ITAT Jaipur Upholds ₹14.30 Lakh Addition on Unproved Examination Fee Cash Collections

Jitendra Kumar Sharma Vs ITO (ITAT Jaipur Bench)

Calling Cash Deposits “Students’ Fees” Does Not Reduce Them to ₹10 Commission—Missing Remittance Trail Exposes the Story

Summary: The Jaipur Bench of the ITAT has upheld an addition of ₹14,30,890 where the assessee claimed that cash deposited in his bank account represented examination fees collected from college students and remitted through an E-Mitra operator, but failed to establish the corresponding transfer of the collected amount. The Tribunal found the explanation unsupported by the bank statement, commercially improbable and inconsistent with the assessee’s own return, wherein the entire deposits had been declared as business receipts.

The assessee, Jitendra Kumar Sharma, had deposited cash aggregating to ₹16,68,290 in his bank account. In the return and computation of income, he treated the deposits as gross business receipts and offered presumptive income of ₹1,05,400 u/s 44AD.

During assessment, the assessee explained that he was an employee of a college and had collected examination fees from its students. According to him, the cash so collected was deposited into his personal bank account and thereafter transferred to a registered E-Mitra operator, who ultimately remitted it to the college. The assessee stated that he acted merely as a facilitator and earned a commission of ₹10 for every statement or fee transaction processed.