RAVINDRA MAHADEV SATPUTE , MUMBAI V. ITO WARD 26(3)(6), MUMBAI

ITA 1198/MUM/2023

• Counselvise Citation: [2023] 102 COUNSELVISE.COM (IT) 0080 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: D
• Next Hearing Date: 06-11-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 10-04-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SANJAY THAKKAR
• Keywords: Opportunity of being heard; Additional evidence; TDS
• Section: 144; 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “D” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAHUL CHAUDHARY (JUDICIAL MEMBER) ITA No. 1198/MUM/2023 Assessment Year: 2017-18 Ravindra Mahadev Satpute Group No.2, Pachubai Chawl, Hariyali Village, Vikhroli East, Mumbai- 400083 Vs. ITO Ward 26(3)(6) Room No. 417, 4 th Floor, Kautilya Bhavan, C-41 to C- 43, G Block, Bandra Kurla Complex, Bandra (East), Mumbai- 400051 PAN No. BHFPS0240B Appellant Respondent Assessee by : Shri. Sanjay Thakkar Revenue by : Shri. Manoj Kumar Singh, Sr. AR Date of Hearing : 07/11/2023 Date of pronouncement : 08/11/2023 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 08/02/2023 passed by the Ld. Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre, Delhi (in short CIT(A)) for assessment year 2017-18, raising following grounds:- 1. On the facts and in the circumstances of the case and in law the order passed by the Honorable CIT (Appeals) is invalid and bad in law. 2. The appellant has submitted the cash denomination details and details of cash deposited in the Hindustan Co Limited amounting to Rs. 47,78,230/ appellate proceed beneficiary is the main objective of the business and there are many transactions in a single day, therefore it is not possible to keep the track on the identities of all the customers only keeps basic number as it is a volume based business and generates very low income In his submission with Honorable CIT(Appeals) NFAC in response to the notice of hearing the appellant has requested for another opportunity against the appellant but the Honorable CIT(Appeals) NFAC has not considered the same. 3. The Ld. AO has failed to use the power vested with him by the provisions of the Act. As per para 6 and para 8 of the As Order it is clear that the Ld. AO is having bank statement with him If he would have reviewed the bank statements for entire financial year he could have found that the appellant has deposited cash throughout the financial year and had transferred the same to the bank account of his Principal with whom he was registered as an agent commission which is declared as income and corresponding TDS has been claimed which could have been verified from Form 26AS. 4. All the enquiries pertaining to cash deposits during the demonetization period were for cash deposit of Specified Banned Notes (SBN)In the given case the total cash deposit during demonetization period is Rs. 47,78,230/ amount is Rs. 9,84,500/ details from the Bank. Even when this details were furnished with CIT (Appeals) NFAC and the appellant requested for another opportunity of being heard if the matter is to be decided against the appellant, the considered the same. This resulted in creation of huge demand which has made appellant's personal life miserable. PRAYER:- 1. In the light of the above grounds, your appellant prays that the details available with the Ld CIT(Appeals) NFAC should be considered and appellant be given The appellant has submitted the cash denomination details and details of cash deposited in the Hindustan Co-operative Bank Limited amounting to Rs. 47,78,230/- during the course of appellate proceedings As the transfer of the money to the beneficiary is the main objective of the business and there are many transactions in a single day, therefore it is not possible to keep the track on the identities of all the customers The appellant details of the customers like name and mobile number as it is a volume based business and generates very low In his submission with Honorable CIT(Appeals) NFAC in response to the notice of hearing the appellant has requested for another opportunity of being heard if the matter is to be decided against the appellant but the Honorable CIT(Appeals) NFAC has not considered the same. The Ld. AO has failed to use the power vested with him by the provisions of the Act. As per para 6 and para 8 of the As Order it is clear that the Ld. AO is having bank statement with If he would have reviewed the bank statements for entire financial year he could have found that the appellant has deposited cash throughout the financial year and had transferred the same to the bank account of his Principal with whom he was registered as an agent In response to this activity he has earned commission which is declared as income and corresponding TDS has been claimed which could have been verified from Form All the enquiries pertaining to cash deposits during the demonetization period were for cash deposit of Specified Banned Notes (SBN)In the given case the total cash deposit during demonetization period is Rs. 47,78,230/- out of which SBN 84,500/-. The Ld. AO could have asked for the details from the Bank. Even when this details were furnished with CIT (Appeals) NFAC and the appellant requested for another opportunity of being heard if the matter is to be decided against the appellant, the Honorable CIT(Appeals) NFAC has not considered the same. This resulted in creation of huge demand which has made appellant's personal life miserable. 