ABHAY KATARIA,NEEMUCH vs. ITO, NEEMUCH

Assessee has raised following grounds of appeal:

Facts in brief are that the assessee is an individual and carrying on the business of running a shop in the name of MP Online Kisok Center. The assessee accepts amount from various customers for further deposit towards Telephone, Electricity, Tuition/Exam fees etc. Based on the reason that the cash of Rs.12,17,000/- was deposited in the bank account held with SBI, Neemuch during 9.11.2016 to 31.11.2016 case of the assessee selected for scrutiny. The assessee did not file any return of income. Thereafter certain opportunities were given and notice u/s 142(1) of the Act was issued. Ld.A.O concluded the assessment by observing that except the alleged cash deposit of Rs.10,00,000/- the remaining amount deposits at Rs.70,17,572/- relates to the transactions of MP Online services and on which 1% of income was estimated by Ld. A.O at Rs.70,176/- . For the cash deposited during the demonetization period at Rs.10,00,000/- Ld. A.O treated assessee invoking Section 69A r.w.s. 115BBE of the Act. Income assessed at Rs.10,70,180/-. Aggrieved assessee preferred appeal before Ld. CIT(A) but failed to succeed. Now the assessee is in appeal before this Tribunal.

Ld. Counsel for the assessee submitted that the alleged sum though deposited during the demonetization period but has been utilized for making on line payment on behalf of students to various universities which mainly included Vikram University, Ujjain and he further referred to the paper book placed at page 25 to 30 providing the details of the students for whom examination fees was deposited by the assessee through its MP Online Kisok Centre. He submitted that the alleged sum is part of gross receipt of Rs.80,17,572/- but Ld. A.O was treated only the alleged sum as unexplained cash and for the remaining amount has estimated it as the business receipt including income @1%. He further stated that since the alleged sum is part of business receipt only the income element can be added but not the total sum. vehemently argued supporting the orders of the lower authorities.

I have heard rival contentions and perused the records before me. Admittedly the assessee is running MP Online Kisok Centre and is regularly making payments on behalf of its customers towards, electricity, telephone, mobile, examination fees etc. In the bank account maintained by the assessee total credit during the year was Rs.80,17,572/- out of which Ld. A.O has accepted sum of Rs.70,17,572/- as a genuine business transaction of MP Online services but denied to treat the amount of Rs.10,00,000/- merely on the ground that it was received during the demonetization period. Though Ld. Departmental Representative has claimed that assessee was not authorized to receive old demonetization notes but this aspect can be dealt with the separate authorities prescribed under law. I find that the amount deposited in the bank account has been immediately utilized for making the payment for assessee filed the details for the amount of Rs.4,54,390/- with the name of students and the course they are pursuing. For the remaining amount also the major payment has been made to Vikram University, Ujjain but the students details are not available.