JEEVAN JAVERCHAND RATHOD ,MUMBAI V. INCOME TAX OFFICER 31(2)(1), MUMBAI

ITA 3592/MUM/2025

AI Insights

The case involves Jeevan Javerchand Rathod, who acted as a business correspondent for various companies, collecting cash from customers and depositing it into these companies' accounts. The Income Tax Department added undisclosed and unexplained income to Rathod's assessment for the year 2013-14, which he contested. The Tribunal's decision focused on the need for further factual verification regarding the nature of the payments and the legitimacy of the income reported by Rathod.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711301 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2013-2014
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BHAGIRATH RAMAWAT
• Assessee Lawyers: HARIDAS BHAT
• Keywords: Additional evidence; Unexplained cash credit; Source of fund; Liquidation; FORM 26AS
• Section: 271(1)(c); 68; 133(6)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “K (SMC)” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAHUL CHAUDHARY (JUDICIAL MEMBER) ITA No. 3592/MUM/2025 Assessment Year: 2013-14 Jeevan Javerchand Rathod, 8 Dinbai CHS, Caves road Jogeshwari East, Mumbai-400060. Vs. ITO-31(2)(1), Bandra Income-tax Office, Mumbai-400051. PAN NO. AGFPR 1241 M Appellant Respondent Assessee by : Mr. Haridas Bhat Revenue by : Mr. Bhagirath Ramawat, Sr. DR Date of Hearing : 15/07/2025 Date of pronouncement : 22/07/2025 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 30.03.2025 passed by the Ld. Additional/Joint Commissioner of Income-tax (Appeals)-2, Noida [hereinafter shall be referred as “Ld. CIT(A)”] for assessment year 2013-14, raising following grounds: 1. Your appellant is aggrieved by the addition of undisclosed income of Rs 86,539/- & pray yourself to delete the additions. 2. Your appellant is aggrieved by the addition of unexplained income of Rs. 6,66,475/- additions are on the adhoc, estimated Printed from counselvise.com basis in spite of details provided. Additional evidence enclosed & pray yourself to delete the additions 3. Your appellant is aggrieved by the order passed u/s 250 of Income Tax Ac time limit & pray your self to Reject/ dismiss / cancel the CIT appeals 2. Before us, the Ld. Counsel for the assessee submitted that the ground No. 3 was not pressed by the assessee and therefore, accordingly, same is dismissed as infructuous. 3. The appeal primarily rendered by the Assessing Officer and the additions to the income of the appellant/assessee made under the Income \"the Act\"). The appellant correspondent/commission agent for entities includi Ltd., Suvidha Infoserve Pvt. Ltd., and MOS Utility Pvt. Ltd. in that capacity, collected cash from customers and facilitated its deposit into the accounts of the respective companies, receiving commission income in return. 3.1 The appellant/assessee assessment year under consideration on 25.04.2014, declaring total income of ₹3,07,390/ statutory notices under the Act Upon completion of assessment on 28.03.2016, the Assessing Officer made two additions: Jeevan Javerchand Rathod ITA No. 3592/MUM/2025 basis in spite of details provided. Additional evidence enclosed & pray yourself to delete the additions 3. Your appellant is aggrieved by the order passed u/s 250 of Income Tax Act 1961, after lapse of Nine years, which is beyond time limit & pray your self to Reject/ dismiss / cancel the order. Before us, the Ld. Counsel for the assessee submitted that the ground No. 3 was not pressed by the assessee and therefore, same is dismissed as infructuous. The appeal primarily arise out of the concurrent findings rendered by the Assessing Officer and the ld CIT(A) additions to the income of the appellant/assessee— made under the Income-tax Act, 1961 (hereinafter referred to as \"the Act\"). The appellant/assessee was engaged as a business correspondent/commission agent for entities includi Ltd., Suvidha Infoserve Pvt. Ltd., and MOS Utility Pvt. Ltd. in that capacity, collected cash from customers and facilitated its deposit into the accounts of the respective companies, receiving commission income in return. /assessee filed his return of income for the assessment year under consideration on 25.04.2014, declaring total 3,07,390/-. The return was selected for scrutiny, and under the Act were issued and complied with. etion of assessment on 28.03.2016, the Assessing Officer made two additions: Jeevan Javerchand Rathod 2 ITA No. 3592/MUM/2025 basis in spite of details provided. Additional evidence enclosed & 3. Your appellant is aggrieved by the order passed u/s 250 of t 1961, after lapse of Nine years, which is beyond