2023 (9) TMI 1476 - AT - Income Tax

Additional income offered by the assessee during the course of search - unexplained income u/s 69A liable to taxed @60% as prescribed in section 115BBE - appellant had surrendered income during a search operation, attributing it to undisclosed business receipts - HELD THAT - If such income is earned on or after 15.12.2016, the same would be liable to be taxed @60% as per amended provision of section 115BBE. This aspect has been adjudicated in the case of Sri Parmod Singhla 2023 (8) TMI 525 - ITAT CHANDIGARH Similar view was also taken in case of Jain Plywood 2023 (8) TMI 143 - ITAT CHANDIGARH wherein they have held that income surrendered and sought to be taxed under the deeming provision of section 69 which is in the nature of business income could be brought to tax only @30%, as at the time of surrender the applicable rate was only 30% within section 115BBE - It is also pertinent to note that in the instant case there is absolutely no dispute that the assessee does not have any other income other than business income in the commission agent business. Hence, the only source of receipt for the assessee could be income from the business and that to at the time of surrender, the applicable tax rate was only 30%. Hence we hold that the additional income offered by the assessee in the sum which is in the nature of business income of the assessee had to be taxed only @30% as per pre-amended provisions of section 115BBE of the Act - Decided in favour of assessee.

Summary

Issues Involved:
The appeal concerns the legality of the order passed by the Commissioner of Income Tax (Appeals) and the assessment of income by the Assessing Officer based on a time-barred revised return. Additionally, the issue of making an addition of surrendered income during search operations, leading to potential double taxation, is raised.

Grounds of Appeal:
1. The appeal challenges the legality and fairness of the order by the Commissioner of Income Tax (Appeals).
2. The assessment by the Assessing Officer is questioned as being based on a time-barred revised return.
3. The addition of surrendered income during search operations is contested, alleging potential double taxation.
4. The appellant seeks justice through the admission of the appeal.

Summary of Judgement:
The appeal was initially delayed by 2 days, but the delay was condoned, and the appeal was admitted for adjudication. The Tribunal had previously allowed the appellant's appeals for assessment years 2011-12 to 2016-17. The appellant withdrew one of the grounds raised for the assessment year 2017-18 following the successful appeals for previous years.

Additional grounds were raised by the appellant, challenging the assessment order under sections 69A and 115BBE of the Income-tax Act, 1961. These grounds were admitted for adjudication due to their legal nature and not requiring further verification of facts.

The main issue addressed was whether the additional income offered by the appellant during the search should be considered unexplained income under section 69A and taxed at 60%. The appellant had surrendered income during a search operation, attributing it to undisclosed business receipts. The Tribunal found that the income, being from the appellant's business activity, should be taxed at 30% as per the pre-amended provisions of section 115BBE, rather than the higher rate of 60%.

Based on the above findings, the additional grounds raised by the appellant were allowed, and the appeal was partly allowed. The judgement was pronounced in the open court on 15/09/2023.