JAVED MUNIR KHAN,MUMBAI V. ITO 26(1)(4), MUMBAI

ITA 5428/MUM/2024

AI Insights

The case involves Javed Munir Khan, who appealed against the order of the Commissioner of Income-tax (Appeals) - National Faceless Appeal Centre, which pertained to the assessment year 2017-18. The primary contention was regarding the addition of cash deposits amounting to Rs. 1,13,28,200 during the demonetization period, which were treated as unexplained money under section 69A of the Income Tax Act. The CIT(A) had partially relieved the assessee by deleting some additions and reclassifying others as business income, taxed under section 115BBE. The Tribunal dismissed the appeal, agreeing with the CIT(A)'s application of section 44AD for computing business income.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 829503 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2026
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Mumbai
• Assessment Year: misc
• Appeal Filed On: 17-10-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIVEK PERAMPURNA
• Keywords: Business income
• Section: 68; 44AD

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “F” MUMBAI BEFORE SHRI SANDEEP GOSAIN (JUDICIAL MEMBER) AND SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) ITA No. 5428/MUM/2024 Assessment Year: 2017-18 Javed Munir Khan, 7 B 7 Gurudatt Nagar, Behind Patel Wadi, Pipe Road, Kurla West, Mumbai-400070. Vs. ITO 26(1)(4), Kautilya Bhavan, Bandra Kurla Complex, G Block, Bandra East, Mumbai-400051. PAN NO. BGGPK 6204 B Appellant Respondent Assessee by : None Revenue by : Mr. Vivek Perampurna, CIT-DR Date of Hearing : 19/11/2025 Date of pronouncement : 13/01/2026 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 21.08.2024 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2017-18, raising following grounds: 1. On the facts and in the circumstances of the case the Learned CIT (A) has erred in granting relief of Rs.60,75,800/- of cash deposits against total cash deposits of Rs.1,13,28,200/- during the period of demonetisation on Printed from counselvise.com account of cash deposit in regular notes without appreciating the facts that all the cash deposits were made of regular notes except for the first cash dep made subsequent to the announcement of demonetisation, eventually the addition restricted to the amount of Rs.52,52,400/ deleted 2. The Learned CIT(A) has erred in making addition of Rs. 12,27,195/ Bank Account of Rs.92,64,140/ than demonetisation and Rs.60,75,800/ of demonetisation of regular notes u/s. 69A of the Income Tax Act, The Learned CIT (A) erred in treating deposits aforesaid as the turnover of the Appellant, whereas the profit element embedded in the total deposits which could be verified as per Form26AS should have been treated as the turnover of the appellant for working out presumptive prof please to delete the total additions made u/s. 69A. 3. The Learned CIT(A) has erred in levying tax on above referred addition u/s. 115BBE of the I. T. 2. At the outset, we note that despite due service of hearing through registered post, none appeared on behalf of the assessee, nor was any request for adjournment made of a written submission on behalf of the assessee. record, we further find that on earlier occasion appeared for the assessee. In these circumstances, we are satisfied that the assessee was not interested in prosecuting the appeal. Accordingly, the appeal was heard hearing the submissions of the Ld. Depa 3. Having perused the records and after considering the arguments of the Ld. DR, we find that in this case issue in dispute is regarding addition of cash deposits during and post ITA No. account of cash deposit in regular notes without appreciating the facts that all the cash deposits were made of regular notes except for the first cash deposit which was made subsequent to the announcement of demonetisation, eventually the addition restricted to the amount of Rs.52,52,400/- u/s. 68 of the Income Tax Act, 1961 be deleted The Learned CIT(A) has erred in making addition of Rs. 12,27,195/-, being 8 percent of the cash deposited in to Bank Account of Rs.92,64,140/-during the period other than demonetisation and Rs.60,75,800/- during the period of demonetisation of regular notes u/s. 69A of the Income Tax Act, The Learned CIT (A) erred in treating the total cash deposits aforesaid as the turnover of the Appellant, whereas the profit element embedded in the total deposits which could be verified as per Form26AS should have been treated as the turnover of the appellant for working out presumptive profits u/s. 44AD, hence The bench may be please to delete the total additions made u/s. 69A. The Learned CIT(A) has erred in levying tax on above referred addition u/s. 115BBE of the I. T. Act, 1961. At the outset, we note that despite due service of hearing through registered post, none appeared on behalf of the ny request for adjournment made of a written submission on behalf of the assessee. On perusal of the record, we further find that on earlier occasions also no one had appeared for the assessee. In these circumstances, we are satisfied that the assessee was not interested in prosecuting the appeal. Accordingly, the appeal was heard ex parte qua the assessee hearing the submissions of the Ld. Departmental Representative. Having perused the records and after considering the arguments of the Ld. DR, we find that in this case issue in dispute is regarding addition of cash deposits during and post Javed Munir Khan 2 ITA No. 5428/MUM/2024 account of cash deposit in regular notes without appreciating the facts that all the cash deposits were made osit which was made subsequent to the announcement of demonetisation, eventually the addition restricted to the amount of u/s. 68 of the Income Tax Act, 1961 be The Learned CIT(A) has erred in