time limit & pray your self to Reject/ dismiss / cancel the Before us, the Ld. Counsel for the assessee submitted that the ground No. 3 was not pressed by the assessee and therefore, arise out of the concurrent findings ld CIT(A) confirming two —an individual— tax Act, 1961 (hereinafter referred to as was engaged as a business correspondent/commission agent for entities including Axis Bank Ltd., Suvidha Infoserve Pvt. Ltd., and MOS Utility Pvt. Ltd. etc, and in that capacity, collected cash from customers and facilitated its deposit into the accounts of the respective companies, receiving filed his return of income for the assessment year under consideration on 25.04.2014, declaring total . The return was selected for scrutiny, and were issued and complied with. etion of assessment on 28.03.2016, the Assessing Printed from counselvise.com (i) ₹86,539/-, received allegedly as a final settlement from M/s PAN India Network Ltd.; and (ii) ₹6,66,475/-, estimated to be commission income @5% on total cash deposits of bank account. 3.2 Both additions were sustained by the CIT(A). Aggrieved, the assessee carried the matter in appeal grounds as reproduced above. 4. The ground No. Assessing Officer in respect of sum of Rs.86,539/ allegedly paid by a company namely PAN India Networks Ltd. to the assessee as full and final settlement 4.1 The facts in brief qua the issue in dispute are course of assessment proceedings, the Assessing Officer issued notice under Section 133(6) of the Act to PAN India Network Ltd. to verify the assessee’s transactions. The said entity responded, confirming that a sum of settlement to a retailer account maintained in the name of M/s Decent Electronics, which was linked to the PAN of the assessee. On the strength of this confirmation, the Assessing Officer treated the said amount as undisclosed income and Jeevan Javerchand Rathod ITA No. 3592/MUM/2025 , received allegedly as a final settlement from M/s PAN India Network Ltd.; and , estimated to be commission income @5% on total cash deposits of ₹1,33,29,500/- made in the assessee’s Both additions were sustained by the CIT(A). Aggrieved, the assessee carried the matter in appeal before us, by way of raising grounds as reproduced above. The ground No. 1 of the appeal relates to addition made by the Assessing Officer in respect of sum of Rs.86,539/ by a company namely PAN India Networks Ltd. to the assessee as full and final settlement of agency business The facts in brief qua the issue in dispute are course of assessment proceedings, the Assessing Officer issued notice under Section 133(6) of the Act to PAN India Network Ltd. to verify the assessee’s transactions. The said entity responded, confirming that a sum of ₹86,539/- was paid as settlement to a retailer account maintained in the name of M/s Decent Electronics, which was linked to the PAN of the assessee. On the strength of this confirmation, the Assessing Officer treated the said amount as undisclosed income and made the addition. Jeevan Javerchand Rathod 3 ITA No. 3592/MUM/2025 , received allegedly as a final settlement from M/s , estimated to be commission income @5% on made in the assessee’s Both additions were sustained by the CIT(A). Aggrieved, the before us, by way of raising ition made by the Assessing Officer in respect of sum of Rs.86,539/- which was by a company namely PAN India Networks Ltd. to the of agency business. The facts in brief qua the issue in dispute are that during the course of assessment proceedings, the Assessing Officer issued notice under Section 133(6) of the Act to PAN India Network Ltd. to verify the assessee’s transactions. The said entity responded, a full and final settlement to a retailer account maintained in the name of M/s Decent Electronics, which was linked to the PAN of the assessee. On the strength of this confirmation, the Assessing Officer treated made the addition. Printed from counselvise.com 4.2 The assessee contended that he was not the proprietor of M/s Decent Electronics, nor had he received such amount in his bank account. It was also submitted that the remitting entity (PAN India Network Ltd.) was under liquidation, and obtain further confirmation. Reference was made to Form 26AS, which showed no credit of the said amount. These submissions, however, were rejected by the CIT(A), primarily on the ground that the assessee had not furnished any docume dislodge the third-party confirmation. CIT(A) is reproduced as under “4.1.3 Analysis and Rejection of the Appellant’s Arguments a) Fallure to Provide Evidence Against PAN India Network Limited's Confirmation The appellant's mere denial of ownership of M/s. Decent Electronics