2023 (9) TMI 212 - AT - Income Tax

Applicability of provisions of section 115BBE - income declared during the course of survey proceedings - Assessee chosen to assess the additional income under the head income from business - HELD THAT - There is no dispute about the quantum of addition to be made nor was there any dispute regarding the head of income under which the same was to be assessed to tax. Admittedly, the income offered, during the course of survey proceedings, was credited to the Profit Loss Account and it was stated that the additional income is derived from the business of Hotel carried on by the appellant. Admittedly, the assessee had offered such additional income under the head income from business and the Assessing Officer also assessed the same under the head income from business . Thus, it cannot be said that the source for additional income remains unexplained. Therefore, the provisions of section 115BBE have no application to the facts of the present case. Thus, the grounds of appeal filed by the assessee stand allowed.

Summary

Issues involved:
The appeal filed by the assessee against the order of the Commissioner of Income Tax (Appeals) for the assessment year 2019-20.

Factual Background:
The appellant, a Hindu Undivided Family (HUF), operates a hotel named "Hotel Hill Top." The Assessing Officer completed the assessment for the year 2019-20, accepting the returned income but held that income declared during a survey conducted on 21.10.2019 should be assessed under section 115BBE of the Income Tax Act, 1961.

Decision of CIT(A):
The Commissioner of Income Tax (Appeals) confirmed the Assessing Officer's action, relying on a decision of the Madras High Court, stating that the additional income declared by the appellant from the hotel business should be assessed accordingly.

Arguments:
The appellant argued that since the additional income was offered under the head "income from business" and assessed as such, the provisions of section 115BBE should not apply.

Tribunal's Analysis:
The Tribunal noted that the additional income was credited to the Profit & Loss Account and declared as derived from the hotel business. As the Assessing Officer assessed it under the head "income from business," the source of the additional income was not unexplained. Therefore, the provisions of section 115BBE were deemed inapplicable to the case.

Conclusion:
The Tribunal allowed the grounds of appeal filed by the assessee, resulting in the appeal being allowed in favor of the assessee.

Outcome:
The appeal filed by the assessee was allowed by the Tribunal on the 30th day of August, 2023.