making addition of Rs. g 8 percent of the cash deposited in to during the period other during the period of demonetisation of regular notes u/s. 69A of the Income the total cash deposits aforesaid as the turnover of the Appellant, whereas the profit element embedded in the total deposits which could be verified as per Form26AS should have been treated as the turnover of the appellant for working out 44AD, hence The bench may be please to delete the total additions made u/s. 69A. The Learned CIT(A) has erred in levying tax on above Act, 1961. At the outset, we note that despite due service of notice of hearing through registered post, none appeared on behalf of the ny request for adjournment made except filing On perusal of the s also no one had appeared for the assessee. In these circumstances, we are satisfied that the assessee was not interested in prosecuting the appeal. ex parte qua the assessee, after rtmental Representative. Having perused the records and after considering the arguments of the Ld. DR, we find that in this case issue in dispute is regarding addition of cash deposits during and post Printed from counselvise.com demonetization period. the demonetization period, the assessee had deposited aggregate cash amounting to ₹1,13,28,200/ to the show cause notice, the said amount was treated as unexplained money under section 69A of the Income The Assessing Officer further noticed that aggregate cash deposits of ₹92,64,140/- were made during the post As the assessee, despite being engaged in business, failed to furnish any details despite several opportunities, th estimated 10% of such deposits as income and made an addition of ₹9,26,414. 3.1 On appeal, the Ld. CIT(A), after calling for and considering a remand report from the Assessing Officer, granted partial relief. The Ld. CIT(A) noted that ₹1,13,28,200/- during the demonetization period, a sum of ₹60,75,800/- was deposited in the form of regular bank notes. Accordingly, relief was granted to that extent and the addition under section 69A was restricted to amount of ₹60,75,800/ computing business income. 3.2 The Ld. CIT(A) recorded a finding that the assessee was acting as a commission agent for Airtel Payment Bank Ltd. cash from persons desirous of remitting money to their relatives at ITA No. demonetization period. The Assessing Officer observe the demonetization period, the assessee had deposited aggregate 1,13,28,200/-. In the absence of any response to the show cause notice, the said amount was treated as unexplained money under section 69A of the Income The Assessing Officer further noticed that aggregate cash deposits were made during the post-demonetization period. As the assessee, despite being engaged in business, failed to furnish any details despite several opportunities, the Assessing Officer of such deposits as income and made an addition of On appeal, the Ld. CIT(A), after calling for and considering a remand report from the Assessing Officer, granted partial relief. The Ld. CIT(A) noted that out of the total cash deposits of during the demonetization period, a sum of was deposited in the form of regular bank notes. Accordingly, relief was granted to that extent and the addition under section 69A was restricted to ₹52,52,400/- 60,75,800/- was considered for the purpose of computing business income. The Ld. CIT(A) recorded a finding that the assessee was acting commission agent for Airtel Payment Bank Ltd. cash from persons desirous of remitting money to their relatives at Javed Munir Khan 3 ITA No. 5428/MUM/2024 The Assessing Officer observed that during the demonetization period, the assessee had deposited aggregate . In the absence of any response to the show cause notice, the said amount was treated as unexplained money under section 69A of the Income-tax Act, 1961. The Assessing Officer further noticed that aggregate cash deposits demonetization period. As the assessee, despite being engaged in business, failed to furnish e Assessing Officer of such deposits as income and made an addition of On appeal, the Ld. CIT(A), after calling for and considering a remand report from the Assessing Officer, granted partial relief. The out of the total cash deposits of during the demonetization period, a sum of was deposited in the form of regular bank notes. Accordingly, relief was granted to that extent and the addition -. However, the was considered for the purpose of The Ld. CIT(A) recorded a finding that the assessee was acting commission agent for Airtel Payment Bank Ltd., collecting cash from persons desirous of remitting money to their relatives at Printed from counselvise.com distant places, depositing the same in his bank account, and thereafter transferring it to the said bank. Taking note of the fact that the assessee had offered income in earli 44AD of the Act, the Ld. CIT(A) applied the presumptive provisions of section 44AD and computed business income at aggregate cash deposits of ₹60,75,800/-), thereby determining the taxable bus ₹12,27,195/-. The addition was thus sustained to the said extent.The relevant finding of the Ld. CIT(A) is reproduced as under: “7.2 Perusal of the above table reveals that the appellant has not disclosed entire receipts. From the facts bro assessment order it is clear that the appellant had deposited cash during the demonetization period to the tune of Rs. 1,13,28,200/ the period other than the demonetization period. The AO had made addition of Rs. 9,26,414/ Para 6.7.1 of this order the addition of Rs. 60,75,800/ deleted u/s 68 of the Act and it has been held that this amount of Rs. 60,75,800/ business profits. Therefore, the turnover of the appellant is reworked at Rs. 1,53,39,940/ 60,75,800/-]. The AO worked out the business profits at 10% of receipts. However, he has not brought out the reasons for adopting such rate. The its business income u/s 44AD of the Act. Therefore, the business income of the appellant is worked out @ 8% of Rs. 1,53,39,940/ i.e. Rs. 12,27,195/ and upheld at Rs. from 10% to 8%. Ground no.2 of appeal is partly allowed. 