Case Law Details
Jitendra Nemichand Gupta Vs ITO (ITAT Surat)
ITAT Surat held that addition towards cash deposited during demonetization period unwarranted as booking of railway tickets were allowed by way of old currency notes. Here, cash were received from various travelers for booking of railway tickets.
Facts- The case of the assessee was selected for security for the reasons that “large value cash deposit during the year”. During the assessment, AO noted that the assessee has deposited substantial amount of cash of Rs. 1.14 crore in his bank account, out of which amount of Rs. 13,57,110/- during demonetization period. On perusal of reply, AO was of the view that there was no sufficient cash balance on 09/11/2016 to deposit amount of Rs. 13,57,110/- during demonetization period. AO was further of the view that after demonetization, old notes were scrapped except some of the institutions authorised by the government. The assessee is not authorised railway agent. He was not required to accept old notes. The cash deposit of Rs. 13,57,110/- is nothing but unaccounted income of assessee and accordingly made addition thereof.
CIT(A) confirmed the action of AO. Being aggrieved, the present appeal is filed.
Conclusion- Held that the assessee has furnished the details of his client for which he made booking through IRCTC. No enquiry was conducted against such customers nor the assessee was asked to call any of such customer or cross check of fact on sample basis. The assessee has made transaction of more than Rs. 1.14 crore including Rs. 13,57,110/-. The assessee has also relied on press release of Economic Times wherein booking of railway tickets are also allowed by way of old currency notes. On careful perusal of such press release, I find that in the press release, there is no such restriction that railway tickets is to be booked on railway counters only. Like private hospitals were also allowed to receive old currency notes. The assessing officer has not controverted the contentions and the material brought on record by assessee. Considering the facts that the assessee has discharged his onus by showing prima facia material that the entire cash deposits was part of sale transaction, thus, no addition of cash deposits was warranted.
FULL TEXT OF THE ORDER OF ITAT SURAT
1. This appeal by the assessee is directed against the order of learned National Faceless Appeal Centre, Delhi (NFAC)/Commissioner of Income Tax (Appeals) (in short, the ld. CIT(A)) dated 14/09/2021 for the Assessment Year (AY) 2017-18. The assessee has raised following grounds of appeal:
“1. The ld. CIT(A), NFAC vide his order dated 14/09/2021 confirmed addition of Rs. 13,57,110/- made by the ld. ITO without considering the facts that appellant has submitted copies of accounts of persons with their addresses containing the details of cash paid by them against the delivery of Rail tickets with date of travel, ticket number etc. with cash book and bank statement, stating the fact that appellant has not submitted these details before CIT(A), hence CIT(A) erred in law and facts in not allowing the appeal of appellant.
2. The appellant craves to add, amend, alter, modify or delete any of the grounds as well as to submit additional grounds at the time of hearing of the appeal.”
2. Facts in brief are that the assessee the assessee is an individual, engaged in the booking of railway ticket, filed his return of income for A.Y. 2017- 18 on 30/03/2018 declaring income of Rs. 4,94,500/-. The case was selected for security for the reasons that “large value cash deposit during the year”. During the assessment, the Assessing Officer noted that the assessee has deposited substantial amount of cash of Rs. 1.14 crore in his bank account, out of which amount of Rs. 13,57,110/- during demonetization period. The Assessing Officer recorded that all deposits were in denomination notes (old notes) during the period 9/11/2016 to 31/12/2016. The assessee was issued show cause notice to explain such cash deposit in his bank account. The assessee was also asked to give comparative figure of cash deposit and the cash sales during the year. The assessee filed his reply and stated that cash deposit in bank account was out of cash sales during the year. The assessee also submitted that he has filed ledger of ticket sold from 01/04/2016 to 31/03/2017 with return of income, computation and bank statement. The assessee further vide his reply dated 23/12/2019 submitted that he is doing business of rail ticket reservation booking and received cash from different travelers which was deposited in bank account. He has received cash of Rs. 1.14 crore including Rs. 13,57,110/- during demonetization period. The assessee also furnished cash book and bank statement showing receipt of cash from various travelers and payments made to IRCTC against booking of such tickets. On perusal of reply, the Assessing Officer was of the view that there was no sufficient cash balance on 09/11/2016 to deposit amount of Rs. 13,57,110/- during demonetization period. The Assessing Officer was further of the view that after demonetization, old notes were scrapped except some of the institutions authorised by the government. The assessee is not authorised railway agent. He was not required to accept old notes. The cash deposit of Rs. 13,57,110/- is nothing but unaccounted income of assessee and accordingly made addition thereof.
