Loading judgment…
Facts
The Assessing Officer (AO) received SFT information about substantial cash deposits by the assessee and completed the assessment under section 144 by adding the cash deposit as unexplained income under section 69A, as the assessee did not respond to notices. During appellate proceedings, the assessee submitted that he was a money transfer agent for Oxigen Services India Pvt. Ltd. and the cash deposits were customer receipts subsequently transferred, on which he earned commission.
Held
The Tribunal held that the assessee was indeed a money transfer agent for Oxigen Services India Pvt. Ltd., and the cash deposits were related to this agency business. The assessee had offered the commission income for taxation, and the AO could not rebut the assessee's contentions during remand proceedings.
Key Issues
Whether cash deposits, in the context of a money transfer agent's business, can be treated as unexplained income, and whether additional evidence can be admitted during appellate proceedings.
Sections Cited
144, 69A, 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, SURAT BENCH, SURAT
Before: Shri Sanjay Garg & Shri Bijayananda Pruseth
1-2. ITO 1.2. Umesh Bhagubhai Patel बनाम/ Daman Ward 142, Kund Falia v/s. Daman – 396 210 Bhimpore, Daman Nr. Supreme Industrial Estate Daman and Diu – 396 210 "थायी लेखा सं./PAN: AKWPP 2859 C (अपीलाथ(/ Appellant) (!) यथ(/ Respondent) Assessee by : Shri Hardik Vora, AR Revenue by : Shri Mukesh Jain, CIT (DR) सुनवाई की तारीख/Date of Hearing : 19/11/2025 घोषणा की तारीख /Date of Pronouncement: 17/02/2026 आदेश/O R D E R Per Sanjay Garg, Judicial Member: Both these appeals have been preferred by the Revenue against the separate orders of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘CIT(A)’] of even date 15/07/2024 for the Assessment Years (AYs) 2017-18 and 2018-19. Since both these appeals pertain to the same assessee and issues raised are identical (except quantum in appeals), they are disposed of by this common order for the sake of convenience. First, we take up the & 911/SRT/2024 ITO vs. Umesh Bhaghubhai Patel Asst. Years : 2017-18 & 2018-19 respecticvely for AY 2017-18 as lead case for the purpose of narration of facts. for AY 2017-18 2. The Revenue has raised the following grounds of appeal:
“(1)On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred accepting the evidence produced during the appellate proceedings as the assessee has failed to demonstrate that his case was covered under any of the conditions mentioned in clause (a) to (d) of the Rule 46A of the IT Rules.
(2) On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the addition of Rs. 3,32,52,200/- [Rs.5,45,19,800/- for AY 2018-19] made by the Assessing Officer on account of unexplained money by the observing that cash deposits cannot be termed as income from undisclosed sources and the AO has not proved anywhere that the assessee had any other sources of income from where income of this magnitude could be earned ignoring the fact that the assessee had not furnished any submissions/documents during the course of assessment proceedings or no such mandate of conducting further enquiries was given to the AO during the remand proceedings.”
The brief facts of the case are that assessee is an individual. The Assessing Officer (in short “the AO) received SFT information that the assessee has deposited substantial cash amounting to Rs 3,30,27,200/- in his various Bank accounts. As the assessee did not reply to any of the notices issued by the AO, assessment was completed by the AO u/s 144 by adding Rs 3,32,52,200/- on account of cash deposit in bank u/s 69A of the Act.
In appeal before the Ld. CIT(A), the assessee submitted that the assessee had obtained license from M/s. Oxigen services India Pvt. Ltd as a money transfer agent of M/s. Oxigen services India Pvt. Ltd (Agent code- 2116800009). The assessee also furnished the copy of certificate of appointment as the Money Transfer Agent issued by Oxigen Services (India) Pvt Ltd. It was further submitted that whatever cash deposited in the various & 911/SRT/2024 ITO vs. Umesh Bhaghubhai Patel Asst. Years : 2017-18 & 2018-19 respecticvely bank accounts maintained by the assessee during the year under consideration, in fact, were receipt from various customers and subsequently transferred to Oxigen services India Pvt Ltd. That these funds were collected by the assessee on behalf of M/s Oxigen Services India Pvt. Ltd. and these transactions were carried out by him on behalf of Oxigen Services India Pvt. Ltd. for which the assessee got the commission from M/s. Oxigen Services India Pvt. Ltd. The assessee, in this respect, also relied upon the Form No. 26AS and also upon the commission statement received from Oxigen Services (India) Pvt Ltd. The Ld. CIT(A) called for remand report from the AO on the details and evidences furnished by the assessee before him. In his remand report, though the AO objected to the admission of additional evidence, however, could no rebut the contention of the assessee that the assessee was a money transfer agent of Oxigen Services (India) Pvt Ltd. and further that the assessee during the year had received commission of Rs.1,97,477/- as per form 26AS from Oxigen Services (India) Pvt Ltd. on a total remittance of Rs.4,43,82,551/- made on behalf of Oxigen Services (India) Pvt Ltd. Considering the aforesaid remand report, the Ld. CIT(A) deleted the addition so made by the AO.
Before us, the Ld. DR could not rebut the aforesaid factual position on the file. The AO, during the remand proceedings, duly verified the contentions of the assessee and found that the assessee was only a money transfer agent of Oxigen Services (India) Pvt Ltd. The assessee had duly offered for taxation the commission income earned by it. Therefore, we do not find any infirmity in the order of the Ld. CIT(A) and the same is, accordingly, upheld.
& 911/SRT/2024 ITO vs. Umesh Bhaghubhai Patel Asst. Years : 2017-18 & 2018-19 respecticvely
In the result, the appeal of the Revenue in is hereby dismissed.
AY 2018-19 7. Since the facts and issues involved in this appeal are identical to that have been discussed as above in Revenue’s appeal for AY 2017-18 in hence, our findings given above on the identical issues will mutatis mutandis apply herein, and this appeal of the Revenue is also dismissed.
In the result, both the appeals of the Revenue stand dismissed.