1. In the light of the above grounds, your appellant prays that the details available with the Ld. AO as well as Honorable CIT(Appeals) NFAC should be considered and appellant be given Ravindra Mahadev Satpute 2 ITA No. 1198/Mum/2023 The appellant has submitted the cash denomination details and operative Bank during the course of As the transfer of the money to the beneficiary is the main objective of the business and there are many transactions in a single day, therefore it is not possible to The appellant details of the customers like name and mobile number as it is a volume based business and generates very low In his submission with Honorable CIT(Appeals) NFAC in response to the notice of hearing the appellant has requested for of being heard if the matter is to be decided against the appellant but the Honorable CIT(Appeals) NFAC has The Ld. AO has failed to use the power vested with him by the provisions of the Act. As per para 6 and para 8 of the Assessment Order it is clear that the Ld. AO is having bank statement with If he would have reviewed the bank statements for entire financial year he could have found that the appellant has deposited cash throughout the financial year and had transferred the same to the bank account of his Principal with whom he was In response to this activity he has earned commission which is declared as income and corresponding TDS has been claimed which could have been verified from Form All the enquiries pertaining to cash deposits during the demonetization period were for cash deposit of Specified Banned Notes (SBN)In the given case the total cash deposit during out of which SBN . The Ld. AO could have asked for the details from the Bank. Even when this details were furnished with CIT (Appeals) NFAC and the appellant requested for another opportunity of being heard if the matter is to be decided against Honorable CIT(Appeals) NFAC has not considered the same. This resulted in creation of huge demand 1. In the light of the above grounds, your appellant prays that the AO as well as Honorable CIT(Appeals) NFAC should be considered and appellant be given chance to submit additional evidence to prove his genuineness and grant relief accordingly. 2. The appellant craves leave to add, to alter or amend any of the above grounds of appeal as before the hearing of this appeal. 2. Briefly stated facts of the case that the assessee, proprietor M/s Mister Enterprises filed its return declaring total income in the business of Money Transfer as an authorized agent of M/s ITZ Cash Card Limited which was later on taken over by Ebix Payment Services Private Limited money from the customers for further relatives etc i.e. beneficiary from his bank account to his principle The return of income filed by the assessee was selected for scrutiny. The assessing officer observed during demonetization period assessee in the Hindustan Co. Op Bank Ltd. In view of no explanation or any submis source of cash deposit, t cash deposited as unexplained Act in the order passed u/s 144 of the Act further appeal, the CIT(A),however the Ld. CIT(A) upheld the addition observing as under: 5.2 Decision on grounds of appeal and thereof: gone through the assessment order, grounds of appeal statement of facts and written submission filed by the appellant It has been submitted by the appellant that he is engaged in the business of money transfer and is authorized money transfer agent where cash receipt from various customers deposited in his account and subsequently transfer it to ITZ Cash Card chance to submit additional evidence to prove his genuineness and grant relief accordingly. The appellant craves leave to add, to alter or amend any of the unds of appeal as may be advised, at any time on or before the hearing of this appeal. facts of the case that the assessee, proprietor Mister Enterprises filed its return of income on 31.03.2018 total income at Rs. 3,87,340/-. The assessee was engaged in the business of Money Transfer as an authorized agent of M/s ITZ Cash Card Limited which was later on taken over by Ebix Payment Services Private Limited. The assessee use money from the customers for further transfer to their beneficiary. The assessee used to transfer money from his bank account to his principle i.e. ITZ Cash Card Limited he return of income filed by the assessee was selected for scrutiny. The assessing officer observed cash deposited of Rs. 47,78,230/ during demonetization period in bank accounts