BHANUSHANKAR KASALSHIBHAI DAVE,SURAT V. ITO, WARD 3(2)(6), SURAT

ITA 927/SRT/2025

AI Insights

The case involves Bhanushankar Kasalshibhai Dave, who appealed against the order of the CIT(A) confirming the addition of Rs. 29,31,364 to his income for the Assessment Year 2012-13. The addition was initially made by the Assessing Officer based on unexplained cash deposits in a bank account used by the assessee's son for a money transfer business. The Tribunal found that the commission income from this business had been consistently accepted in previous assessments and that the modus operandi of the business was transparent, involving collection of cash from laborers and transfer to beneficiaries, with only a nominal commission charged per transaction.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 830854 (ITAT-SURAT)
• Duration Of Justice: 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 01-09-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income
• Section: 147; 148; 143(3); 133(6)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT MS. SUCHITRA KAMBLE, JUDICIAL MEMBER I.T.A. No. 927/SRT/2025 (Assessment Year: 2012-13) Bhanushankar Kasalshibhai Dave, A-8, Lalbag Society, Near Abhay Nagar, Chhaparabhatha, Surat-394107 [PAN : AADCE 0172 B] Vs. Income Tax Officer, Ward-3(2)(6), Surat (Appellant) .. (Respondent) Appellant represented by : Shri Mehul Shah, CA Respondent represented by: Shri Ashish Kumar, Sr DR Date of Hearing 21.01.2026 Date of Pronouncement 23.01.2026 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- This appeal has been filed by the assessee against the order dated 19.08.2025 passed by the Ld. Addl/JCIT(A), Panaji (hereinafter referred to as the “Ld. CIT(A)”), under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”) for Assessment Year 2012-13. 2. The assessee has raised following grounds of appeal:- “1. On the facts and circumstances of the case as well as law on the subject the learned CIT(A) has erred in confirming the action of the Ld. Assessing Officer in reopening assessment u/s. 147 by issuing notice u/s 148 of the I.T. Act, 1961. 2. On the facts and circumstances of the case as well as aw on the subject, the learned CIT(A) has erred in confirming the action of the Ld. Assessing Officer in making addition of Rs.29,31,364/- on account of estimation of profit in the business of money transfer. 3. It is therefore prayed that assessment framed u/s 143(3) r.ws. 147 of the Act may kindly be quashed and/or addition made by Lil Assessing Officer and confirmed by the Learned CIT(A) may please be deleted.” Printed from counselvise.com ITA No. 927/SRT/2025 Bhanushankar Kasalshibhai Dave Vs. ITO Asst. Year : 2012-13 - 2– 3. The assessee filed his return of income on 15.05.2012 declaring a total income of Rs. 3,03,350/- for the year under consideration. Based on information received that cash deposits amounting to Rs. 29,31,364/- were made in an account maintained with Union Bank of India, the Assessing Officer issued a notice u/s 133(6) of the Act, which remained uncomplied with. Thereafter, pursuant to the notice issued u/s 148 dated 30.03.2019, the assessee filed a return of income declaring total income of Rs. 3,16,440/-. The Assessing Officer, noting non- compliance with statutory notices and being unsatisfied with the explanation on record, treated the cash deposits of Rs. 29,31,364/- as unexplained income and added the same to the total income of the assessee. 4. During the course of assessment proceedings before the Assessing Officer, the assessee explained that he is a salaried teacher and that the said bank account was used by his son, Shri Priteshkumar Bhanushankar Dave, for money transfer business. Cash was collected from labourers and deposited in the account and thereafter transferred through account payee instruments to beneficiaries. Only commission of Rs. 40/- per instrument / transaction was earned and the same was already offered to tax. The modus operandi was stated to have been accepted in scrutiny assessments of the assessee’s son for earlier years. The Ld. CIT(A) confirmed the addition. 5. Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal. 6. Before us, the Ld. AR reiterated the submissions made before the lower authorities and submitted that the assessee is a salaried teacher and had no independent business activity. The cash deposits were not the income of the assessee but represented business receipts of his son from money transfer activity, wherein only commission income was earned. It was submitted that the Printed from counselvise.com ITA No. 927/SRT/2025 Bhanushankar Kasalshibhai Dave Vs. ITO Asst. Year : 2012-13 - 3– total deposits of Rs. 29,31,964/- consisted of 523 transactions and the assessee had offered commission income of Rs. 10,460/- (523 × Rs. 20/-) in the return filed u/s 148. The same business model had been accepted by the Department in the past assessments in the case of assessee’s son. Therefore, the addition of the entire cash deposits was unjustified and liable to be deleted. 7. The Ld. DR, on the other hand, supported the orders of the revenue authorities. 8. We have heard the rival contentions and perused the material available on record. In the present case, it is noticed that the account of the assessee has been used by his son for transfer of amounts collected from labourers to various places. In the case of the son, the amount of commission has been determined @ Rs. 40 per instrument/transaction. The assessee has also shown similar income @ Rs. 40 per instrument/transaction. The modus operandi is clearly discernible from the bank statements, which reflect cash deposits followed by immediate transfers through banking channels. We are satisfied that the commission charged at Rs. 40/- per instrument/transaction is reasonable and correct. Since such commission income has already been offered to tax, we hold that no addition is called for in this case. 9. In the result, the appeal of the assessee is allowed. This order is pronounced in the open Court on 23.01.2026 Sd/- Sd/- (SUCHITRA KAMBLE) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT Surat; Dated 23/01/2026 btk Printed from counselvise.com ITA No. 927/SRT/2025 Bhanushankar Kasalshibhai Dave Vs. ITO Asst. Year : 2012-13 - 4– आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ ) अपील ( / The CIT(A)- 5. िवभागीय Ůितिनिध , अिधकरण अपीलीय आयकर , /DR,ITAT, Surat, 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, TRUE COPY सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण ITAT, Surat 1. Date of dictation …dictated in the open court on..…21.01.2026….….. 2. Date on which the typed draft is placed before the Dictating Member … …22.01.2026………… 3. Other Member……22.01.2026…………… 4. Date on which the approved draft comes to the Sr.P.S./P.S …. …22.01.2026…………. 5. Date on which the fair order is placed before the Dictating Member for pronouncement .......23.01.2026........ 6. Date on which the fair order comes back to the Sr.P.S./P.S ……23.01.2026…..…………. 7. Date on which the file goes to the Bench Clerk ……23.01.2026.….…. 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order 10. Date of Dispatch of the Order…………………………………… Printed from counselvise.com "