9911796707
TMI Blog2024 (8) TMI 416X X X X Extracts X X X X X X X X Extracts X X X X ..... f the case and in law, Ld. AO hasgrossly erred in making an erroneous and untenable assessment u/s 143(3) of Income Tax Act 1961 without appraising all the facts and substance of the transactions and the Ld. CIT(A) also erred in upholding the impugned addition of Rs. 14,28,26,056/- (to the extent of deposit of Specified Banking Notes during 09.11.2016 to 30.12.2016), on mere imaginary grounds, contrary to his own judgment in the appellant case for deletion of addition of Rs. 75,13,70,826 out of total addition of Rs. 89,41,86,882/- Therefore, the Ld. CIT (A) has in the same breath accepted that the money deposited during 01-04- 2016 to 08-11-2016 and 31-12-2016 to 31.03.2017 and even the deposits made in non SBN during the subject period 09.11.2016 to 30.12.2016, did belong to the First Rand Bank as the collection was made by the appellant as business correspondent in terms of the agreement executed to that effect but rejected the explanations offered by the Appellant with respect to the transactions of absolute identical nature undertaken during the period from 09.11.2016 to 30.12.2016 for the remaining amount. 2. The learned CIT(A) erred in considering the fallacious assumption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A) is against the very intention of Operation Clean Money drive of Government of India to have check on malpractices concerning conversion of unaccounted / black money into books and under which CBDT had issued detailed instructions/guidelines for the help of the assessing authorities for verification, scrutiny, and assessment of cases involving huge cash deposits during the demonetization period of 9.11.2016 till 31.12.2016, to ensure uniformity, eliminate arbitrary investigation and avoid harassment of honest tax payers. In the given case it is recorded in the order sheet of CIT(A) that he made verification, analysis of the cash deposit and the trends do not indicate any suspicion of income concealed but contrary to that observations CIT (A) maintained addition in the order without bringing on records any material for ignoring such observation. 6. The learned Ld. CIT (A) erred in not considering the scope and effect of the Specified Bank "Notes (Cessation of Liabilities) Act dated 28/02/2017 properly while maintaining addition of Rs. 14,28,26056/- on the sole assertion that the appellant was not authorized to collect money in SBN as per notification of the Government of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as justified in ignoring the condition laid down in para 'O' at page 9 of the BCA (Business Correspondent Agreement) dated 08.01.2016 which directed to maintain a collection account & a payment account to make all the transactions. 3. Whether on the facts, circumstances and in Law, the Ld. CIT(A) was justified in ignoring the facts that the assessee provided the list of customers/borrowers from whom collections were made on 25.12.2019 i.e. at the fag end of assessment and that too with incomplete information viz. many PANs & phone numbers were incorrect. 4. Ld. CIT(A) has erred in law and facts by deciding the appeal in favour of the assessee without appreciating the fact that when the depositors/borrowers were based on Mumbai and the FRB is also in Mumbai with its Head Quarter, therefore it is beyond comprehension that these customers relied upon the service of banking correspondent. 5. Appellant craves leaves to modify/amend or add any one or more grounds of appeal." 5. We have heard the rival submissions and perused the material available on record. 6. The assessee is engaged in the business of providing security, housekeeping, manpower supply since 2009 unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from various borrowers and proceeded to delete the addition partially on account of cash deposits in the following way:- a. cash deposits made during the period 01.04.2016 to 08.11.2016 and 01.01.2017 to 31.03.2017- Rs. 75,13,70,826/- b. cash deposits made during the period 09.11.2016 to 31.12.2016 other than in specified bank notes (SBN)- Rs. 7,21,44,556/- 9. The ld CIT(A) sustained the addition towards cash deposits made in the bank account in specified bank notes during the period 09.11.2016 to 30.12.2016 in the sum of Rs. 7,43,58,350/- Aggrieved by this order both the assessee as well as the revenue are in appeals before us for their respective grievances. 10. We find that the ld CIT(A) had deleted the addition by appreciating the contentions of the assessee together with modus operandi adopted by him apart from placing reliance on the confirmation letter given by FRB confirming the fact that FRB during the period 08.11.2016 to 31.12.2016 had received loan installments from various micro finance customers through assessee in the sum of Rs. 14,34,24,448.40 pisa. This confirmation is placed in pages 4 and 5 of the Paper Book. The said confirmation categorically stated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue before us. But in our considered opinion the modus operandi adopted by the assessee is details (supra) deserves to be accepted and the same activity is being carried on pursuant to a business correspondence agreement dated 08.11.2016 between FRB and assessee which is enclosed at pages 39 of the Paper Book and scope of service to be rendered by the assessee is detailed in pages 44 and 45 of the Paper Book. Once such services clearly indicates recovery of loan dues from the customers of FRBs. The relevant clause of the said agreement are reproduced below:- (vi) scope of services (v) duties and obligation of business correspondent The business correspondent shall undertake the following activities:- a.................... b...................................... c............................... d........................... e............................... f........................ g. collect funds and fees from customers for the financial products in accordance with the bank's policies and procedures as communicated to the business correspondent from time to time; h. recovery/ collection of principal, interest and other charges from the customers by strictly f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceremonies the businessman as to how he should conduct his business. The business expediency should be viewed from the point of view of the businessman and not from the point of view of the revenue. The assessee had given a plausible explanation that cash collected from customers were deposited in assessee's bank account which are located near the collection centres and immediately transferred to FRB. It is also pertinent to note that the very same transactions have been duly accepted by the ld AO in AY 2016-17 and 2018-19 vide order passed u/s 144 read with section 147 read with section 144B of the Act dated 26.03.2022 for AY 2016-17 (enclosed in pages 81 to 83 of the Paper Book) and u/s 143(3) read with section 143(3A), 143(3B) of the Act dated 25.02.2021 fro AY 2018-19 (which is enclosed in page 86 of the Paper Book), wherein, the case was selected for scrutiny exclusively to verify cash deposits made in the bank accounts. Merely because certain cash was deposited in the specified bank notes by the assessee during the demonetization period will not make the assessee tainted party when the very same transaction are being made by the assessee in the part as well as in the future. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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