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TMI Blog2020 (7) TMI 240X X X X Extracts X X X X X X X X Extracts X X X X ..... rvey action then he offers undisclosed income of excess cash or excess stock during the year when the survey takes place and offers it to tax. Section 115BBE of the Act was inserted w.e.f. 1.4.2013 indicating that only if the income falls u/s 68 to 69D as discussed above which does not necessarily be income of business but can be from any head of income i.e. the income defined in Section 2(24) of the Act for which the assessee is unable to offer any explanation, then such higher rate of tax i.e. 60% is to be levied u/s 115BBE of the Act. In the present case though the alleged surrendered income is a business income but since assessee being individual having no limitation of earning income from sources other than for the objects of the business and also the assessee having not offered any explanation in the statement given during the course of survey which stands unrebutted, therefore the alleged unexplained/undisclosed income is liable to be taxed as income falling under Section 68 to 69D of the Act as applicable to the type of income and has been rightly taxed by Ld. A.O applying the higher rate of tax provided in Section 115BBE of the Act. We therefore confirm the findings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not shown in books ₹ 7,75,000/- Total ₹ 92,81,150/- Subsequent to survey when the assessee filed return of income on 30.09.2015 the above said surrendered income during the survey proceedings were offered to tax as business income. The assessment was completed accepting the returned income but calculating the tax @60% on the surrendered income as per the provisions of Section 115BBE of the Act. 4. Aggrieved assessee preferred appeal before Ld. CIT(A) but failed to succeed who confirmed the action of the Ld. A.O observing as follows:- Ground No. 2 5.0 This ground of appeal is with regard to computing the Income declared by the assessee in Survey proceedings by applying the provisions of Section 115 BBE of the Income Tax Act 1961. I have carefully gone through the assessment order as well as submission of the appellant in this regard. 5.1 The appellant has taken the plea that he did not have any other income except business income. The appellant has also submitted that section 115BBE did not apply in the appellant's case as the appellant didn't have any income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate physical identity of such investment/expenditure then what is to be taxed is the undisclosed business receipt invested in unidentifiable unaccounted asset. Ld. Counsel for the assessee has also relied on following case laws:- i) Hon ble ITAT Jaipur Bench in the case of ACIT Jaipur Vs Sanjay Bairathi Gems Limited ITA No.157/JP/17 order dated 09.05.2017 ii) Hon ble ITAT Jaipur Bench in the case of DCIT Vs Ramnarayan Birla order dated 30.9.2016 iii) Hon ble ITAT Ahmedabad Bench in the case of Chokshi Hiralal Mangilal Vs DCIT TTJ(Ahd)1 order dated 21.01.2011 iv) Hon ble ITAT Mumbai Bench in the case of ACIT V/s Rahil Agencies ITA No.4413/Mum/2014 order dated 23.11.2016 v) Hon ble ITAT Jodhpur Bench in the case of Vasu Singhal V/s ITO others ITA No.142/Jodh/2018 order dated 25.5.2018. 7. Per contra Ld. Departmental Representative vehemently argued supporting the orders of both the lower authorities. 8. We have heard rival contentions and perused the records placed before us and carefully gone through the judgments referred and relied by the assessee. The sole grievance of the assessee is that income of ₹ 92,81,150/- surrendered during the course of sur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, any explanation offered by such assessee-company shall be deemed to be not satisfactory, unless- (a) the person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and (b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory: Provided further that nothing contained in the first proviso shall apply if the person, in whose name the sum referred to therein is recorded, is a venture capital fund or a venture capital company as referred to in clause (23FB)of section 10. Section 69 Where in the financial year immediately preceding the assessment year the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year. Section 69A Where in any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if in any case any amount borrowed on a hundi has been deemed under the provisions of this section to be the income of any person, such person shall not be liable to be assessed again in respect of such amount under the provisions of this section on repayment of such amount. Explanation.-For the purposes of this section, the amount repaid shall include the amount of interest paid on the amount borrowed.] 11. Under the I.T. Act the computation of income comes under Chapter IV which comprises of various heads of income starting from Section 14 to Section 59 which inter-alia covers income from salary , income from house property , profits and gains of business or profession , capital gains and income from other sources . As far as Section appearing in Section 115BBE of the Act i.e. Section Section 68, Section 69, Section 69A, 69B, 69C 69D of the Act they are mentioned in Chapter VI with the head Aggregation of income and set off or carry forward of loss and covers Section 68 to Section 80. In the instant case there is no issue relating to set off or carry forward of loss so we need to focus on the head Aggregation of income which covers Section 66 to 69D of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecorded and undisclosed income for preceding years which were not offered to tax during the year when they were earned. Before the insertion of Provision of Section 115BBE of the Act w.e.f. 1.4.2013 during the course of survey u/s 133A of the Act if any excess cash or excess stock was found and then the assessee was subjected to tax on the normal rate of tax applicable for the year in which the survey proceedings were carried out. There was no mechanism to make the distinction between the genuine assessee who regularly offers his correct income to tax on year to year basis and the assessee who conceals the income in the preceding years and only in case if he is subjected to survey action then he offers undisclosed income of excess cash or excess stock during the year when the survey takes place and offers it to tax. This clearly creates a disparity because the persons who conceals the income in the preceding years since its commencement of business and pay tax on unrecorded/unaccounted income only if he is subjected to survey action and that too in the year the survey takes place thereby taking the benefit of paying the taxes without subject to levy of interest and penalty on such ..... X X X X Extracts X X X X X X X X Extracts X X X X
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