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TMI Blog2024 (3) TMI 721X X X X Extracts X X X X X X X X Extracts X X X X ..... e is dealing in sale of food grains, rice and oil seeds and the excess stock which is found during survey is stock of rice then, it can be said that investment in procurement of such stock of rice is clearly identifiable and related to the regular business stock of the assessee. Therefore, the investment in the excess stock is to be brought to tax under head business income and not under the head income from other sources. Further in the case of Shri Lovish Singhal [ 2018 (5) TMI 1646 - ITAT JODHPUR ] the Jodhpur Tribunal applying the proposition of law laid down in the Bajargan Traders (supra), held that the lower authorities were not justified in taxing the surrender made on account of excess stock and excess cash found u/s. 69 of the Act and accordingly held that there is no justification for taxing such income u/s. 115BBE of the Act. Even the similar view taken in case of ACIT vs Shri Sudesh Kumar Gupta [ 2020 (6) TMI 463 - ITAT JAIPUR ] issue under consideration was whether rectification proceedings u/s. 154 were permissible when at the first place while passing assessment order u/s. 143(3) provisions of section 69 were not invoked for charging higher rate of tax u/s. 115BBE, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment to the returned income. Subsequently a rectification notice u/s. 154 of the Act was issued to the assessee on 10.03.2017 based on the observation of the ld. AO that the assessee has not provided any explanation regarding the investments made by it or income earned from the sale of such undisclosed investment. Therefore, the provision of section 69 of the Income Tax Act, made applicable as the assessee has not provided any explanation regarding the nature and source of investment and expenditure made out of undisclosed sources. Therefore, this investment is clearly unexplained as per the Section 69 of the Income Tax Act, 1961. The undisclosed income on account of this unexplained investment is required to be considered for taxation as per the provisions of Section 115BBE of the Income Tax Act, 1961. The return for A.Y. 2014-15 was processed u/s. 143(1) taxing the surrendered amount of Rs. 40,00,000/- as per normal tax calculation availing the benefit of progressive slab wise taxation. However, as per the facts apparent from record, this amount should have been taxed as per section 115BBE. This omission has resulted into short levy of tax and therefore, the same was rectified a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee is within the meaning of section 69 of the Act there is no mistake which is apparent of record and therefore, the order passed is bad in law and the ld. AO has not power to change the nature of income already offered in the reurn of income and the same is once accepted as business income subsequently the same not being mistake apparent on record the order passed is bad and illegal. 6. Per contra, the ld DR is heard who has relied on the findings of the lower authorities recorded in their respective orders and since the assessee accepted income as additional the same is required to be taxed as per the provision of section 115BBE of the Act. 7. We have heard the rival contentions and perused the material placed on record. The brief fact of the case is that on 15.10.2013 a survey u/s. 133A of the Income Tax Act, 1961 was carried out at the assessee's premises. During the survey, certain discrepancies were found in the books of accounts of the assessee in view of which the assessee voluntarily surrendered a sum of Rs. 40,00,000/- as income which has been offered in the return of income filed by the assessee and consequently there is no assessment order passed and intimat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... closed income. At the time of filing the return for AY 2014-15 the appellant included this income in its income tax return under the head of Business Income This amount was surrendered by the appellant on account of unexplained and out of books of investment in land and its subsequent sale However, the appellant did not establish any connect regarding how its business income has been utilized to invest in the said land or make any expenditure regarding the same. Therefore, this investment is clearly unexplained as per section 69 of the Act. The undisclosed income on account of this unexplained investment is required to be considered for taxation as per the provisions of section 115BBE of the Act. 8. The bench noted that the assessee has disclosed a sum of Rs. 40,00,000/- as income of the year under consideration by stating as under : Thus, it is evident that the assessee has disclosed the discrepancies as income and not any asset or income allegedly undisclosed. Therefore, it is the income on account of error or omission on the part of the assessee during the business and the same view is taken by the jurisdictional high court in the case of in case of CIT vs Bajargan Traders [ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X
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