Jagdish Muljibhai Makvana Vs. Income Tax Officer

Parties Involved

Facts Summary

The assessee, Jagdish Muljibhai Makvana, is engaged in the business of money transfer (shroff/angadiya) where he used to get funds of customers deposited in his bank account and pay the same by withdrawing from the bank account after deducting his commission. The assessee did not file his return of income under section 139 of the Income Tax Act, 1961 as his total income did not exceed the maximum amount which is not chargeable to tax. During the assessment proceeding, a show cause notice under section 142(1) of the Act was issued to the assessee asking for an explanation about the cash deposited worth Rs. 40,40,955/- during the demonetization period from 01.11.2016 to 30.12.2016. The assessment for the Assessment Year 2017-18 was finalized by the Assessing Officer as an ex-parte order under section 144 of the Act. The Assessing Officer made an addition of Rs. 14,74,978/- on account of angadiya commission calculated by taking a commission of Rs. 0.50 per Rs. 100/- (i.e. 0.50%) on the total cash deposit during the year under consideration without giving credit of the estimated expenditure.…

Legal Issues

• 1. Ld. CIT(A) erred in law as well as on facts in passing appellate order u/s. 250 of the Income Tax Act, 1961, which is bad in law.
• 2. Ld. CIT(A) erred in law as well as on facts in not admitting the appeal of the appellant.
• 3. Ld. CIT(A) erred in law as well as on facts in assuming that the appellant is liable to pay the amount of advance tax.
• 4. Ld. CIT(A) erred in law as well as on facts in not adjudicating grounds of appeal on merits.
• 5. Ld. AO erred in law as well as on facts in making addition of Rs. 14,74,978/-, by applying higher rate of commission.
• 6. Ld. AO erred in law as well as on facts in making addition of Rs. 14,74,978/- without allowing corresponding expenditure.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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