3. On appeal before the ld. CIT(A), the assessee filed detailed statement of fact inter alia, stating therein that before the Assessing Officer, the assessee furnished complete details of bank statement, copy of account of travelers with their address and details of cash payment alongwith ticket number and travel date, copy of bank book and passbook. The assessee also furnished press release published in Economic Times indicating use of old currency in railway ticket. The assessee account details of the persons who given old demonetized notes to purchase rail tickets with their address, date of travel and ticket number and thus discharged his onus explaining the source of cash deposit. The assessee also stated that he is in the business of railway ticket booking through IRCTC being sub-agent of Akbar Travels. He received cash as an advance payment as well as cheque payment from booking of railway tickets. He deposited cash fund into bank and made payment to IRCTC by his debit car for booking of reservation of travelers. During demonetization period, he continued his business of boking of rail ticket and accepted old notes of Rs. 13,57,110/- with understanding that the government has allowed old currency in 23 places like payment of school fees, payment in government hospitals, payment for railway tickets etc. The assessee also stated that he has not used old notes for his personal purpose. The assessee used those currency notes for payment to IRCTC by using his debit card. As usual practice he has maintained complete details of persons, their address, ticket number and date of travel.
4. The ld. CIT(A) after considering the submission of assessee held that the assessee has not furnished any documentary evidence recording his claim and has failed to prove that cash deposit in his bank account during demonetization period are out of his own income or otherwise. No supporting evidence is filed to justify the availability of huge cash in hand for depositing in bank. The assessee failed to provide evidence in order to justify the cash deposit during demonetization period and confirmed the action of Assessing Officer. Further aggrieved, the assessee has filed present appeal before the Tribunal.
5. I have heard the submissions of learned Authorised Representative (ld. AR) of the assessee and the learned Senior Departmental Representative (ld. Sr. DR) for the revenue and have perused the orders of lower authorities carefully. The ld. AR of the assessee submits that the assessee was engaged in the business of booking of railway tickets through IRCTC as a sub-broker of Akbar Online Booking Pvt. Ltd. and was having transaction of more than Rs. 1.14 crores during whole of the year. More specifically during the period of 01/09/2015 to 08/11/2015, the assessee made cash deposit of Rs. 15,79,500/- and cash deposit during 09/11/2015 to 31/12/2015 of Rs. 26,52,600/-. The assessee has a practice to make payment to IRCTC through his debit card which is clearly evident from his bank statement. The ld. AR of the assessee also filed cash flow statement from 08/11/2016 to 31/12/2016 as well as bank flow statement from 08/11/2016 to 31/12/2016 in the following manner:
The assessee also furnished complete details of his transaction wise details as well as details of the persons from whom the assessee made booking of tickets. No enquiry was conducted by the Assessing Officer except making doubt of cash transaction. Cash transaction was nothing but cash received for booking of railway tickets. The assessee was working as a sub-broker of Akbar Online Booking Pvt. Ltd., copy of certificate issued by Akbar Online Booking Pvt. Ltd. is filed on record at page No. 214 of paper book. No enquiry was conducted either from IRCTC or from Akbar Online Booking Pvt. Ltd.. Entire money was deposited in the assessee’s bank was remitted to the bank account of IRCTC. The assessee has received commission on booking only. The Assessing Officer brought the addition under Section 115BBE of the Act. Since the bank deposit are proceeds of business transaction, which cannot be taxed under Section 115BBE of the Act. To support the submissions on merit and invocation of Section 115BBE of the Act, the assessee filed following case laws:
(1) Radhasoami Satsang Vs CIT (1992) 60 Taxman 248 (SC)
