Entire Bank Deposits Can’t Be Taxed U/s 69A – Only Reasonable Commission Income Taxable

Advertisement ITO Vs Manoharan Ramesh (ITAT Chennai)  ITAT Chennai upheld the order of the CIT(A) restricting addition to 8% of bank credits, rejecting the Assessing Officer’s action of taxing the entire deposits as unexplained under Section 69A. The assessee, acting as a commission agent for farmers, received sale proceeds of fruits in his bank account and withdrew cash to pay farmers after retaining commission. The AO, however, treated the entire deposits of over ₹2.5 crore as unexplained due to lack of supporting documentation. The Tribunal noted that confirmations from companies cl...