SIMPLY MONEY SERVICES PRIVATE LIMITED,DELHI V. ASSESSING AUTHORITY WARD 23(2), DELHI, DELHI

ITA 3501/DEL/2024

AI Insights

The case involves Simply Money Services Pvt Ltd, which appealed against the order of the CIT(A) that upheld the addition of Rs. 2,47,71,845 to the assessee's income for the Assessment Year 2017-18. This amount was received from M/s Vacation To Go Pvt Ltd for the issuance of Forex Cards, which the Assessing Officer treated as unexplained credits under section 68 of the Income-tax Act, 1961. The Tribunal found that the CIT(A) had not adequately addressed the facts and the commercial nature of the transactions in his decision, leading to the remand of the case for a thorough re-examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 784705 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2017-2018
• Appeal Filed On: 30-07-2024
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANISH GUPTA
• Assessee Lawyers: SOHAIL
• Keywords: Business income; Unexplained cash credit; Principle of natural justice
• Section: 143(3); 68; 133(6)

Judgement Text

"Page 1 of 6 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘G’ BENCH, NEW DELHI BEFORE MS. MADHUMITA ROY, JUDICIAL MEMBER, AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 3501/DEL/2024 [A.Y. 2017-18] Simply Money Services Pvt Ltd Vs. The I.T.O Shop No. 21, Defence Colony Ward - 23(2) Market, New Delhi Delhi PAN – AANCS 9565 N (Applicant) (Respondent) Assessee By : Shri Sohail, CA Department By : Shri Manish Gupta, Sr. DR Date of Hearing : 13.08.2025 Date of Pronouncement : 10.11.2025 ORDER PER NAVEEN CHANDRA, A.M:- This appeal by the assessee is preferred against the order of ld. CIT(A), Delhi dated 31.05.2024 for A.Y 2017-18. 2. The solitary issue raised by the assessee relates to the addition of Rs. 2,47,71,845/- received from M/s Vacation To Go Pvt Ltd during the course of its business for issuance of Forex Card u/s 68 of the Income- tax Act, 1961 [the Act, for short]. Printed from counselvise.com ITA No. 3501/DEL/2024 [A.Y. 2017-18] Simply Money Services Vs. ITO Page 2 of 6 3. Representatives of both the sides were heard at length. Case records carefully perused. Relevant documentary evidence brought on record duly considered in light of Rule 18(6) of the ITAT Rules. 4. Briefly stated, the facts of the case are that the assessee company was incorporated under the provisions of the Companies Act, 1956, on 15.03.2010. It is duly licensed by the Reserve Bank of India (RBI) to operate as a Full-Fledged Money Changer (FFMC) and is engaged in the business of purchasing and selling foreign currency, traveller's cheques, and prepaid foreign exchange cards (forex cards). The company procures these instruments from banks and other authorized entities and sells them to its clients/customers. Revenue is generated by way of the margin earned - the difference between the cost price and the selling price of such instruments. 5. The assessee company filed its return of income for AY 2017-18 on 31.10.2017 declaring total income of Rs. 4,46,370/-. The Assessing Officer made an addition of Rs. 2,47,71,845/- to the returned income u/s 68 of the Income-tax Act, 1961, on account of alleged unexplained credits and completed assessment u/s 143(3) of the Act, determining the total income of the assessee at Rs. 2,52,18,220/-. Printed from counselvise.com ITA No. 3501/DEL/2024 [A.Y. 2017-18] Simply Money Services Vs. ITO Page 3 of 6 6. The assessee was aggrieved and went in appeal before the ld. CIT(A) who dismissed the appeal of the assessee by upholding the remand report. Now the further aggrieved assessee is in appeal before us. 7. Before us, the ld. counsel for the assessee vehemently stated that The Assessing Officer treated the sum of Rs. 2,47,71,845/-, received from one of the assessee’s clients, namely M/s Vacation to Go Pvt. Ltd., towards sale proceeds of foreign exchange in the form of prepaid forex cards, as unexplained credits u/s 68 of the Act. The Assessing Officer formed a belief that M/s Vacation to Go Pvt. Ltd. was a non-genuine concern whose bank accounts had allegedly been used by other parties for fund rotation, and that the creditworthiness of the said concern had not been established. The ld. counsel for the assessee submitted that the said amount represented