2019 (9) TMI 655 - AT - Income Tax

Accrual of income - year of assessment - cash seized at airport - HELD THAT - Findings noted by the ld. CIT(A) that the disputed amount has been earned during the assessment year 2013-2014, therefore, it would be taxed in the assessment year 2013-2014. Accordingly, we do not find any substance in the submissions of assessee that this amount is included in ₹ 20 lakhs. The amount has been earned by the assessee during the impugned assessment year, therefore, taxability on the same amount cannot be carried forwarded in the subsequent year. The income has been defined as per Section 2(24) of the Act. Tax should be charged in the relevant assessment year in which it has been received or deemed to be received/accrues or arises or is deemed to accrue or arise/accrues or arises to the assessee at the rate in force in that assessment year. Ld. AR of the assessee has also not disputed that this income has been earned during the impugned assessment year, therefore, in view of the above, ld. CIT(A) has rightly decided the issue. - Decided against assessee

Summary

Issues Involved:
1. Legality of additions made to the income of the appellant.
2. Jurisdictional authority for assessment.
3. Double taxation on the same income.

Detailed Analysis:

1. Legality of Additions:
The appellant argued that the additions made to their income were illegal since no incriminating material was found during the search or post-search inquiry. The appellant, a wholesale dealer of seasonal stationary items, was intercepted at the New Delhi Airport carrying ?20 lakhs in cash, out of which ?19 lakhs was seized. The Assessing Officer (AO) noticed discrepancies in the appellant's bank deposits and sales records, leading to an addition of ?31,66,463/- as undisclosed income. The CIT(A) partly allowed the appeal, confirming a gross profit rate of 9.06% on the unexplained sales, resulting in an addition of ?2,86,881/-.

2. Jurisdictional Authority:
The appellant contested the jurisdiction of the assessment order passed under sections 143(3)/153A of the Income Tax Act, arguing that no opportunity of being heard was given before transferring jurisdiction from one assessing officer to another. However, this issue was not argued during the hearing before the Tribunal.

3. Double Taxation:
The appellant contended that the ?20 lakhs cash seized included an unaccounted gross profit of ?2,86,881/-, which should not be taxed again in the subsequent year. The Tribunal found no evidence that this argument was raised in the previous year's proceedings. The Tribunal upheld the CIT(A)'s decision, stating that the income should be taxed in the year it was earned, i.e., the assessment year 2013-2014.

Conclusion:
The Tribunal dismissed the appeal, upholding the CIT(A)'s decision to restrict the addition to ?2,86,881/- based on the gross profit rate. The Tribunal found no reason to interfere with the findings of the lower authorities, confirming that the income should be taxed in the relevant assessment year. The appeal was dismissed, and the order was pronounced in the open court on 20/08/2019.