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TMI Blog2021 (7) TMI 445X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue is as follows: "The Ld. CIT (A) has erred in enhancing the addition made by the Ld. AO with respect to the cash credited in the bank account of the assessee, after sustaining the addition made by the Ld. AO, though the addition made by the Ld. AO itself is erroneous because the assessee was only engaged in the business of arranging funds to his clients and earning meagre commission on his services rendered." 3. The brief facts of the case are that the assessee is an individual deriving income as financial intermediary filed his return of income for the AY 2015-16 on 9/3/2016 admitting total income of Rs. 7,00,200/-. Subsequently, the case of the assessee was selected for scrutiny under CASS because there were cash deposits in his sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an intermediary or agent between different vendors for getting business for them and if that particular business takes place or deal completed between them we will get some consultancy charges based on the transaction value and which will be approximately 0.25% to 0.5%. 2. As a safety precaution, we take the amount from the buying party and keep it in our bank account and once that transaction is materialized/ deal is completed/ we will release the payment to the supplier and take consultancy charges from them and if the transaction is not happed due to any reason, we will return that amount without deducting any amount towards our consultancy. It will be treated as refundable advance till the time of completion of transaction. 3. As I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned party also and request you to not consider the same as turnover and there are some internal transfer which were transferred between my own personal accounts which cannot be considered as turnover. Details are as per Annexure. 7. In view of the above, I request you good selves to consider the facts submitted and not to enhance the addition made by the Assessing officer." 6. Thereafter the Ld. CIT (A) directed the assessee to furnish evidence for earning commission between 0.25% to 0.5% on the turnover which the assessee was unable to produce. Since, assessee had declared in his return of income net profit @ 11.2% on his turnover of Rs. 79,34,850/-, the Ld. CIT (A) adopted the same rate of profit for the assessee's additional turnover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ading to the scope of complete annihilation of the assessee's business and therefore the addition made by the Ld.AO as well as the enhancement made by the Ld. CIT (A) may be deleted. The Ld. DR on the other hand argued in support of the orders of the Ld. Revenue Authorities and requested for confirming the order of the Ld. CIT (A). 8. We have heard the rival submissions and carefully perused the materials available on record. There is no dispute with respect to the nature of the assessee's business. The Ld. AO and the Ld. CIT (A) are in agreement that the assessee is engaged in the business of financial intermediary i.e., arranging funds for various parties through known contacts. In such circumstances it is obvious that the assessee w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the funds arranged, can be earned. When the facts of the case are minutely observed it is apparent that the total amount organized by the assessee from his known source is Rs. 52,31,02,079/- (that is the aggregate amount deposited in the Bank accounts of the assessee of Rs. 53,75,11,279/- excluding the cash deposited by the assessee of Rs. 1,44,09,200/- being the aggregate of commission income earned by the assessee in cash from his business of arranging funds for his clients, petty funds arranged and own funds). Now considering the nature of business of the assessee, even if 1% commission is estimated as the income of the assessee on the funds arranged and handed over to his clients, as against the commission income @ 0.25% to 0.5% admitt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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