genuine business receipts from lawful sale transactions and that no line of credit or financing arrangement was ever availed from M/s Vacation to Go Pvt. Ltd. 8. The ld. counsel for the assessee further submitted that the said amount was, in fact, an advance received in the normal course of business against the sale of prepaid foreign exchange cards, representing a routine commercial transaction and not unexplained or Printed from counselvise.com ITA No. 3501/DEL/2024 [A.Y. 2017-18] Simply Money Services Vs. ITO Page 4 of 6 unsubstantiated credit. Correspondingly, the assessee purchased the requisite foreign exchange from the Banks with amounts debited by the bank within 2-4 days after credited in the bank, demonstrating a complete business cycle. The Ld. CIT(A) has merely upheld the assessment order based on the remand report of the Assessing Officer, without independently appreciating the facts, examining the commercial nature of the transactions, or considering the documentary evidence on record. The ld. counsel for the assessee concluded by submitting that the said addition of Rs. 2,47,71,845/- made u/s 68 of the Act be deleted in entirety as bad in law, unsustainable on facts, and contrary to the principles of natural justice. 9. Per contra, the ld. DR relied upon the orders of the authorities below. 10. We have heard the rival submissions and have perused the relevant material on record. We find that the CIT(A) has upheld the addition made by the AO without giving any finding on the facts of the case. We note that the CIT(A) had sought a remand report on the genuineness of the transaction between the assessee and M/s Vacation to Go Pvt Ltd. In the remand report, the AO states that M/s Vacation to Go Pvt Ltd were issued notice u/s 133(6) and no response has been received. Printed from counselvise.com ITA No. 3501/DEL/2024 [A.Y. 2017-18] Simply Money Services Vs. ITO Page 5 of 6 Thereafter, the CIT(A), very cryptically dismissed the appeal on the basis of this remand report. 11. We are of the considered view that the CIT(A) has not fulfilled his judicial duties u/s 250(6) to pursue and determine the facts of the case. We therefore, in order to adhere to the principle of natural justice, consider it fit to remand the matter of addition u/s 68 back to the file of the CIT(A) for a fresh adjudication. The CIT(A) is directed to afford an adequate opportunity to the assessee to explain its position and then after judicial verification and appreciation of the facts of the case, arrive at a judicious and well-reasoned decision. The assessee is also directed to utilize the opportunity and submit promptly the relevant documents/evidence as required. 12. In the result, the appeal of the assessee in ITA No. 3501/DEL/2024 is allowed for statistical purposes. The order is pronounced in the open court on 10.11.2025. Sd/- Sd/- [MADHUMITA ROY] [NAVEEN CHANDRA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 10th NOVEMBER, 2025. VL/ Printed from counselvise.com ITA No. 3501/DEL/2024 [A.Y. 2017-18] Simply Money Services Vs. ITO Page 6 of 6 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) Asst. Registrar, 5. DR ITAT, New Delhi Sl No. PARTICULARS DATES 1. Date of dictation of Tribunal Order 2. Date on which the typed draft order is placed before the Dictating Member 3. Date on which the typed draft order is placed before the other Member [in case of DB] 4. Date on which the approved draft order comes to the Sr. P.S./P.S. 5. Date on which the fair Order is placed before the Dictating Member for sign 6. Date on which the fair order is placed before the other Member for sign [in case of DB] 7. Date on which the Order comes back to the Sr. P.S./P.S for uploading on ITAT website 8. Date of uploading, inf not, reason for not uploading 9. Date on which the file goes to the Bench Clerk 10. Date on which the file goes for Xerox 11. Date on which the file goes for endorsement 12. The date on which the file goes to the Superintendent for checking 13. Date on which the file goes to the Assistant Registrar for signature on the order 14. Date on which the file goes to the dispatch section for dispatch the Tribunal order 15. Date of Dispatch of the Order 16. Date on which the file goes to the Record Room after dispatch the order Printed from counselvise.com "