maintain assessee in the Hindustan Co. Op Bank Ltd. In view of no xplanation or any submission on behalf of the assessee, regarding source of cash deposit, the assessing officer held that the entire unexplained and made addition u/s 69A of the Act in the order passed u/s 144 of the Act i.e. ex- assessee filed submissions before the Ld. however the Ld. CIT(A) upheld the addition observing as 5.2 Decision on grounds of appeal and thereof:- I have carefully gone through the assessment order, grounds of appeal statement of facts and written submission filed by the appellant It has been submitted by the appellant that he is engaged in the business of money transfer and is authorized money transfer agent where cash receipt from various customers deposited in account and subsequently transfer it to ITZ Cash Card Ravindra Mahadev Satpute 3 ITA No. 1198/Mum/2023 chance to submit additional evidence to prove his genuineness The appellant craves leave to add, to alter or amend any of the may be advised, at any time on or facts of the case that the assessee, proprietor of of income on 31.03.2018 . The assessee was engaged in the business of Money Transfer as an authorized agent of M/s ITZ Cash Card Limited which was later on taken over by Ebix he assessee used to receive transfer to their friends, to transfer money i.e. ITZ Cash Card Limited he return of income filed by the assessee was selected for scrutiny. Rs. 47,78,230/- in bank accounts maintained by the assessee in the Hindustan Co. Op Bank Ltd. In view of no sion on behalf of the assessee, regarding he assessing officer held that the entire made addition u/s 69A of the -parte order. On assessee filed submissions before the Ld. however the Ld. CIT(A) upheld the addition observing as I have carefully gone through the assessment order, grounds of appeal, statement of facts and written submission filed by the appellant It has been submitted by the appellant that he is engaged in the business of money transfer and is authorized money transfer agent where cash receipt from various customers deposited in account and subsequently transfer it to ITZ Cash Card Limited The appellant had submitted the cash denomination detail and details of cash deposited in the Hindustan Cooperative Bank Limited amounting to Rs. 47,78,230/ the course of assessment proc in respect of cash deposited in the bank and its source with details of identifiable person with PAN or without PAN was issued to the appellant. But no cogent explanation or reply or detail was submitted by the appellant i cash deposit during the demonetization period Even during appellate proceedings also, apart from submitting that the appellant is in business of money transfer and is authorized money transfer agent no explanation or details of perso whom the above cash deposited was received by the appellant, had not been submitted If a person is an authorized money transfer agent, it is his obligatory duty to properly maintain the accounts/details of person from whom cash was received and further deposited in the bank account and accordingly transfer to the account of beneficiary. The appellant has failed to discharge this primary onus of source of the cash deposit in the bank during assessment proceedings as well as in the appellate proceedin upheld the addition of Rs. 47,78,230/ unexplained money u/s 69A made by the AO. Thus Ground no. 3 raised by the appellant is dismissed 3. Before us the Ld. Counsel for admitting additional evidence Counsel submitted that out of the entire sum of Rs. 47,78,230/ only very small amount of Rs. 47,78,230/ 08.11.2016 in old notes currency only. Further file complete details of the name and address of the persons from whom cash has been deposited Officer. 4. We have heard material on record. We find the Ld. CIT(A) has sustained the addition mainly for the reason of absence of identity of the persons who has deposited the money. Before us the Ld. Counsel Limited The appellant had submitted the cash denomination detail and details of cash deposited in the Hindustan Cooperative Bank Limited amounting to Rs. 47,78,230/ the course of assessment proceedings, a detailed questionnaire in respect of cash deposited in the bank and its source with details of identifiable person with PAN or without PAN was issued to the appellant. But no cogent explanation or reply or detail was submitted by the appellant in respect of the above cash deposit during the demonetization period Even during appellate proceedings also, apart from submitting that the appellant is in business of money transfer and is authorized money transfer agent no explanation or details of perso whom the above cash deposited was received by the appellant, had not been submitted If a person is an authorized money transfer agent, it is his obligatory duty to properly maintain the accounts/details of person from whom cash was received and ther deposited in the bank account and accordingly transfer to the account of