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TMI Blog2024 (11) TMI 1118X X X X Extracts X X X X X X X X Extracts X X X X ..... sh receipts were in multiple transactions, each of which did not exceed Rs. 2 lakh per transaction, as required by Section 269ST - assessees had already provided this information to the PCIT during the revisionary proceedings, confirming that the receipts did not violate Section 269ST - PCIT did not present any evidence to contradict the assessee s explanation, and therefore, the invocation of Section 263 on the ground of potential Section 269ST violations was based on conjecture rather than facts. Reliance placed by the AR on judgement in the case of Dharti Estate [ 2024 (1) TMI 1197 - GUJARAT HIGH COURT] is valid. In that case, the court held that if the AO has made adequate inquiries and treated the undisclosed income as business income, the revisionary powers u/s 263 cannot be invoked simply because the PCIT holds a different view. This legal principle applies here, where the AO took a plausible view after considering the evidence and treating the undisclosed income as business income. Application of Section 115BBE - AO correctly assessed the undisclosed income at the normal rate since it was explained and connected to business receipts. There was no basis for taxing the income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /09/2017 Income Declared in Return Rs.3,20,77,040/- Rs.1,02,52,730/- Income Assessed Rs.3,20,77,040/- Rs.1,02,52,730/- Survey Action u/s 133A Conducted on 30/08/2016 Conducted on 30/08/2016 Undisclosed Income Admitted by Partner Rs.3,00,14,000/- (Partner: Shri Ashwin Naranbhai Patel) Rs.1,00,20,000/- (Partner: Shri Hitesh C. Patel) Undisclosed Income Offered in return of income Rs.3,00,14,000/- Rs.1,00,20,000/- Order Passed u/s 143(3) 143(3) Date of Assessment Order 26/12/2019 26/12/2019 Penalty Proceedings Initiated u/s 270A for underreporting of income u/s 270A for underreporting of income 2.1. Later on, the PCIT, in both cases of Aadhya Reality and Aadhya Infrastructure, determined that the AO failed to conduct proper verification regarding the nature and source of the undisclosed income admitted during the survey under Section 133A of the Act. Specifically, the PCIT, observed that the AO accepted the undisclosed income as part of regular business receipts without investigating whether it was unexplained cash receipts under Section 69A of the Act. The PCIT also observed that the undisclosed income was taxed at the normal rate of 30%, instead of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details of identity, confirmation of the persons from whom cash has been received. 4. Ld. PCIT erred in law and on facts in passing impugned order on the alleged ground of possible violation of Sec. 269ST and 274DA inserted w.e.f. 01.04.2017. 5. Ld. PCIT erred in law and on facts revising scrutiny assessment order relying on Hon'ble Delhi high court judgments on completely different set of facts. Your appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal before the appeal is heard and decided. 4. During the course of the hearing before us, the Authorised Representative (AR) of the assessee submitted that neither of the assessee-firms were engaged in any other business from which the undisclosed income could have been generated. The AR emphasized that the partners of both firms, in their recorded statements, unequivocally admitted that the undisclosed receipts were solely related to the respective business activities. Furthermore, the AR highlighted that the source of these unaccounted receipts was fully explained during the statements recorded in the survey, confirming that the amounts were received from members i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipts related to business activities (i.e., extra work, development charges, and maintenance charges). Furthermore, the cash receipts were in multiple transactions, each of which did not exceed Rs. 2 lakh per transaction, as required by Section 269ST of the Act. The assessees had already provided this information to the PCIT during the revisionary proceedings, confirming that the receipts did not violate Section 269ST of the Act. The PCIT did not present any evidence to contradict the assessee's explanation, and therefore, the invocation of Section 263 on the ground of potential Section 269ST of the Act violations was based on conjecture rather than facts. 7.2. Moreover, the reliance placed by the AR on the Hon'ble Gujarat High Court's judgement in the case of Dharti Estate is valid. In that case, the court held that if the AO has made adequate inquiries and treated the undisclosed income as business income, the revisionary powers under Section 263 of the Act cannot be invoked simply because the PCIT holds a different view. This legal principle applies here, where the AO took a plausible view after considering the evidence and treating the undisclosed income as business income. 7. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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