 - 3–
and sought deletion of the addition made by the AO. However, upon examination of the submissions and supporting documents, CIT(Appeals) rejected the assessee’s explanation for several reasons. Firstly, although the assessee claimed to be engaged in organizing Haj and Umrah pilgrimages, he failed to submit any authorization or license from the Government of India permitting him to do so. Secondly, while a list of clients was provided, there was a complete absence of documentary proof to establish the genuineness of the claim - such as agreements, travel itineraries, or communication with the clients - rendering the list unverifiable and unreliable. Thirdly, though the assessee submitted some cash memos from M/s Flora Holidays Pvt. Ltd., supposedly in support of currency purchases made on behalf of clients, however, upon verification, various discrepancies were noted. For instance, in the case of a client named Mr. Shaikh Mohammedayaz (Passport No.
Z3519349), Flora Holidays allegedly provided foreign currency equivalent to Rs. 18,26,000/-, whereas the amount received from the client, as per the assessee's own list, was only Rs. 4,88,800/-, indicating clear inconsistencies and implying that the documents may have been fabricated to support the assessee’s claims. Moreover, although the assessee claimed to be providing accommodation and other services in Saudi Arabia, no evidence was furnished to show ownership or rental of any property there, further raising questions on the credibility of the assessee’s claim. In light of these deficiencies and inconsistencies, CIT(Appeals) dismissed the assessee’s appeal and held that the cash deposits and foreign currency transactions remained unexplained.
Asst.Year –2017-18
- 4–
The assessee is in appeal before us against the aforesaid order passed by CIT(Appeals) confirming the additions made by the assessing officer. On going to the submissions made by the counsel for the assessee and the Ld. DR, we observe that in the instant case evidently, the assessee had also made withdrawals amounting to Rs. 90,44,526/- from the same SBI Account bearing No. 32188519922, in which the deposits were made by the assessee. Asst.Year –2017-18 - 5–
the assessee had also made withdrawals amounting to Rs. 90,44,526/- from the same SBI Account bearing No. 32188519922, in which the deposits were made by the assessee, which as per the Counsel for the assessee were towards meeting the travelling and other expenses related to the assessee’s business.
Accordingly, looking into the facts of the assessee’s case and in the interest of justice, a net profit of 5% on total credits/deposits is directed to be taken as the net profits of the assessee, keeping into the consideration the business carried out by the assessee.
In the result, the appeal of the assessee is partly allowed. This Order pronounced in Open Court on 24/06/2025 (DR. BRR KUMAR) JUDICIAL MEMBER Ahmedabad; Dated 24/06/2025
TANMAY, Sr. PSआदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to :
1. अपीलाथŎ / The Appellant
2. ŮȑथŎ / The Respondent.
3. संबंिधत आयकर आयुƅ / Concerned CIT
4. आयकर आयुƅ(अपील) / The CIT(A)-
5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाडŊ फाईल / Guard file.
आदेशानुसार/ BY ORDER,
उप/सहायक पंजीकार (Dy./Asstt.