beneficiary. The appellant has failed to discharge this primary onus of source of the cash deposit in the bank during assessment proceedings as well as in the appellate proceedings Therefore, I have no other option but to upheld the addition of Rs. 47,78,230/- on account of unexplained money u/s 69A made by the AO. Thus Ground no. 3 raised by the appellant is dismissed Before us the Ld. Counsel for the assessee filed an applica admitting additional evidences containing page 1 to 81. The Ld Counsel submitted that out of the entire sum of Rs. 47,78,230/ only very small amount of Rs. 47,78,230/- was received on in old notes and balance amount received . Further, he submitted that the assessee file complete details of the name and address of the persons from cash has been deposited for verification by the Assessing heard rival submission of parties and p material on record. We find the Ld. CIT(A) has sustained the addition mainly for the reason of absence of identity of the persons who has deposited the money. Before us the Ld. Counsel Ravindra Mahadev Satpute 4 ITA No. 1198/Mum/2023 Limited The appellant had submitted the cash denomination detail and details of cash deposited in the Hindustan Cooperative Bank Limited amounting to Rs. 47,78,230/-During eedings, a detailed questionnaire in respect of cash deposited in the bank and its source with details of identifiable person with PAN or without PAN was issued to the appellant. But no cogent explanation or reply or n respect of the above cash deposit during the demonetization period Even during appellate proceedings also, apart from submitting that the appellant is in business of money transfer and is authorized money transfer agent no explanation or details of persons from whom the above cash deposited was received by the appellant, had not been submitted If a person is an authorized money transfer agent, it is his obligatory duty to properly maintain the accounts/details of person from whom cash was received and ther deposited in the bank account and accordingly transfer to the account of beneficiary. The appellant has failed to discharge this primary onus of source of the cash deposit in the bank during assessment proceedings as well as in the gs Therefore, I have no other option but to on account of unexplained money u/s 69A made by the AO. Thus Ground no. the assessee filed an application containing page 1 to 81. The Ld Counsel submitted that out of the entire sum of Rs. 47,78,230/- was received on and balance amount received was in new he submitted that the assessee willing to file complete details of the name and address of the persons from for verification by the Assessing parties and perused the material on record. We find the Ld. CIT(A) has sustained the addition mainly for the reason of absence of identity of the persons who has deposited the money. Before us the Ld. Counsel for the assessee has filed additional evidences and express justify nature and source of the cash deposited in the bank account which has been held by the assessing offic deposit. Accordingly, to the file of the assess assessing officer may call for the information regarding name and address of person who ITZ Cash Card Limited out any enquiries as d case, however, he shall provide the assessee. Accordingly allowed for statistical purpose. 5. In the result, appeal of the assessee i purpose. Order pronounced in the open Court on Sd/ (RAHUL CHAUDHARY JUDICIAL MEMBER Mumbai; Dated: 08/11/2023 Shubham P. Lohar Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// filed additional evidences and express justify nature and source of the cash deposited in the bank account which has been held by the assessing officer as unexplained cash deposit. Accordingly, we feel appropriate to restore this issue back to the file of the assessing officer for deciding afresh. If required the assessing officer may call for the information regarding name and who had cash deposited, from the principle M/s Card Limited. The assessing officer is at liberty to carry as deemed fit in facts and circumstances of the , he shall provide adequate opportunity being heard to the assessee. Accordingly, grounds of the appeal of the assessee allowed for statistical purpose. In the result, appeal of the assessee is allowed for statistical nounced in the open Court on 08/11 Sd/- RAHUL CHAUDHARY) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Ravindra Mahadev Satpute 5 ITA No. 1198/Mum/2023 filed additional evidences and express willingness to justify nature and source of the cash deposited in the bank account er as unexplained cash appropriate to restore this issue back r deciding afresh. If required the assessing officer may call for the information regarding name and the principle M/s is at liberty to carry in facts and circumstances of the adequate opportunity being heard to of the appeal of the assessee are s allowed for statistical 11/2023. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai