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TMI Blog2024 (1) TMI 970X X X X Extracts X X X X X X X X Extracts X X X X ..... . The assessee in the statement recorded during the survey operation has also accepted that it has received onmoney for its real estate project - Due application of mind by the AO during the assessment proceedings and therefore assessment cannot be held as erroneous in so far prejudicial to the interest of revenue on account of non-verification. PCIT in his order has referred the explanation 2 to section 263 of the Act, in holding that the necessary inquiries were not carried out by the AO during the assessment proceedings. However, we find that the Ld. PCIT in the notice issued u/s 263 of the Act has nowhere made any reference to the explanation 2 to section 263 of the Act, and therefore we hold that the Ld. PCIT erred in holding assessment order as erroneous and prejudicial to the interest of Revenue after referring to the explanation 2 of section 263 of the Act. To tax any item of income/ expenditure, unaccounted investment at the specific rate r.w.s. 115BBE of the Act, it is necessary to classify the income under the head deeming provision under section 69, 68, 69B etc. In the present case, the income surrendered was to be classified u/s 69 - As per the direction of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee is representing on-money received which should have been taxed under the provisions of section 69 of the Act, and accordingly the same should have been brought to tax at the special rate specified u/s 115BBE of the Act and that too without allowing any deduction against such income. However, the assessee against such income has claimed deduction on account of remuneration and interest paid to the partners amounting to Rs. 1,16,58,398/- and 16,27,064/- respectively. Thus, the Ld. PCIT held that the assessment has been framed u/s 143(3) of the Act without verification with respect to undisclosed income offered by the assessee for Rs. 1,77,66,000/- in pursuance to the provisions of section 69 r.w.s. 115BBE of the Act which is erroneous and causing prejudice to the interest of revenue. 5. Being aggrieved by the order of the learned PCIT, the assessee is in appeal before us. 5.1 The learned AR before us filed a paper book running from pages 1 to 156 and contended that the assessment has been framed by the AO after raising the query in the notice issued u/s 142(1) of the Act with respect to the income offered during survey operation. The Ld. AR further submitted the qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;per-incurium' and 'sub-silentio are explanations to the rule of 'stare decisis', If a decision has been given in ignorance of law or any statute or any binding authority, the doctrine of 'per-incurium' is attracted (State of UP Vs Synthetics and Chemicals Ltd. (1991) 4SCC 139) rule of 'sub-silentio' is applicable where a particular point of law is not perceived by the Court or was not present to its mind or is not consciously determined by the Court [Arnith Das Vs State of Bihar, AIR 2000 SC 2264, para 21] (iii) Simultaneously, the deemed income is taxed at special rates under 115BBE(1). Non-subjecting the undisclosed business-income offered in lieu of unaccounted and unexplained investment in property, is another mistake of law in the assessment order. 3. As per the facts of the case during the course of Survey u/s 133A, as can be seen from page 4 and page 5 of the statement of Mr. Shirish N Vaidya (page 41 and 42 of paper book submitted dated 12th August, 2023), a total amount of Rs. 3 crores, including Rs. 1.7766 crores pertaining to M/s Vaidya Realities for AY 2016-17 was admitted as Undisclosed Income of the firm. In its statement o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... para 3 to 10 of order u/s 263) and simply accepted the assessee's submission. Based on the above, Ld. PCIT has considered that the assessment order is erroneous as well as prejudicial to the interest of the Revenue. He has directed to make fresh assessment keeping in view the observations of PCIT, after conducting necessary verifications and Inquiries and after providing proper opportunity of being heard. 6. During the course of hearing, the undersigned also explained that the amount of Undisclosed Investment, accepted as income in the form of additional money received from sale of residential houses, which the assessee has termed 'own money', 'amount over and above the registered value of property', 'amounts in addition to the regular income of the firm during the current year', are value of undisclosed Investment/ value of residential houses over and above the registered value. Thus, the source of such investment is not recorded in the books of the assessee, and, such Investment was only found when the Survey u/s 133A was conducted, and cash-receipt documents were found and confronted to the assessee. Based on the documents and findings of the Sea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gross Profit. However, the net business profit offered as compared to tunnover is tabulated herein below: Particulars F.Y 2016-17 F.Y 2015-16 F.Y 2014-15 Sales (in Rs.) 2,98,82,300 66,00,700 1,77,01,100 Net Profit (in Rs.) 76,22,265 6,34,292 17,78,159 Point no.7 Sir, the details of other income are duly evident from the schedule P5 of audited accounts already placed on records. The summary of the same is tabulated herein below: Sr.No. Particulars Amount (in Rs.) Remarks, if any 1. Income disclosed during survey in October, 2017 1,77,99,000 Ledger account enclosed at pg 1 2. Interest Income 77,340 Ledger account enclosed at page 2 * Copy of statement recorded during the course of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct has nowhere made any reference to the explanation 2 to section 263 of the Act, and therefore we hold that the Ld. PCIT erred in holding assessment order as erroneous and prejudicial to the interest of Revenue after referring to the explanation 2 of section 263 of the Act. 6.6 We further note that the ITAT Chandigarh in the case of Shri Parmod Singla v. ACIT reported in 154 taxmann.com 347 of the Act has observed as under: 15. In the instant case, for the deeming provisions of section 69 to be attracted, there has to be a finding that the assessee has made investments during the financial year in the stock and by way of advances, such investments are not recorded in the books of account so maintained by the assessee, and the assessee offers no explanation about the nature and source of the investments or the explanation so offered is not found satisfactory in the opinion of the AO. Similarly, for the deeming provisions of section 69A to be attracted, there has to be a finding that the assessee was found to be owner of cash so found at the time survey, such cash has not been recorded in the books of account so maintained by the assessee, and the assessee offers no expla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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