NITESHKUMAR CHANDRAKANTBHAI PATEL,KANTHARIYA, ANAND vs. ITO, WARD 1(3)(1), BARODA

O R D E R

PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:

“1. The learned CIT(A) wrongly dismissed the appeal by considering learned AO’s grounds only.

2. The learned CIT(A) heavily relied on the wrong base of the learned AO without considering materials available on records.

4. The confirmation of learned CIT (A) regarding addition resulted in tax impact on the sale proceeds of banana and not on commission income.

Niteshkumar Chandrakantbhai Patel vs. ITO Asst.Year –2017-18 - 2– 3. The brief facts of the case are that the assessee is a Banana Commission Agent earning primarily commission income from sale of bananas on behalf of farmers. The assessee worked as a middle man between farmers and fruit vendors. These fruit vendors are located at different cities of Gujarat, Haryana and Punjab. The business activity of the assessee mainly consists of supplying of bananas taken from the farmers to various fruit vendors, at their respective locations and collecting sale proceeds from fruit vendors and thereafter making payment to the farmers in cash by withdrawing the same from the bank account. Therefore, modus operandi of the assessee was that he collected sale proceeds of bananas from respective fruit vendors, in his own bank account and thereafter withdrew this amount for making payment to respective farmers, in cash.

5. In appeal, the assessee filed reply dated 12.12.2023 before Ld. CIT(A), and the Ld. CIT(A) also called for a remand report from the AO, where the AO raised concerns over the quality of evidences furnished by the assessee. Accordingly, Ld. CIT(A) confirmed the order passed by the Ld. AO on the ground that the assessee has not proven the genuineness of the banana supply business with reliable supporting evidences and has not submitted confirmation from the concerned parties with their identity, PAN and ITRs. While passing the order, Ld. CIT(A) made the following observations:

Niteshkumar Chandrakantbhai Patel vs. ITO Asst.Year –2017-18 - 3– “I have considered the finding of the AO in remand report submitted on without prejudice basis and counter comments of the appellant. I find that the appellant has not proved the genuineness of banana supply business with reliable supporting evidences and not submitted confirmations from the concerned parties with their identity, PAN and ITRs. Only giving phone numbers of some of the parties is not adequate to prove the genuineness of the transactions. Further the claim of earning commission at the rate of 2 to 3% is also not supported by any evidence. The contention of the appellant that cash was deposited from different locations is also found to inadequate since it is not backed up by the confirmation, identity and creditworthiness of the concerned party. In absence of such details I find that the appellant has not discharged the primary onus of proving genuineness of cash deposits made in the bank account. Therefore the addition made by the AO is confirmed and ground of appeal raised by the appellant is dismissed.”

6. Before us, the Counsel for the assessee submitted that the assessee had filed detailed submissions and explanation before Ld. CIT(A) which were clearly disregarded by the Ld. CIT(A) in a summary manner without giving any concrete finding with respect to the same. The Counsel for the assessee submitted that perusal of the bank account shows that cash was deposited in his bank account directly by the fruit vendors from various locations such as Surat, Vadodara, Delhi, Mohali, Rewari, Vasad, Anand, Rohtak, Khanna, Panipat etc. which shows that these amounts have been deposited by various vendors in his bank account who are situated in various part of India. It was submitted before us that Ld. CIT(A) failed to appreciate that the assessee is a resident of a small village Asodar located near Anand in Gujarat which clearly shows that the claim of the Department that the assessee had deposited cash in his bank account from different locations across India is clearly against the principle of probabilities and surrounding circumstances. Further, the Counsel for the assessee submitted that the assessee had furnished substantial details before Ld. CIT(A) for his consideration, however, without carrying out due verification, the Ld. CIT(A) simply brushed aside the additional evidences sought to be filed by the assessee. Accordingly, the Counsel for the assessee submitted that in the interest of justice, the case may be restored to the file of Ld. CIT(A) for de-novo consideration.

Niteshkumar Chandrakantbhai Patel vs. ITO Asst.Year –2017-18 - 4– 7. In response, the Ld. D.R. placed reliance on the observations made by the AO and Ld. CIT(A) in their respective orders.