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Facts
The assessee, a housewife, was represented by her brother and husband. Her husband entered into an agreement with State Bank of India (SBI) as a Customer Service Point (CSP). The husband collected cash, deposited it in the assessee's bank account, and then transferred it to Swayamshree Micro Credit Services (SMCS), which represented SBI.
Held
The Tribunal noted that the assessee was a matric-pass lady and that her unawareness was exploited. The bank account statements showed cash deposits followed by immediate transfers, and a very low balance. The additions made by the Assessing Officer and confirmed by the CIT(A) were based on a mistaken assumption.
Key Issues
Whether the additions made by the Assessing Officer and confirmed by the CIT(A) are sustainable when the transactions were a result of a mistaken assumption and the assessee's lack of business acumen.
Sections Cited
Section 25 of the Companies Act, 1956
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Income Tax Appellate Tribunal, CUTTACK BENCH CUTTACK
Before: SHRI GEORGE MATHAN & SHRI MADHUSUDAN SAWDIA
Assessee represented by Shri Bijoy Kumar Sethy (Brother of the assessee) and Shri Akshya Kumar Sethy (Husband of the assessee) Department represented by Shri Vijay Singh, Sr. DR Date of hearing 20/02/2026 Date of pronouncement 20/02/2026 O R D E R PER: BENCH 1. This is the appeal filed by the assessee against the order of the ld. CIT(A), NFAC, Delhi in Appeal No. NFAC/2015-16/10253834 dated 21/11/2025 for the A.Y. 2016-17.
Shri Bijoy Kumar Sethy, he claims to be brother of the assessee appeared on behalf of the assessee. Shri Akshya Kumar Sethy, husband of the assessee was also present in the Court and Shri Vijay Singh, ld. Sr. DR represented on behalf of the revenue.
It was submitted by the ld. AR that the assessee is a house wife, she does not have any business. The assessee’s husband has entered into an agreement with State Bank of India as a Customer Service Point (CSP). The agreement between the assessee’s husband and State Bank of India represented by Swayamshree Micro Credit Services reads as follows:
It was the submission that the assessee’s husband acting as the CSP, had collected cash from various distributors and had deposited the monies in the bank account of the assessee and the same was transferred to the Swayamshree Micro Credit Services which represented State Bank of India. The ld. AR has placed before us the bank account statement also which shows the cash deposits and transferred to SWAYA AT 10 Janaki Sethy Vs ITO representing Swayamshree Micro Credit Services. It was the submission that the assessee had been given the details to a local counsel for filing her income tax returns and the counsel had filed the returns showing that the assessee had income from dairy farm and paddy business. It was the submission that the assessee did not do any dairy farm or paddy business and the assessee is only a house wife. The deposits in the bank account representing cash have also been clearly transferred to the principal and only the minimum balance is maintained. It was the submission that during the year 2016-17, the assessee’s husband had opened a current account and the transactions had been shifted subsequently through the assessee’s husband’s current account. It was a prayer that the additions as made by the Assessing Officer and as confirmed by the ld. CIT(A) may be deleted.
In reply, the ld. Sr.DR submitted that he has sympathy for the assessee but the fact that she has filed her return of income disclosing diary farm and paddy business as led to this predicament. It was the submission that the verification has been signed by the assessee and therefore, it has to be considered as true and correct. The ld. Sr.DR vehemently supported the orders of the Assessing Officer and the ld. CIT(A).
We have considered the rival submissions. The assessee is a matric pass lady. This is a classic case where unawareness has been used to the disadvantage of the assessee. Admittedly, the assessee has filed her return of income. The return of income has been processed. The advice received by the assessee, Janaki Sethy Vs ITO admittedly, is wrong. But it is also a fact that the mistake has been identified and the attempt is being made to rectify such mistake. The ld. AR on behalf of the assessee has brought the facts outrightly in his correct perspective. The facts have also been placed before us. The bank accounts have also been placed before us which clearly shows that the moneys have been deposited in the bank account and immediately thereafter the same amounts have been transferred to the Principal i.e. Swayamshree Micro Credit Services. The ld. AR has also placed before us the current account opened by the husband of the assessee and the same also shows the said transactions w.e.f. 08/08/2016. A perusal of the bank accounts also shows that for the impugned assessment year, the clear balance available is only Rs. 590.35. All the moneys are deposited in cash and transferred. This is not a case of cash deposit and cash withdrawals. The assessee’s husband’s customer service point code and other details have also been placed before us, this being so, we are of the view that the addition as made by the Assessing Officer and as confirmed by the ld. CIT(A) does not represent the income of the assessee, but it is made on mistaken assumption and consequently we delete the same.