does not hold weight in the absence of any documentary proof. The AO's reliance on a third confirmation from PAN India Network Limited is a valid exercise u/s 133(6) of the Income empowers the AO to seek independent confirmation. The company categorically confirmed the existence of M/s. Decent Electronics with the appellant's PAN, which was sufficient ground to conclude that the appellant had received the amount. b) No Alternative Evidence Provided The appellant failed to provide any documents such as correspondence, legal agreements, or affidavits contradicting the third-party confirmation. He did not provide any explanation, nor did he submit any alternative plea agrument. c) Rebuttal to the Claim that Rs. 86,539/ Credited to the Bank Account Jeevan Javerchand Rathod ITA No. 3592/MUM/2025 The assessee contended that he was not the proprietor of M/s Decent Electronics, nor had he received such amount in his bank account. It was also submitted that the remitting entity (PAN India Network Ltd.) was under liquidation, and it was not possible to obtain further confirmation. Reference was made to Form 26AS, which showed no credit of the said amount. These submissions, however, were rejected by the CIT(A), primarily on the ground that the assessee had not furnished any documentary evidence to party confirmation. The relevant finding of ld CIT(A) is reproduced as under: “4.1.3 Analysis and Rejection of the Appellant’s a) Fallure to Provide Evidence Against PAN India Network Limited's Confirmation The appellant's mere denial of ownership of M/s. Decent Electronics does not hold weight in the absence of any documentary proof. The AO's reliance on a third confirmation from PAN India Network Limited is a valid exercise u/s 133(6) of the Income-tax Act, 1961, which empowers the AO to seek independent confirmation. The company categorically confirmed the existence of M/s. Decent Electronics with the appellant's PAN, which was sufficient ground to conclude that the appellant had received b) No Alternative Evidence Provided The appellant failed to provide any documents such as correspondence, legal agreements, or affidavits contradicting party confirmation. He did not provide any explanation, nor did he submit any alternative plea c) Rebuttal to the Claim that Rs. 86,539/- Was Not Credited to the Bank Account Jeevan Javerchand Rathod 4 ITA No. 3592/MUM/2025 The assessee contended that he was not the proprietor of M/s Decent Electronics, nor had he received such amount in his bank account. It was also submitted that the remitting entity (PAN India it was not possible to obtain further confirmation. Reference was made to Form 26AS, which showed no credit of the said amount. These submissions, however, were rejected by the CIT(A), primarily on the ground that ntary evidence to The relevant finding of ld “4.1.3 Analysis and Rejection of the Appellant’s a) Fallure to Provide Evidence Against PAN India The appellant's mere denial of ownership of M/s. Decent Electronics does not hold weight in the absence of any documentary proof. The AO's reliance on a third-party confirmation from PAN India Network Limited is a valid x Act, 1961, which empowers the AO to seek independent confirmation. The company categorically confirmed the existence of M/s. Decent Electronics with the appellant's PAN, which was sufficient ground to conclude that the appellant had received The appellant failed to provide any documents such as correspondence, legal agreements, or affidavits contradicting party confirmation. He did not provide any explanation, nor did he submit any alternative plea or Was Not Printed from counselvise.com The appellant's argument that the amount was not credited to his bank account is irrelevant unless he demonstrates that he never received the amount in any other transactions. The AO, relying on the ledger copies and transaction records provided by PAN India Network Limited, rightly concluded that the appellant had received the amount. d) AO's Rellance on Sections 133(6) and 271(1)(c) The AO was just party records, which the appellant failed to disprove. Since the appellant did not disclose the amount voluntarily, penalty proceedings /s 271(1)(c) for concealment righty initiated. 5. We have perused the material on record containing pages 1 to 10 Network Ltd. may prima facie suggest linkage of the impugned payment with the assessee’s PAN, it is a settled principle that no addition can be sustained merely on account of a third unless the same is corroborated by receipt in the hands of the assessee. In the absence of any proof of actual credit to the assessee—whether in cash or through bank be upheld without further verification. 