ITA No. 6788/Mum/2026 (A.Y. 2020-21)

Parties Involved

Facts Summary

The assessee, Suraj Somaru Varma, filed his return of income for the assessment year 2020-21 declaring total income of Rs.6,60,250/-. The assessment was subsequently reopened under section 147 of the Act. During reassessment proceedings, the Assessing Officer noticed cash deposits and credits in various bank accounts of the assessee. The Assessing Officer treated the balance amount of Rs.8,33,66,925/- as unexplained money under section 69A read with section 115BBE of the Act. The assessee explained that he was carrying on the business of a Business Correspondent Agent for various entities and that the bank accounts were used in the ordinary course of such business for receiving cash from customers and facilitating transfer/remittance of such funds to the respective principals. The assessee furnished agreements and certificates evidencing his agency arrangements with Vodafone M-Pesa Ltd., IDFC First Bank Ltd. and other entities. The Assessing Officer, however, proceeded to examine the commission received by the assessee of Rs.1,50,306/- from Vodafone M-Pesa Ltd. and, applying the rate of 0.5%, worked out the corresponding transaction value at Rs.3,00,61,200/-. After reducing the said amount from the aggregate bank credits of Rs.11,34,28,125/-, the Assessing Officer treated the balance amount of Rs.8,33,66,925/- as unexplained money under section 69A read with section 115BBE of the Act. The Assessing Officer accordingly made an addition of Rs.8,33,66,925/- to the income of the …

Legal Issues

• 1. Deletion of the addition of Rs.8,33,66,925/- made by the Assessing Officer under section 69A read with section 115BBE of the Act.
• 2. The grievance of the Revenue that the learned CIT(A) granted relief by accepting explanations, reconciliations and supporting documents at the appellate stage without calling for a remand report or otherwise obtaining verification from the Assessing Officer.

Judgment Outcome

Decided in favour of Revenue.

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