9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (12) TMI 1546 - AT - Income TaxRevision u/s 263 - income relatable to the excess-stock excess-cash and unexplained money-advanced attracted section 115BBE - application or non-application of section 115BBE - HELD THAT - We are in agreement with Ld. DR that the Ld. AO has simply stated that the assessee has incorporated the excess-cash excess-stock and money-advanced in the ITR. Needless to mention that the function of assessing authority is not only of adjudicator but also of investigator. In the present case it is quite apparent from assessment-order that the Ld. AO has not made requisite enquiry to ascertain the nature and tax implications of the impugned incomes he has simply shut the point by saying that the assessee has incorporated incomes in ITR. Therefore the decisions relied upon by AR do not support the assessee s stand. As relying on Maruthi Babu Rao Jadav 2021 (1) TMI 481 - KERALA HIGH COURT we are inclined to hold that the higher rate of tax prescribed in section 115BBE is applicable to the whole previous year 2016-17 relevant to assessment-year 2017-18 and there is no merit in the contention raised by assessee. We are of the view that the PCIT has rightly termed the assessment-order as erroneous-cum-prejudicial to the interest of revenue and therefore the revision order passed by Ld. PCIT is a valid order in terms of section 263. Appeal of assessee is dismissed.
Issues Involved:
1. Jurisdiction and legality of the revision order under Section 263. 2. Error and prejudice to the interest of Revenue in the assessment order. 3. Classification of income as business income or income from undisclosed sources. 4. Applicability of Sections 69, 69A, and 115BBE of the Income Tax Act. 5. Tax rate applicable under Section 115BBE for the assessment year 2017-18. Detailed Analysis: 1. Jurisdiction and Legality of the Revision Order under Section 263: The assessee challenged the revision order dated 23.03.2022 passed by the Principal Commissioner of Income Tax (PCIT) under Section 263 of the Income Tax Act, claiming it to be "bad in law" and "without jurisdiction." The assessee argued that the order was based on an incorrect interpretation of law and facts, and that a proper opportunity for being heard was not provided. However, the Tribunal found that the PCIT had jurisdiction to pass the revision order as the assessment order was deemed erroneous and prejudicial to the interest of the Revenue. 2. Error and Prejudice to the Interest of Revenue in the Assessment Order: The Tribunal examined whether the assessment order dated 29.12.2019 was erroneous and prejudicial to the interest of the Revenue. The PCIT had found that the assessment order failed to tax certain incomes under Sections 69A and 69, which would attract a higher tax rate under Section 115BBE. The Tribunal agreed with the PCIT's conclusion that the lack of proper enquiry by the Assessing Officer (AO) rendered the assessment order erroneous and prejudicial to the Revenue's interest. 3. Classification of Income as Business Income or Income from Undisclosed Sources: The core issue was whether the income related to excess stock, excess cash, and unexplained money advanced should be classified as business income or income from undisclosed sources. The assessee claimed these were business incomes, but the Tribunal noted that during the survey, the assessee admitted these amounts as from "additional sources" or "undisclosed income." The Tribunal found no evidence supporting the assessee's claim that these were business incomes, thus supporting the PCIT's classification under Sections 69 and 69A. 4. Applicability of Sections 69, 69A, and 115BBE of the Income Tax Act: The Tribunal analyzed the applicability of Sections 69 and 69A, which pertain to investments or money not recorded in the books of account. The Tribunal noted that the conditions for applying these sections were satisfied as the assessee could not explain the nature and source of the excess stock, cash, and unexplained money. Consequently, Section 115BBE, which prescribes a higher tax rate for such incomes, was applicable. The Tribunal referenced a similar decision by the ITAT Indore in a previous case to support its conclusion. 5. Tax Rate Applicable under Section 115BBE for the Assessment Year 2017-18: The assessee argued that the higher tax rate under Section 115BBE, amended by the Taxation Laws (Second Amendment) Act, 2016, should not apply retrospectively to the assessment year 2017-18. The Tribunal, however, relied on a decision by the Kerala High Court, which held that the higher tax rate was applicable to the entire previous year 2016-17 for the assessment year 2017-18. The Tribunal concluded that the amendment applied to the whole previous year, thus rejecting the assessee's contention. Conclusion: The Tribunal upheld the revision order passed by the PCIT, finding the assessment order erroneous and prejudicial to the interest of the Revenue. The appeal by the assessee was dismissed, affirming the applicability of Sections 69, 69A, and 115BBE, and the higher tax rate for the assessment year 2017-18.
|