5.1 We are of the view that the matter requires further factual ascertainment, particularly: (i) whether the payment of was, in fact, received by the assessee; (ii) the nature and ownership of M/s Decent Electronics; reflects transmission of such funds to the assessee. Accordingly, this ground is restored to the file of the Assessing Officer, who shall conduct a thorough verification, including inquiries with the Jeevan Javerchand Rathod ITA No. 3592/MUM/2025 The appellant's argument that the amount was not credited to his bank account is irrelevant unless he demonstrates that he never received the amount in any other form or other transactions. The AO, relying on the ledger copies and transaction records provided by PAN India Network Limited, rightly concluded that the appellant had received the amount. d) AO's Rellance on Sections 133(6) and 271(1)(c) The AO was justified in making the addition based on third party records, which the appellant failed to disprove. Since the appellant did not disclose the amount voluntarily, penalty proceedings /s 271(1)(c) for concealment of income were righty initiated.” perused the material on record including the paper book containing pages 1 to 10. While the confirmation from PAN India Network Ltd. may prima facie suggest linkage of the impugned payment with the assessee’s PAN, it is a settled principle that no can be sustained merely on account of a third unless the same is corroborated by receipt in the hands of the assessee. In the absence of any proof of actual credit to the whether in cash or through bank—the addition cannot ithout further verification. We are of the view that the matter requires further factual ascertainment, particularly: (i) whether the payment of was, in fact, received by the assessee; (ii) the nature and ownership of M/s Decent Electronics; and (iii) whether any banking channel reflects transmission of such funds to the assessee. Accordingly, this ground is restored to the file of the Assessing Officer, who shall conduct a thorough verification, including inquiries with the Jeevan Javerchand Rathod 5 ITA No. 3592/MUM/2025 The appellant's argument that the amount was not credited to his bank account is irrelevant unless he demonstrates that form or other transactions. The AO, relying on the ledger copies and transaction records provided by PAN India Network Limited, rightly concluded that the appellant had received the amount. ified in making the addition based on third- party records, which the appellant failed to disprove. Since the appellant did not disclose the amount voluntarily, penalty income were including the paper book . While the confirmation from PAN India Network Ltd. may prima facie suggest linkage of the impugned payment with the assessee’s PAN, it is a settled principle that no can be sustained merely on account of a third-party entry unless the same is corroborated by receipt in the hands of the assessee. In the absence of any proof of actual credit to the the addition cannot We are of the view that the matter requires further factual ascertainment, particularly: (i) whether the payment of ₹86,539/- was, in fact, received by the assessee; (ii) the nature and ownership and (iii) whether any banking channel reflects transmission of such funds to the assessee. Accordingly, this ground is restored to the file of the Assessing Officer, who shall conduct a thorough verification, including inquiries with the Printed from counselvise.com bankers of PAN India Network Ltd., to ascertain to whom and how the payment was made, and whether M/s Decent Electronics was at any time a proprietary concern of the assessee or otherwise connected to him. The Assessing Officer shall then decide the issue afresh in accordance with law. assessee is accordingly allowed for statistical purposes. 6. The second addition concerns cash deposits amounting to ₹1,33,29,500/- made into the assessee’s savings bank account, claimed to be in respect o aforementioned companies. It is the assessee’s case that these amounts were subsequently withdrawn and transferred to the respective companies, and that he was acting merely as a business correspondent. But on verification by 133(6) of the Act, the Assessing Officer observed that companies for whom cash was collected and claimed to an authorised commission agent, Suvidha Infoserve Pvt. Ltd. and FINO Fintech Fiundation (FFF) did not respond to t The PAN India network replied that they were into online gaming business and M/s Decent Electronics ( having PAN of assess) was their retailer agent and agency was cancelled. From the agreement with MOS Utility Pvt. Ltd. by the assessee, it