Suraj Somaru Varma Vs ITBA (ITAT Mumbai)
Mumbai Tribunal has deleted an addition of ₹9.16 lakh made u/s 69A on account of demonetized currency deposits, holding that such deposits were part of normal business transactions of a duly authorized Business Correspondence (BC) agent of Vodafone M-Pesa Ltd.
Assessee, working as a BC agent under an agreement with Vodafone M-Pesa Ltd. & as per RBI guidelines, collected cash from customers, deposited the same into his bank account, & remitted it to Vodafone M-Pesa, which in turn credited customer accounts. During demonetization, Assessee deposited ₹50.11 lakh, including ₹19.20 lakh in old notes. AO treated ₹9.16 lakh as unexplained cash u/s 69A. CIT(A) confirmed the addition.
Before the Tribunal, Assessee produced agency agreement (06.09.2016), relevant RBI circulars (28.09.2010, 02.09.2013 & 08.11.2016), & customer transaction registers. It was shown that the disputed ₹9.16 lakh was collected from customers on 10.11.2016, deposited on 11.11.2016, & transferred through Vodafone M-Pesa to customer accounts by 13.11.2016. Tribunal noted that AO himself referred to the customer register, & the deposits were fully traceable & duly accounted.
Tribunal held that since Assessee was authorized by RBI to handle such transactions &proper records were maintained, the deposits were in the regular course of business & not unexplained. It also observed that Assessee’s real income was only the 0.5% commission (~₹3.38 lakh already offered to tax). Accordingly, the addition of ₹9.16 lakh was deleted & the appeal of the Assessee was allowed.
