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Facts
The assessee, an authorized Business Correspondent Agent (BCA) with PNB bank, appealed against the CIT(A)'s order which treated his cash deposits of Rs. 21,25,000 as unexplained. The lower authorities' reasoning was that the corresponding customer entries were not in dispute, but related to other PNB accounts.
Held
The Tribunal held that while the assessee could not fully verify all corresponding entries, the entire amount of Rs. 21,25,000 could not be added as unexplained under sections 68/69A of the Act. A lumpsum addition of Rs. 2 lakhs was deemed appropriate and just in the given facts, not to be treated as a precedent.
Key Issues
Whether cash deposits made by a Business Correspondent Agent can be treated as unexplained, and if so, to what extent.
Sections Cited
143(3), 68, 69A, 115BBE
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Income Tax Appellate Tribunal, DELHI BENCH: “SMC” NEW DELHI
Before: SHRI SATBEER SINGH GODARA
ORDER This assessee’s appeal for assessment year 2017-18, arises against the Commissioner of Income Tax (Appeals)/Addl/JCIT(A), [in short, the “CIT(A)”], Agra’s DIN and order no. ITBA/APL/S/250/2025-26/1079887625(1), dated 22.08.2025, involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused.
Coming to the assessee’s sole substantive grievance directed against both the learned lower authorities’ respective findings treating his cash deposits of Rs.21,25,000/- as unexplained, there does not appear to be much dispute between the parties that he has been an authorized Business Correspondent Agent “BCA” with M/s. PNB bank. And that the learned lower authorities have treated the impugned cash deposits as unexplained for the sole reason that the corresponding customers relate to other Punjab National Bank whose credit and debit entries are not in dispute.
That being the clinching factual position, this tribunal is of the considered view that although the assessee has not been able to get all the corresponding entries of credits and debits regarding other banks customers rectified/verified to the satisfaction of the learned lower authorities, the same could still not be added as unexplained under section 68/69A of the Act, in entirety. It is thus deemed appropriate in the larger interest of justice that a lumpsum addition of Rs.2 lakhs only in the given facts would be just and proper with a rider that the same shall not be treated as a precedent. The assessee gets relief of Rs.19.25 lakhs in other words. Necessary computation shall follow as per law.
So far as assessee’s assessment under section 115BBE is concerned, I quote S.M.I.L.E. Microfinance Ltd. Vs. ACIT, W.P. (MD) No.2078 of 2020 & 1742 of 2020, dated 19.11.2024 (Madras) that 2 | P a g e the impugned statutory provision would come into effect on the transaction done on or after 01.04.2017 only. The assessee is accordingly directed to be assessed under the normal provision as per law.