9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (7) TMI 973 - AT - Income TaxRevision u/s 263 - applicability of higher rate of tax is u/s 115BBE - incomes have been admitted by assessee during the course of survey and also offered as such in the return of income - income relatable to the excess-stock and excess-cash - HELD THAT - We are in agreement with DR that the Ld. AO has simply stated that the assessee has incorporated the excess-cash and excess-stock in the ITR. 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 Ld. AR do not support the assessee s stand. As 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 Ld. PCIT has rightly termed the assessment-order as erroneous-cum-prejudicial to the interest of revenue and therefore the revision- order passed by PCIT is a valid order in terms of section 263. Decided against assessee.
Issues Involved:
1. Jurisdiction and validity of the revision order passed by the Principal Commissioner of Income-Tax (PCIT) under Section 263 of the Income-tax Act, 1961. 2. Whether the income related to excess stock and excess cash should be assessed under Sections 69 and 69A, respectively, and taxed at the higher rate under Section 115BBE. 3. Whether the assessment order passed by the Assessing Officer (AO) was erroneous and prejudicial to the interest of revenue. 4. The evidentiary value of statements recorded during the survey under Section 133A. 5. Applicability of the tax rate under Section 115BBE for the assessment year 2017-18. Detailed Analysis: 1. Jurisdiction and Validity of the Revision Order under Section 263: The assessee challenged the revision order dated 24.03.2022 passed by the PCIT, Indore-1, under Section 263, claiming it was "bad in law, without jurisdiction, based on incorrect interpretation of law, and without allowing proper and reasonable opportunity of being heard." The Tribunal found that the PCIT had validly exercised jurisdiction under Section 263 as the assessment order was erroneous and prejudicial to the interest of revenue due to the incorrect application of tax rates on the income from excess stock and excess cash. 2. Assessment of Income under Sections 69 and 69A and Taxation under Section 115BBE: The fundamental controversy was whether the income related to the excess stock of Rs. 1,68,030/- and excess cash of Rs. 9,21,460/- should be taxed under Sections 69 and 69A, respectively, and consequently at a higher rate under Section 115BBE. The Tribunal observed that the assessee admitted during the survey that the excess cash and stock were from "additional sources" or "undisclosed income." The Tribunal concluded that the conditions for applying Sections 69 and 69A were satisfied, as the investments/cash were not recorded in the books of account, and no satisfactory explanation was provided by the assessee. 3. Erroneous and Prejudicial Assessment Order: The PCIT found the assessment order dated 29.12.2019, passed under Section 143(3), to be erroneous and prejudicial to the interest of revenue. The AO assessed the income from excess stock and cash at normal tax rates, although they were taxable under Sections 69 and 69A and chargeable at a higher rate under Section 115BBE. The Tribunal upheld the PCIT's view, noting that the AO had not conducted the requisite enquiry to ascertain the nature and tax implications of the impugned incomes. 4. Evidentiary Value of Statements under Section 133A: The assessee contended that the statement recorded during the survey under Section 133A had no evidentiary value. However, the Tribunal noted that the assessee had admitted the excess stock and cash as undisclosed income during the survey and had not claimed it as business income. The Tribunal found that the PCIT rightly concluded that the impugned incomes were from unexplained sources. 5. Applicability of Tax Rate under Section 115BBE: The assessee argued that the higher tax rate under Section 115BBE should not apply as the amendment prescribing the higher rate was effective from 01.04.2017, while the survey was conducted on 19.09.2016. The Tribunal referred to the decision of the Kerala High Court in Maruthi Babu Rao Jadav Vs. The Assistant Commissioner of Income-tax, which held that the higher rate of tax under Section 115BBE applies to the whole previous year 2016-17 related to assessment year 2017-18. The Tribunal followed this decision and held that the higher rate of tax was applicable. Conclusion: The Tribunal dismissed the appeal, upholding the revision order passed by the PCIT under Section 263. The Tribunal concluded that the income related to excess stock and excess cash should be assessed under Sections 69 and 69A and taxed at the higher rate under Section 115BBE. The assessment order was found to be erroneous and prejudicial to the interest of revenue, and the higher tax rate under Section 115BBE was applicable for the assessment year 2017-18.
|
