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TMI Blog2024 (11) TMI 1022X X X X Extracts X X X X X X X X Extracts X X X X ..... n the return filed. Under these circumstances, we have to see as to whether the provisions of sections 68, 69, 69A, 69B, 69C or 69D r.w.s. 115BBE of the Act are to be attracted or not. As decided in the case of Hari Narain Gattani [ 2020 (10) TMI 559 - ITAT JAIPUR ] that where the assessee surrenders undisclosed income during search action for relevant year, it is not necessary that tax rate has to be charged as per provision of section 115BBE. We find in the case of Bajaj Sons Ltd. [ 2021 (5) TMI 956 - ITAT CHANDIGARH ] has held that where director of assessee-company surrendered a certain sum during search and the Assessing Officer treated said sum as income from unexplained sources and invoked provisions of section 115BBE and charged tax at a higher rate, since the Assessing Officer had not pointed out any unexplained credit in the books of account, provisions of sections 68, 69, 69A, 69B, 69C and 69D were not attracted on surrendered amount and aforesaid surrender not being covered under the provisions of sections 68, 69, 69A, 69B, 69C and 69D, provisions of section 115BBE were not attracted. Assessee appeal allowed. - Shri R. K. Panda, Vice President And Ms. Astha Chandra, J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s admitted the additional income of Rs. 2 crore over and above the regular income on the basis of documents found and impounded for unexplained cash transactions and could not explain the source of additional income of Rs. 2 crore, the same has to be treated as income from unexplained sources and to be added u/s 68 r.w.s. 115BBE of the Act. He accordingly made addition of the same to the total income of the assessee. The Assessing Officer also made addition of Rs. 19,55,011/- as capital gain which is not the subject matter of appeal before us and therefore, we are not concerned with the same. Thus, the Assessing Officer determined the total income of the assessee at Rs. 2,19,55,011/- as against the nil business loss wherein he added the amount of Rs. 2 crore to be taxed u/s 68 r.w.s. 115BBE of the Act. 4. In appeal, the Ld. CIT(A) confirmed the action of the Assessing Officer by observing as under: 9. I have considered the facts of the case and the submissions made by the appellant. There is no dispute on the fact that incriminating documents containing cash transaction were found and impounded during the survey operation. When confronted, the appellant admitted that he has receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tina situated in Mira Road, Mumbai, In the course of the survey action, the assessee admitted that amount of Rs. 2,26,00,000/- recorded in the loose papers as cash receipts was undisclosed income of the assessee from sale of the flats which he omitted to record in the books of accounts due to mistake on the part of the accountant. The Ld. DR submitted that as per the mandate of section 69A of the Act, the assessee was required to explain nature and source of such cash receipt. He submitted that though the assessee has explained nature of the same as the business receipt but did not explain the source as from which particular sale of the flat said amount was received. He submitted that purpose of section 69A of the Act is to identify the other leg of the transaction and bring the other leg also to the tax but since assessee has not explained from which flat's sale, it has received the said receipt of cash and therefore, the said cash receipt is liable to be assessed u/s 69A of the Act, because that assessee has explained only nature and not source of the cash receipt. We agree with the argument of the Ld. DR. For the purpose of considering those cash receipts as the business rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entry in the books, in that case, the said cash amount is taxable u/s 69A of the Act, being unexplained cash not recorded in the books of accounts, because the exact source of said cash receipts is not explained by the appellant. In this scenario also, the income of Rs. 2,00,00,000/- shall be taxable as per higher rates prescribed u/s 115BBE of the Act. 16. The appellant has relied on certain case-laws but it is seen that the facts of those cases are different than the facts of present case because in the case in hand, specific query was raised asking the appellant to reveal the details of persons from whom cash was received and the appellant did not reveal the same by stating that the same was not in the interest of his business. Thus, the ratio of cases relied upon by the appellant are not applicable to the present case. 17. To sum-up, the action of the assessing officer of taxing the income of Rs. 2,00,00,000/- at a higher rate as per the provisions of section 115BBE of the Act is upheld and the ground no. 2 raised by the appellant is DISMISSED. 5. Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds: 1. The CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpounded during the course of survey action at the business premises at S. No. 48, Indraprasthanagar, Dhayari, Pune 411041. You are requested to go through the same and explain the content therein. Ans -Page No. 2(reverse) contain the detail of Rs. 50 Lakhs received in cash on account of land dealing business in respect of Land at Survey No. 18 34. These receipts are in cash and are over and above the regular income for brokerage, Page No. 2, 3, 4 are the expenses incurred by me for construction of school building. Page No. 4 contain the detail of Rs. 1 Crores received in cash on account of land dealing business in respect of Land at Survey No. 25 18. These receipts are in cash and are over and above the regular income. Page 5, 6, 7, 8 9 contains details of flats which are to be given to us by M/s. Majestic Landmarks Pvt. Ltd. These contain the detail of the flats such as area, flat no etc. Q. 11 -Now I am showing you bundle No 02 found and impounded during the course of survey action at the business premises at S No 48. Indraprastha nagar, Dhayari, Pune- 411041. You are requested to go through the same and explain the content therein. Ans - This diary contain the details of cash r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation where source of entry found in books is not substantiated. 1. Section 292C Further, it is submitted, as per section 292C, whatever documents found in the course of survey are deemed as TRUE as regards the contents therein and as regards the entries therein, etc. Now, in the present case, the impounded documents indeed clarify that, the CASH consideration is for sale of land and as such, the same automatically results in INCOME per se. No any further mandates given in section 68 are necessary for coming to a conclusion, as to whether, the entries are INCOME entries or not. In other words, without visiting mandates in section 68, the answer is already reached conclusively, and also as such admitted by the assessee in the survey statement as regards INCOME nature of the same. Hence, visiting tests of section 68 are not required at all. In such a case, one ought not to trigger the section 68 tests in the present case. As a consequence, it reveals, the characterization as section 68 tested INCOME is not visited in the present case. Hence, tax rate of 30% is the only plausible and logical answer as against tax rate of 60% (when the tests of section 68 get triggered, etc.). Kindly c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised by the assessee be allowed. 9. The Ld. DR on the other hand heavily relied on the order of the CIT(A) and submitted that since the assessee has not given the details of persons from whom cash was received, the provisions of section 115BBE of the Act are clearly attracted to such surrendered income. Therefore, the order of the CIT(A) should be upheld and the grounds raised by the assessee should be dismissed. 10. The Ld. Counsel for the assessee in his rejoinder submitted that the assessee has categorically stated that he has already given the details of particular survey number on account of which the cash has been received. Therefore, it cannot be said that the assessee has not given the details. 11. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) and the paper book filed on behalf of the assessee. We find the assessee during the course of survey operation had declared an amount of Rs. 2 crore as additional income which was offered in the return of income under the head Income from other sources . Further, the assessee has claimed current year loss of Rs. 86,98,901/- and adjusted the same against the renta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount, provisions of sections 68, 69, 69A, 69B, 69C and 69D were not attracted on surrendered amount and aforesaid surrender not being covered under the provisions of sections 68, 69, 69A, 69B, 69C and 69D, provisions of section 115BBE were not attracted. 15. Similar view has been taken by the Pune Bench of the Tribunal in the case of DCIT vs. Vaishali Agro Soya Products vide ITA No.634/PUN/2024, order dated 11.09.2024 for assessment year 2019-20 where it has been held as under: 5 7. We heard the rival submissions and perused the material on record. The issue in the present appeal relates to the applicability of provisions of section 115BBE of the Act in respect of income declared during the course of survey proceedings and offered to tax in the return of income. There is no dispute about the amount of addition to be made nor was there any dispute regarding the head of income under which the same was assessed to tax. The dispute is only with regard to the applicability of provisions of section 115BBE of the Act. Admittedly, the income offered during the course of survey proceedings was credited to Profit Loss Account and the additional income offered on account of deficit in the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal in the case of DCIT vs. M/s. Madhu Developers (supra) is concerned, we find that was an ex-parte order by the Tribunal and the Tribunal has restored the issue to the file of the Assessing Officer with a direction to give an opportunity to the assessee to provide the details of name and address of the parties from whom the said cash of Rs. 2,26,00,000/- was received which was taxed by the Assessing Officer u/s 69A r.w.s. 115BBE of the Act. Therefore, the said decision is not applicable to the facts of the present case especially, when the assessee in the instant case during the course of survey had categorically given the details of such cash receipts on account of land transaction and the particulars of land were given at the time of survey itself. In view of the above discussion, we hold that the Ld. CIT(A) was not justified in confirming the order of the Assessing Officer taxing the surrendered income of Rs. 2 crore by invoking the provisions of section 68 r.w.s. 115BBE of the Act. Accordingly, the same is set aside and the grounds raised by the assessee are allowed. 18. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court on 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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