INCOME TAX OFFICER, NAHAN vs. RAJ KUMAR, NAHAN

The Revenue has taken four grounds of appeal, however, its grievance revolves around a single issue, namely, the ld.CIT (Appeals) has erred in deleting the addition of Rs.1,95,61,240/-.

The brief facts of the case are that assessee did not file his return of income for assessment year 2017-18 u/s 139 of the Income Tax Act. The AO found a huge cash deposit in the bank account of the assessee, hence, in a very brief ex-parte order, he has made an addition of Rs.1,95,61,240/-.

On appeal, the ld.CIT (Appeals) has deleted this addition by recording following finding : “6. The appellant has raised 5 grounds of appeal, all relating to the additions made in the assessment order u/s 147 r.w.s 144 r.w.s 144B dated 14.03.2022. During the course of appellate proceedings, the appellant has filed his written submissions. The gist of the appellant's submissions is that he was a distributor of mobile recharge with Airtel and his business activity was to provide recharge service to various retailers and collects cash from them. After the collection of cash/cheques from various retailers, the collected amount was deposited into the bank & thereafter was immediately transferred to Airtel to purchase recharge again. The appellant received a commission on the said recharge. Further, the appellant has stated that the buyers buy recharge coupons in cash & online and he did not allow any credit facility to the buyers and therefore, no data of the persons from whom cash was received is maintained. However, the purchase of recharge coupons from Airtel is itself primary evidence to prove the activity of the appellant The appellant has stated that the bank statement is independent evidence about the activity of the appellant Further, the appellant has stated that on similar issue in his case, assessment for AY 2015-16 was reopened and his explanation was accepted in assessment order u/s 147 rws 144B dated 05.12.2023 by making no addition on the said issue. The appellant has submitted the copy of agreement between Airtel Ltd & Wmseff, cash book, bank statements, Debtors Ledger Account-Airtel along with his written submissions in support of his claims. 7. The written submissions of the appellant have been perused. On verification of the bank account statement of State Bank of India bearing A/c No.65181903091, ft is found that the assessee had made cash deposits during the year under consideration and also debited/transferred amounts on various dates to Bharti Airtel Ltd. Further, it is seen that, in the appellant's case no addition was made in the assessment order u/s 147 rws 144B dated 05.12.2023 for AY 2015-16 on the same issue. From the Bank A./c statement prima facie it

With the assistance of ld. DR, we have gone through the record carefully. A perusal of the order of ld.CIT (Appeals) would reveal that assessee was an authorized distributor of mobile recharge coupon with Airtel company. He has filed his Agreement with Bharti Airtel Ltd. and explained that whatever cash he has received, was deposited in the bank account. Thereafter, it was transmitted to the company through account payee cheque. He has earned only a small amount of commission income. The ld.CIT (Appeals) has verified this aspect and accepted the contention of the assessee. The ld. DR submitted that assessee did not submit before the AO these materials and therefore, ld.CIT (Appeals) ought to have not accepted the version of the assessee. We do not find force in this contention because the charge against the assessee was to explain the source of deposits. The ld. AO has not