was the assessee did not authorize him to collect and deposit cash in his personal bank account. In the absence of detailed customer Jeevan Javerchand Rathod ITA No. 3592/MUM/2025 ia Network Ltd., to ascertain to whom and how the payment was made, and whether M/s Decent Electronics was at any time a proprietary concern of the assessee or otherwise connected to him. The Assessing Officer shall then decide the issue ce with law.The ground No. 1 of the appeal of the assessee is accordingly allowed for statistical purposes. The second addition concerns cash deposits amounting to made into the assessee’s savings bank account, claimed to be in respect of collections on behalf of the aforementioned companies. It is the assessee’s case that these amounts were subsequently withdrawn and transferred to the respective companies, and that he was acting merely as a business But on verification by the Assessing Officer u/s 133(6) of the Act, the Assessing Officer observed that companies for whom cash was collected and claimed to an authorised commission agent, Suvidha Infoserve Pvt. Ltd. and FINO Fintech Fiundation (FFF) did not respond to the Assessing Officer. The PAN India network replied that they were into online gaming business and M/s Decent Electronics ( having PAN of assess) was their retailer agent and agency was cancelled. From the agreement MOS Utility Pvt. Ltd. and FINO Fintech Foundation provided was observed that the agreements produced by the assessee did not authorize him to collect and deposit cash in his personal bank account. In the absence of detailed customer Jeevan Javerchand Rathod 6 ITA No. 3592/MUM/2025 ia Network Ltd., to ascertain to whom and how the payment was made, and whether M/s Decent Electronics was at any time a proprietary concern of the assessee or otherwise connected to him. The Assessing Officer shall then decide the issue The ground No. 1 of the appeal of the assessee is accordingly allowed for statistical purposes. The second addition concerns cash deposits amounting to made into the assessee’s savings bank account, f collections on behalf of the aforementioned companies. It is the assessee’s case that these amounts were subsequently withdrawn and transferred to the respective companies, and that he was acting merely as a business the Assessing Officer u/s 133(6) of the Act, the Assessing Officer observed that out of companies for whom cash was collected and claimed to an authorised commission agent, Suvidha Infoserve Pvt. Ltd. and FINO he Assessing Officer. The PAN India network replied that they were into online gaming business and M/s Decent Electronics ( having PAN of assess) was their retailer agent and agency was cancelled. From the agreement ntech Foundation provided the agreements produced by the assessee did not authorize him to collect and deposit cash in his personal bank account. In the absence of detailed customer-wise or Printed from counselvise.com transaction-wise reconciliat of total deposits as unexplained income under Section 68 of the Act. 6.1 The ld CIT(A) affirmed the addition, observing that the assessee had not produced customer details, transaction logs, or other contemporaneous records to substantiate the claim that the deposits were entirely on behalf of third parties. Further, the CIT(A) found that the confirmation letter relied upon by the assessee from MOS Utility Pvt. Ltd. lacked specific transaction details and was not filed at the assessment stage. after considering the submission of the assessee rejected the contention observing as under: “4.2.3 Analysts and Rejection of Arguments a) Failure to Provide Evidence Supporting Cash Deposits as Third-Party Transactions The appellant claimed that all, cash deposits were received from customers for onward transfer to their bank However he failed customers, such as names, records, or bank slips The AO had explicitly asked, for customer details, a numbers, and specific cash assessment. The appellant's refusal to furnish these details weakens his claim and raises doubts regarding the genuineness of these deposits legitimate, the appellant should have been able to provide a ledger or customer logs, but he failed to do so. b) Contradiction in the Assessee's Business Model While the appellant claimed to be acting as a business corresponden Jeevan Javerchand Rathod ITA No. 3592/MUM/2025 wise reconciliation, the Assessing Officer estimated 5% of total deposits as unexplained income under Section 68 of the Act. CIT(A) affirmed the addition, observing that the assessee had not produced customer details, transaction logs, or other contemporaneous records to substantiate the claim that the deposits