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2024 (12) TMI 817 - AT - Income TaxAddition u/s 69A r.w.s 115BBE - cash recovered from Locker - assessee claimed that the entire amount recovered from the two lockers was business income and could not be taxed u/s 115BBE - HELD THAT - As settled principle of law, it is evident that sum recovered from Locker No.122 was mentioned in books of account. Also recovered from Locker No.125 was not mentioned in books of account. Both the amounts was claimed by appellant/assessee as business income. There is nothing on record to suggest that the assessee s explanation regarding source of income offered was doubted or disputed. As such the same cannot be subjected to tax under section 115BBE. So, application u/s 115BBE of the Act is not legal. Therefore, amount shall be treated as business income of the assessee and not u/s 69A of the Act.
Issues:
1. Appeal against assessment order under section 143(3) of the Income Tax Act, 1961 for the Assessment Year 2019-20. 2. Addition of Rs. 2,68,99,500 under section 69A r.w.s 115BBE of the Act. 3. Dismissal of appeal by CIT(A) and subsequent appeal before the Tribunal. Analysis: Issue 1: The appeal filed by the assessee was against the order dated 22.03.2023 of the Commissioner of Income Tax (Appeals)-27, arising from the assessment order dated 07.09.2021 of the Assistant Commissioner of Income Tax, Central Circle-20, Delhi, under section 143(3) of the Income Tax Act, 1961 for the Assessment Year 2019-20. The case stemmed from a search & seizure operation conducted under section 132 of the Act, where cash was recovered from the assessee's lockers, leading to the assessment and subsequent appeal. Issue 2: The primary contention of the appellant was regarding the addition of Rs. 2,68,99,500 under section 69A r.w.s 115BBE of the Act. The appellant argued that the cash recovered from the lockers was part of the business income, supported by evidence such as sales entries, cash book, ledger, and sales invoices. The appellant challenged the AO's decision to treat the cash as unexplained investment under section 69A, emphasizing that the cash was derived from legitimate business activities and should not be taxed under section 115BBE of the Act. Issue 3: The appeal before the Tribunal was a result of the dismissal of the appeal by the CIT(A). The appellant's representative presented arguments highlighting the legitimacy of the cash recovered and its direct link to business transactions. On the other hand, the Departmental Representative contended that the appellant failed to produce certain documents, supporting the AO and CIT(A)'s decision to apply section 69A r.w.s 115BBE. After examining the rival contentions, the Tribunal ruled in favor of the appellant, stating that the cash recovered was part of the business income and not subject to taxation under section 115BBE. The Tribunal relied on precedents and established legal principles to support its decision, ultimately partially allowing the appeal. In conclusion, the Tribunal's judgment addressed the issues raised by the appellant regarding the addition of cash under section 69A r.w.s 115BBE of the Act, emphasizing the importance of substantiating business income and rejecting the application of section 115BBE in this context.
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