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TMI Blog2024 (8) TMI 416X X X X Extracts X X X X X X X X Extracts X X X X ..... essee are incorrect and incomplete. As stated earlier the assessee is merely a loan collection agent. The entire details have been obtained by the assessee from the bank. The assessee had duly explained in this regard that the phone numbers given there are there complete in view of the fact that first two digits are given in previous column and remaining 8 digits in next column thereby making mobile no and land line no complete. Assessee had conducted enquiry on few borrowers on test check basis and found the borrowers to be genuine and had also verified PANs with them. These details are also placed on record before the lower authorities. Hence, the observations made by the AO in this regard in the assessment order is completely devoid of merit. There is absolutely no case for making any addition on account of cash deposit made by the assessee in his bank account and that the entire cash deposit made in his bank account stands thoroughly and properly explained. Hence, we have no hesitation to accept the stand of the assessee herein. Grounds raised by the assessee are allowed. - SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER For the Appellant : Shri Vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be invoked when the appellant has produced all cogent evidence and information in support of his claim and the same is accepted by the Ld. CIT (A). Ld. CIT(A) has misconstrued, the Section 69A of the Act, which has very limited and specific jurisdiction and cannot be applied irrationally on surmises, conjectures and presumption. 3. That on the facts and circumstances of the case and applicable law, Ld. CIT(A) erred in stating in the order sheet that the appellant could not produce any relevant material to substantiate his claim adhering to norms of RBI during demonetization period and the parties does did not make any explicit agreement during the period of demonetization towards collection of cash in SBN from the customer's in line with the guidelines of RBI, without appreciating the fact that gamut of explanation along with supporting documents submitted by appellant during the proceedings and the most importantly letters of confirmations obtained from FRB is available on record, which categorically endorses the transactions undertaken by the appellant on behalf of the First Rand Bank declaring that the appellant acted within banking policies. 4. The learned CIT(A) er ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case VS of ITO Sri Tatiparti Satyanarayana in ITA No.76/Viz/2021vide order dated 16.03.2022 and in Umamaheswari Vs ITO (ITAT Chennai) ITA No.527/Chennai/2022 vide Order dated 14.10.2022. 7. That the Ld CIT(A) erred in facts and Law by acting contrary to the intent of Central Government decision of bringing demonetization of High Value Currency after due consideration to curb:- i) The menace of fake currency notes of the specified bank notes in circulation and it has been found to be difficult to easily identify genuine bank notes from the fake ones. ii) Whereas, it has been found that high denomination bank notes are used for accumulation of unaccounted money as has been evident from the large cash recoveries made by law enforcement agencies; iii) Whereas, it has also been found that fake currency is being used for financing subversive activities such as drug trafficking and terrorism, causing damage to the economy and security of the country. Thus, the reason for demonetization was never to consider arbitrarily, even an explained nature and source of cash deposit as unauthorized and treat them as deemed income under Income Tax act and taxed at special rate provided u/s 115 8. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement executed between the parties services to FRB by the assessee under the aforesaid arrangement included supply manpower for their operations, selling/ marking of banking products, payments and administration of expenses and the collection of loan installment from their micro borrowers who are thousands in numbers spread over all over the region of Mumbai and its suburb. The assessee was collecting monthly installments from borrowers on behalf of FRB in terms of aforesaid arrangement and thereafter the amount of cash was collected from borrowers of FRB was then deposited to his bank account maintained with ICICI, HDFC Bank and Axis Bank wherein, the day to day collection made by the assessee on behalf of FRB were deposited in the assessee s bank account along with list of details of borrowers from whom amount was collected and later the monies were transferred to the account of FRB by the assessee. For rendering such services, the assessee was charging a fee as mark up above his cost and monthly bills were raised by FRB. During the financial year 2016-17, the assessee earned total fees of Rs. 8.91 crores from FRB which is duly recorded in the books of account maintained by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FRB, deposit the same in the bank account of the assessee and thereafter transferring the amounts to the account of FRB. Hence, the assessee is merely acting as a post office/ collection agent in this entire episode. Accordingly, the cash deposits made in the bank account of the assessee gets properly explained by the assessee. In our considered opinion, the assessee had merely acted as a custodian of the money belonging to FRB. The assessee itself is an agent and had engaged several agents/ personnel in various suburbs of Mumbai to collect the loan installments from thousands of micro finance borrowers of FRB. Those personnel after collecting monies from the borrowers in cash had deposited the cash in the bank account of the assessee by going to the nearby branch in the collection area for the purpose of safety and security. The assessee is merely acted as a custodian of the monies. There is absolutely no dispute that the assessee had received all money in his bank account had thereafter transferred the monies to the account of FRB who is legitimately entitled for the same. In this process the assessee had also earned a fee/ commission/ agency commission by whatever name called f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 019 in connection with assessment proceedings of AY 2017-18 had also confirmed this fact that assessee had acted as a loan collection agent of FRB by collecting loan dues through banks, micro finance customers. This confirmation is enclosed in page 80 of the Paper Book. 13. The only grievance of the revenue is that the assessee had collecting the cash from borrowers is supposed to deposit the money in the bank account of FRB. The assessee was supposed to open with FRB. But without depositing the money in the account of FRB the assessee had deposited the cash in his bank account thereafter transferred the money to FRB. In our considered opinion this is different and irrelevant consideration in as much as ultimately monies had reached the account of FRB and there is absolutely no dispute raised by FRB with regard to recovery of any money due from the assessee. While this is so how the income tax department be bothered on this transaction when there is no dispute between the parties concerned. As far as the assessee is concerned he is bound to explain the source of cash deposit made in his bank account which has been properly done in the instant case. Hence, the assessee is duly compl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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