were entirely on behalf of third parties. Further, the nd that the confirmation letter relied upon by the assessee from MOS Utility Pvt. Ltd. lacked specific transaction details and was not filed at the assessment stage. after considering the submission of the assessee rejected the serving as under: 2.3 Analysts and Rejection of the Appellant’s a) Failure to Provide Evidence Supporting Cash Deposits Party Transactions The appellant claimed that all, cash deposits were received from customers for onward transfer to their bank accounts he failed to provide even basic details of these customers, such as names, account numbers, transaction , or bank slips The AO had explicitly asked, for customer details, a , and specific cash transaction logs during the assessment. The appellant's refusal to furnish these details weakens his claim and raises doubts regarding the genuineness of these deposits. If these transactions were legitimate, the appellant should have been able to provide a ledger or customer logs, but he failed to do so. b) Contradiction in the Assessee's Business Model While the appellant claimed to be acting as a business correspondent, the agreements with the concerned companies Jeevan Javerchand Rathod 7 ITA No. 3592/MUM/2025 ion, the Assessing Officer estimated 5% of total deposits as unexplained income under Section 68 of the Act. CIT(A) affirmed the addition, observing that the assessee had not produced customer details, transaction logs, or other contemporaneous records to substantiate the claim that the deposits were entirely on behalf of third parties. Further, the ld nd that the confirmation letter relied upon by the assessee from MOS Utility Pvt. Ltd. lacked specific transaction details and was not filed at the assessment stage. the Ld. CIT(A) after considering the submission of the assessee rejected the Appellant’s a) Failure to Provide Evidence Supporting Cash Deposits The appellant claimed that all, cash deposits were received accounts, to provide even basic details of these transaction The AO had explicitly asked, for customer details, a account transaction logs during the assessment. The appellant's refusal to furnish these details weakens his claim and raises doubts regarding the . If these transactions were legitimate, the appellant should have been able to provide a b) Contradiction in the Assessee's Business Model While the appellant claimed to be acting as a business t, the agreements with the concerned companies Printed from counselvise.com did not support this claim. The AO correctly pointed out that the agreements did not authorize the appellant to collect cash from customers and deposit it into their accounts. The appellant failed to provide a evidence (agreements, correspondence, or business logs) to counter this finding. c) Rebuttal to the Claim that the AO Did Not Seek Specific Cash Deposit Details The appellant's claim that the AO never asked for specific details is incorrect. The AO issued multiple notices u/s 133(6) and a show-cause letter on 02.03.2016, specifically asking the appellant to provide transaction details. The appellant did not comply with this requirement. Additionally, the AO recorded the appellant' 131, where he was again asked to provide supporting details. His response remained vague and unsupported by evidence. d) MOS Utility Pvt. Ltd.'s Confirmation Letter Is Not Sufficient to Prove the Legitimacy of Cash Deposits The appellant ar confirmation letter validating his transactions. However, this letter was not submitted during the assessment, which did not contain any specific transaction details, deposit records, or confirmations of the a that the appellant was authorized to collect cash on behalf of customers. As such, the confirmation letter does not hold sufficient evidentiary value to counter the AO's findings. e) The 5% Addition Was Reasonable and The appellant argued that the addition of 5% as unexplained income was arbitrary. However, the AO did not make an arbitrary estimation. Instead, he: 1. Considered the total deposits of Rs. 1,33,29,500/ 2. Factored in part of the deposits was 3. Determined that at least 5% of the total deposits were unexplained, in the absence of supporting docume Jeevan Javerchand Rathod ITA No. 3592/MUM/2025 did not support this claim. The AO correctly pointed out that the agreements did not authorize the appellant to collect cash from customers and deposit it into their accounts. The appellant failed to provide any additional documentary evidence (agreements, correspondence, or business logs) to counter this finding. c) Rebuttal to the Claim that the AO Did Not Seek Specific Cash Deposit Details The