M/S SHIVAM ENTERPRISE,SURAT V. ITO, WARD1(1)(1), SURAT

ITA 937/SRT/2024

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M/s. Shivam Enterprise, a partnership firm acting as a Business Correspondent Agent for Airtel Payments Bank Ltd., was assessed for unexplained cash deposits totaling Rs. 1,70,53,900 in the financial year 2016-17. The Assessing Officer issued a notice under Section 148 of the Income-tax Act, 1961, and upon non-compliance, completed the assessment ex parte under Section 144 r.w.s. 147, treating the entire amount as unexplained money under Section 69A. The assessee appealed to the CIT(A), which upheld the addition. Subsequently, the assessee appealed to the Tribunal, presenting documents and arguments that the deposits were customer funds for transfer services, not the assessee's income. The Tribunal, after considering the submissions and evidence, ruled in favor of the assessee, allowing the appeal and reversing the addition made by the Assessing Officer.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 847398 (ITAT-SURAT)
• Duration Of Justice: 1 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Surat
• Assessment Year: 2017-2018
• Appeal Filed On: 04-09-2024
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income
• Section: 147; 148; 144

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. 937/SRT/2024 (Assessment Year: 2017-18) M/s. Shivam Enterprise, B-21, Swastik Society, Navagam, Kamrej, Surat-395006 [PAN : ADBFS 9876 L] Vs. Income Tax Officer, Ward 1(1)(1), Surat (Appellant) .. (Respondent) Appellant represented by : Shri Sapnesh Sheth, Advocate Respondent represented by: Shri Ajay Uke, Sr DR Date of Hearing 23.01.2026 Date of Pronouncement 27.03.2026 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- Delay condoned. This appeal has been filed by the assessee against the order dated 05.07.2024 passed by the Ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as the “Ld. CIT(A)” for short), under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as the “Act” for short) for Assessment Year 2017-18. 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 Commissioner of Income Tax (Appeals), NFAC has erred in confirming the action of assessing officer in passing ex-parte order u/s 144 of the I.T. Act, 1961 without providing reasonable opportunity of hearing to assessee. 2. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals), NFAC has erred in confirming the action of assessing officer in issuing notice u/s 148 of the I.T. Act, 1961. 3. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals), NFAC has erred in Printed from counselvise.com ITA No. 937/SRT/2024 Shivam Enterprise Vs. ITO Asst. Year : 2017-18 - 2– confirming the action of assessing officer in making addition of Rs. 1,70,53,900/- as unexplained money u/s 69A of the I.T. Act, 1961.” 3. The briefly stated facts of the case are that the assessee is a partnership firm engaged in the business of money transfer services as a Business Correspondent Agent of Airtel Payments Bank Ltd. The assessee did not file its return of income for A.Y. 2017–18. On the basis of information available with the Department, the Assessing Officer observed that during F.Y. 2016–17 the assessee had deposited cash/credits amounting to Rs. 1,65,02,900/- in its ICICI Bank account and Rs. 5,51,000/- in its SBI account, aggregating to Rs. 1,70,53,900/-. Accordingly, notice u/s 148 of the Act dated 30.03.2021 was issued. The assessee did not comply with the notice nor filed return of income. Consequently, the Assessing Officer completed the assessment u/s 144 r.w.s. 147 of the Act and treated the entire sum of Rs. 1,70,53,900/- as unexplained money u/s 69A of the Act. 4. Aggrieved by the order of the Assessing Officer, the assessee filed an appeal before the Ld. CIT(A) who affirmed the addition made by the Assessing Officer. 5. Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal. 6. We have heard the rival submissions of both the parties and perused the material available on record. Ground No. 3 – Addition u/s 69A of the Act of Rs. 1,70,53,900/- 7. The assessee deposited cash/credits aggregating to Rs. 1,70,53,900/- in its ICICI Bank and SBI accounts during F.Y. 2016–17. No return of income was filed. In assessment proceedings, the assessee failed to respond to notices and the assessment was completed ex parte u/s 144 r.w.s. 147. The entire deposits were treated as unexplained money u/s 69A of the Act. Printed from counselvise.com ITA No. 937/SRT/2024 Shivam Enterprise Vs. ITO Asst. Year : 2017-18 - 3– 8. Before the Ld. CIT(A), the assessee claimed that it was a Business Correspondent Agent of Airtel Payments Bank Ltd. and that the deposits represented customers’ money received for transfer services. Certain bank statements and cash receipt bills were filed. In remand report, the Assessing Officer reported that the bills lacked proper details, most parties’ PAN and addresses were not furnished, and genuineness was not established. The addition was confirmed. 