(2) ITO Vs Ashwin d. Menta Tax Appeal No. 386 of 2000
(3) Narendra g. Goradia Vs CIT (1998) 234 ITR 571 (Bom)
(4) Lakshmi Rice Mills Vs CIT (1974) 97 ITR 258 (Pat)
(5) Gur Prasad Hari Das Vs CIT (1963) 47 ITR 634 (All)
(6) Kanpur Steel Co. Ltd. Vs CIT (1957) 32 ITR 56 (all)
(7) Anantpur Kalpana Vs ITO (2022) 138 com 141 (Bang Trib)
(8) T.A. Qureshi Vs CIT 287 ITR 0547 (SC)
(9) Lakhmichand Baijnath vs CIT 35 ITR 416 (SC)
(10) Naliniknat Ambalal Mody Vs CIT 61 ITR 428 (SC)
(11) CIT Vs D.P. Sandu Bros. Chembur (P) Ltd. 273 ITR 1 (SC)
(12) CIT Vs Shilpa Dyeing & Printing Mills (P) Ltd. 39 com 3 (Guj)
(13) K. Choksi Vs ACIT Tax Appeal No. 149 of 2003
(14) Green Associates Vs PCIT Tax Appeal No. 1199 of 2018 (Guj)]
(15) CIT Vs Mhaskar General Hospital in Tax Appeal No. 1474 of 2009 (Guj)
(16) Daulataram Rawatmull Vs CIT 64 ITR 593 (Cal)
(17) Mansfield and Sons Vs CIT 48 ITR 254 (Cal.)
6. On the other hand, the ld. Sr. DR for the revenue supported the orders of lower authorities. The ld. Sr. DR submits that certificate of sub-broker was issued by Akbar Online Booking Pvt. Ltd., thus admittedly the assessee was not a travel agent of IRCTC. The concession of receiving old currency nots was available to railway counters only and not to the agent or sub-agent. Accepting old currency notes was not valid. The assessee has not proved the source of such cash deposit.
7. In short rejoinder, the ld. AR of the assessee submits that the assessee was a sub agent/sub-broker of Akbar Online Booking Pvt. Ltd. and ultimately entire amount was transmitted/remitted to railway bank account.
8. I have considered the submissions of both the parties and perused the orders of the lower authorities carefully. I have also gone through the various case laws as well as details of bank accounts furnished by assessee. Considering the submission of both the parties, I find that it is an admitted fact that the assessee was doing his business for booking of railway tickets. The assessee was doing such business much prior to declaration of demonetization scheme on 08/11/2016. Copy of bank statement shows that almost all the amount received by assessee were ultimately deposited/remitted to the account of IRCTC by way of debit card payment. The assessee throughout the proceedings before the Assessing Officer as well as before the ld. CIT(A) contended that he was working as an agent/sub-agent of Akbar Online Booking Pvt. Ltd.. Such contention of assessee was not controverted by the Assessing Officer by making investigation of fact or bringing any adverse material. The assessee has also furnished the details of his client for which he made booking through IRCTC. No enquiry was conducted against such customers nor the assessee was asked to call any of such customer or cross check of fact on sample basis. The assessee has made transaction of more than Rs. 1.14 crore including Rs. 13,57,110/-. The assessee has also relied on press release of Economic Times wherein booking of railway tickets are also allowed by way of old currency notes. On careful perusal of such press release, I find that in the press release, there is no such restriction that railway tickets is to be booked on railway counters only. Like private hospitals were also allowed to receive old currency notes. The assessing officer has not controverted the contentions and the material brought on record by assessee. The Coordinate Bench of Bangalore Tribunal in the case of Anantpur kalpana Vs ITO (Supra) has held that “where Assessing Officer made addition under Section 68 on account of cash deposited by assessee in its two bank account post demonetization, since said cash deposit was towards assessee’s sale proceeds which was already offered to tax by assessee and admitted by revenue as revenue receipt, impugned addition made under section 68, resulting in double taxation, were liable to be deleted.” Considering the facts that the assessee has discharged his onus by showing prima facia material that the entire cash deposits was part sale transaction, thus, no addition of cash deposits was warranted. In the result, the ground No. 1 of the appeal is allowed.
9. In the result, this appeal of assessee is allowed.
Order announced in open court on 30th June, 2023.
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