appellant's claim that the AO never asked for specific s incorrect. The AO issued multiple notices u/s 133(6) cause letter on 02.03.2016, specifically asking the appellant to provide transaction details. The appellant did not comply with this requirement. Additionally, the AO recorded the appellant's statement u/s 131, where he was again asked to provide supporting details. His response remained vague and unsupported by evidence. d) MOS Utility Pvt. Ltd.'s Confirmation Letter Is Not Sufficient to Prove the Legitimacy of Cash Deposits The appellant argued that MOS Utility Pvt. Ltd. had provided a confirmation letter validating his transactions. However, this letter was not submitted during the assessment, which did not contain any specific transaction details, deposit records, or confirmations of the amounts deposited. Also did not confirm that the appellant was authorized to collect cash on behalf of customers. As such, the confirmation letter does not hold sufficient evidentiary value to counter the AO's findings. e) The 5% Addition Was Reasonable and Based on Facts The appellant argued that the addition of 5% as unexplained income was arbitrary. However, the AO did not make an arbitrary estimation. Instead, he: 1. Considered the total deposits of Rs. 1,33,29,500/ 2. Factored in corresponding withdrawals indicating part of the deposits was legitimate. 3. Determined that at least 5% of the total deposits were unexplained, in the absence of supporting documentation. Jeevan Javerchand Rathod 8 ITA No. 3592/MUM/2025 did not support this claim. The AO correctly pointed out that the agreements did not authorize the appellant to collect cash from customers and deposit it into their accounts. The ny additional documentary evidence (agreements, correspondence, or business logs) to c) Rebuttal to the Claim that the AO Did Not Seek The appellant's claim that the AO never asked for specific s incorrect. The AO issued multiple notices u/s 133(6) cause letter on 02.03.2016, specifically asking the appellant to provide transaction details. The appellant did not s statement u/s 131, where he was again asked to provide supporting details. His response remained vague and unsupported by evidence. d) MOS Utility Pvt. Ltd.'s Confirmation Letter Is Not Sufficient to Prove the Legitimacy of Cash Deposits gued that MOS Utility Pvt. Ltd. had provided a confirmation letter validating his transactions. However, this letter was not submitted during the assessment, which did not contain any specific transaction details, deposit records, or mounts deposited. Also did not confirm that the appellant was authorized to collect cash on behalf of customers. As such, the confirmation letter does not hold sufficient evidentiary value to counter the AO's findings. Based on Facts The appellant argued that the addition of 5% as unexplained income was arbitrary. However, the AO did not make an indicating that a 3. Determined that at least 5% of the total deposits were ntation. Printed from counselvise.com Since the appellant failed to provide evidence to establish the exact source of reasonable proportion as unexplained cash 6.2 Before us, the assessee submitted that he had acted solely as a facilitator for the companies concerned and was paid a fixed commission. It was conte transfers to company accounts were ignored and that the 5% estimation was arbitrary. 7. We have heard rival submissions of the parties and perused the relevant materials on record. The Assessing Officer though has accepted the modus operendi of the assessee withdrawing the same for further deposit to the respective companies, b whether the amount of Rs.1,33,29,500/ bank account was already considered while working out the commission in respect of deposits collected from customers pertaining to the three companies. demonstrated that the total deposits of accounted for while reconciliation was provided by the assessee before the lower authorities. In the absence of reconciliation, the estimation of unexplained income cannot be said to be wholly without basis. Therefore, in the facts and ci interest of substantial justice matter also back to the file of the Assessing Officer with the Jeevan Javerchand Rathod ITA No. 3592/MUM/2025 Since the appellant failed to provide evidence to establish the exact source of funds, the AO was justified in estimating a reasonable proportion as unexplained cash credits u/s Before us, the assessee submitted that he had acted solely as a facilitator for the companies concerned and was paid a fixed commission. It was contended that corresponding withdrawals and transfers to company accounts were ignored and that the 5% estimation was