9. Before us, the Ld. AR submitted that the deposits were the amounts received from customers and immediately transferred to “Airtel E Commerce Pvt.” Only commission income accrued to the assessee. The Ld. AR also submitted that the Assessing Officer ignored corresponding debit entries and argued that, at the most, only commission income could be taxed. 10. The Ld. DR, on the other hand, contended that the assessee failed to discharge the onus u/s 69A of the Act. He submitted that no books of account, confirmations, or complete identity details of customers were furnished. The Ld. DR submitted that the addition made by the Assessing Officer was rightly sustained by the Ld. CIT(A). 11. Having heard the rival contentions and perused the material available on record, we find that the undisputed fact is that the assessee deposited cash/credits aggregating to Rs. 1,70,53,900/- in its bank accounts during the year under consideration and no return of income was filed. The explanation of the assessee is that it was acting as a Business Correspondent Agent of Airtel Payments Bank Ltd. and that the cash deposits represented amounts received from customers for onward transfer, on which only commission income accrued to it. Before us, the Ld. AR submitted that the assessee has placed on record complete set of documents in support of its contention that the impugned cash Printed from counselvise.com ITA No. 937/SRT/2024 Shivam Enterprise Vs. ITO Asst. Year : 2017-18 - 4– deposits represented business receipts in the course of agency activity. The following documents have been produced before the Tribunal (i) written submission in response to the remand report dated 09.05.2024; (ii) remand report of the Assessing Officer dated 04.04.2024; (iii) written submission filed before the Ld. CIT(A) dated 19.09.2022; (iv) Certificate issued by Airtel Payments Bank Ltd. authorizing the assessee to act as Business Correspondent Agent; (v) bank statement of SBI for F.Y. 2016–17; (vi) bank statement of ICICI Bank for F.Y. 2016–17 and (vii) a detailed chart showing particulars of amounts received from various parties for transferring funds. Since the fact of the assessee being an agent of Airtel E-payments, collecting the amounts from various clients and the amounts thus received have been transferred to Airtel E-Commerce Pvt Ltd as per the record & the bank statement, we hold that assessee is not the owner of the money, acting only as a Business Correspondent Agent (BCA) of the Bank and hence, no addition in the hands of the assessee is called for. 12. Since the appeal has been adjudicated on merits, any adjudication on ground Nos. 1 & 2 raised by the assessee regarding the reopening of the assessment will be academic; hence, not resorted to. 13. In the result, the appeal of the assessee is allowed. The order is pronounced in the open Court on 27.03.2026 Sd/- Sd/- (SUCHITRA KAMBLE) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad; Dated 27/03/2026 btk Printed from counselvise.com ITA No. 937/SRT/2024 Shivam Enterprise Vs. ITO Asst. Year : 2017-18 - 5– आदेश की \u0007ितिलिप अ ेिषत/Copy of the Order forwarded to : 1. अपीलाथ\u0007 / The Appellant 2. \b थ\u0007 / The Respondent. 3. संबंिधत आयकर आयु\u0015 / Concerned CIT 4. आयकर आयु\u0015 ) अपील ( / The CIT(A)- 5. िवभागीय \bितिनिध , अिधकरण अपीलीय आयकर , /DR,ITAT, Surat, 6. गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, TRUE COPY सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण ITAT, Surat 1. Date of dictation …..…23.03.2026….….. 2. Date on which the typed draft is placed before the Dictating Member … …...24.03.2026………… 3. Other Member……….25..03.2026 4. Date on which the approved draft comes to the Sr.P.S./P.S …. ….26.03.2026…………. 5. Date on which the fair order is placed before the Dictating Member for pronouncement ........27.03.2026… 6. Date on which the fair order comes back to the Sr.P.S./P.S ……....27.03.2026…..…………. 7. Date on which the file goes to the Bench Clerk ……...27.03.2026.….…. 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 "