4. In our considered opinion, the Ld. CIT(A) has examined the issue in detail, duly considered the material on record, and passed a well-reasoned order Assessing Officer. Before us, the assessee has merely reiterated the ITA No. distant places, depositing the same in his bank account, and thereafter transferring it to the said bank. Taking note of the fact that the assessee had offered income in earlier years under section 44AD of the Act, the Ld. CIT(A) applied the presumptive provisions of section 44AD and computed business income at aggregate cash deposits of ₹1,53,39,940/- (₹ ), thereby determining the taxable bus . The addition was thus sustained to the said The relevant finding of the Ld. CIT(A) is reproduced as under: 7.2 Perusal of the above table reveals that the appellant has not disclosed entire receipts. From the facts brought out in the assessment order it is clear that the appellant had deposited cash during the demonetization period to the tune of Rs. 1,13,28,200/- and Cash to the tune of Rs. 92,64,140/ the period other than the demonetization period. The AO had made addition of Rs. 9,26,414/- being 10% of Rs. 92,64,140/ Para 6.7.1 of this order the addition of Rs. 60,75,800/ deleted u/s 68 of the Act and it has been held that this amount of Rs. 60,75,800/- will be considered for working out the iness profits. Therefore, the turnover of the appellant is reworked at Rs. 1,53,39,940/- [Rs. 92,64,140/ ]. The AO worked out the business profits at 10% of receipts. However, he has not brought out the reasons for adopting such rate. The appellant has stated that it has offered its business income u/s 44AD of the Act. Therefore, the business income of the appellant is worked out @ 8% of Rs. 1,53,39,940/ i.e. Rs. 12,27,195/-. The addition of business profits is reworked and upheld at Rs. 12,27,195/-. The business profits are reduced from 10% to 8%. Ground no.2 of appeal is partly allowed. In our considered opinion, the Ld. CIT(A) has examined the issue in detail, duly considered the material on record, and passed reasoned order after obtaining a remand report from the Assessing Officer. Before us, the assessee has merely reiterated the Javed Munir Khan 4 ITA No. 5428/MUM/2024 distant places, depositing the same in his bank account, and thereafter transferring it to the said bank. Taking note of the fact er years under section 44AD of the Act, the Ld. CIT(A) applied the presumptive provisions of section 44AD and computed business income at 8% on the ₹92,64,140/- + ), thereby determining the taxable business income at . The addition was thus sustained to the said The relevant finding of the Ld. CIT(A) is reproduced as under: 7.2 Perusal of the above table reveals that the appellant has not ught out in the assessment order it is clear that the appellant had deposited cash during the demonetization period to the tune of Rs. and Cash to the tune of Rs. 92,64,140/- during the period other than the demonetization period. The AO had being 10% of Rs. 92,64,140/-. In Para 6.7.1 of this order the addition of Rs. 60,75,800/- has been deleted u/s 68 of the Act and it has been held that this amount will be considered for working out the iness profits. Therefore, the turnover of the appellant is [Rs. 92,64,140/- + Rs. ]. The AO worked out the business profits at 10% of receipts. However, he has not brought out the reasons for appellant has stated that it has offered its business income u/s 44AD of the Act. Therefore, the business income of the appellant is worked out @ 8% of Rs. 1,53,39,940/- . The addition of business profits is reworked . The business profits are reduced from 10% to 8%. Ground no.2 of appeal is partly allowed.” In our considered opinion, the Ld. CIT(A) has examined the issue in detail, duly considered the material on record, and passed after obtaining a remand report from the Assessing Officer. Before us, the assessee has merely reiterated the Printed from counselvise.com submissions made before the Ld. CIT(A) and has not placed any new material or evidence on record to controvert the findings of the first appellate authority. We find no infirmity, either factual or legal, in the conclusions arrived at by the Ld. CIT(A). The approach adopted by the Ld. CIT(A) is reasonable and in accordance with law. of appeal raised by the assessee are dismissed. 5. In the result, the appeal of the assessee is dismissed. Order pronounced in the open Court on Sd/- (SANDEEP GOSAIN JUDICIAL MEMBER Mumbai; Dated: 13/01/2026 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// ITA No. submissions made before the Ld. CIT(A) and has not placed any new material or evidence on record to controvert the findings of the authority. We find no infirmity, either factual or legal, in the conclusions arrived at by the Ld. CIT(A). The approach adopted by the Ld. CIT(A) is reasonable and in accordance with law. Accordingly, the grounds of appeal raised by the assessee are dismissed. In the result, the appeal of the assessee is dismissed. ounced in the open Court on 13/01/2026. Sd/ SANDEEP GOSAIN) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Javed Munir Khan 5 ITA No. 5428/MUM/2024 submissions made before the Ld. CIT(A) and has not placed any new material or evidence on record to controvert the findings of the We find no infirmity, either factual or legal, in the conclusions arrived at by the Ld. CIT(A). The approach adopted by the Ld. CIT(A) Accordingly, the grounds In the result, the appeal of the assessee is dismissed. /01/2026. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai Printed from counselvise.com "