arbitrary. We have heard rival submissions of the parties and perused the relevant materials on record. The Assessing Officer though has cepted the modus operendi of the assessee of collecting cash and withdrawing the same for further deposit to the respective companies, but the assessee was required to reconcile whether the amount of Rs.1,33,29,500/- deposited in his saving k account was already considered while working out the commission in respect of deposits collected from customers pertaining to the three companies. The assessee has not demonstrated that the total deposits of ₹1,33,29,500/ accounted for while computing commission income. reconciliation was provided by the assessee before the lower In the absence of reconciliation, the estimation of unexplained income cannot be said to be wholly without basis. Therefore, in the facts and circumstances of the case interest of substantial justice, we feel it appropriate to restore this matter also back to the file of the Assessing Officer with the Jeevan Javerchand Rathod 9 ITA No. 3592/MUM/2025 Since the appellant failed to provide evidence to establish the funds, the AO was justified in estimating a u/s 68.” Before us, the assessee submitted that he had acted solely as a facilitator for the companies concerned and was paid a fixed nded that corresponding withdrawals and transfers to company accounts were ignored and that the 5% We have heard rival submissions of the parties and perused the relevant materials on record. The Assessing Officer though has collecting cash and withdrawing the same for further deposit to the accounts of ut the assessee was required to reconcile deposited in his saving k account was already considered while working out the commission in respect of deposits collected from customers The assessee has not 1,33,29,500/- were fully computing commission income. No such reconciliation was provided by the assessee before the lower In the absence of reconciliation, the estimation of unexplained income cannot be said to be wholly without basis. rcumstances of the case and in the , we feel it appropriate to restore this matter also back to the file of the Assessing Officer with the Printed from counselvise.com direction to the assessee for filing of Rs.1,33,29,500/- been considered while working out the commission received from relevant companies. reconciliation showing how the cash deposits relate to spe customer transactions on behalf of the named companies and whether such amounts were already included while computing commission income. The Assessing Officer shall verify the reconciliation and pass a reasoned order thereafter. 2 of the appeal of the assessee is also accordingly allowed for statistical purposes. 8. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on Sd/ (RAHUL CHAUDHARY JUDICIAL MEMBER Mumbai; Dated: 22/07/2025 Rahul Sharma, Sr. P.S. Jeevan Javerchand Rathod ITA No. 3592/MUM/2025 the assessee for filing reconciliation as how the amount deposited in the bank account has already been considered while working out the commission received from companies. The assessee shall furnish a detailed reconciliation showing how the cash deposits relate to spe customer transactions on behalf of the named companies and whether such amounts were already included while computing commission income. The Assessing Officer shall verify the reconciliation and pass a reasoned order thereafter. he appeal of the assessee is also accordingly allowed for In the result, the appeal of the assessee is allowed for statistical purposes. nounced in the open Court on 22/07/2025. Sd/- Sd/ RAHUL CHAUDHARY) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Jeevan Javerchand Rathod 10 ITA No. 3592/MUM/2025 how the amount deposited in the bank account has already been considered while working out the commission received from The assessee shall furnish a detailed reconciliation showing how the cash deposits relate to specific customer transactions on behalf of the named companies and whether such amounts were already included while computing commission income. The Assessing Officer shall verify the reconciliation and pass a reasoned order thereafter. The ground No. he appeal of the assessee is also accordingly allowed for In the result, the appeal of the assessee is allowed for /07/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER Printed from counselvise.com Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Jeevan Javerchand Rathod ITA No. 3592/MUM/2025 Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Jeevan Javerchand Rathod 11 ITA No. 3592/MUM/2025 BY ORDER, (Assistant Registrar) ITAT, Mumbai Printed from counselvise.com "