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TMI Blog2024 (4) TMI 1217X X X X Extracts X X X X X X X X Extracts X X X X ..... yer. The appellant requested to convert the same into temporary loan and offered such receipt under the head "Business income". The fact that initially "On money" was received against booking of the premises was business receipt only and in the absence of confirmation from the prospective buyers at Rs. 35 lacs hence the amount was surrendered during search and offered for tax. Confirmation of treatment of such receipts as unexplained u/s 69A of the Act is wholly unjustified, improper and bad in law. 2) That the Ld. Commissioner of Income tax (A) erred in law in not appreciating the fact that the appellant had given loans, whenever idle funds are available with it being routine business activity. The appellant offered interest income earned on loans given in cash out of idle funds whereas interest was paid on aforesaid loans in cash though not claimed as expenditure. There being no other source of income to the firm, the amount of such acceptance of temporary loans by conversion of "On money receipt" against booking of premises was offered as income from business only. Treatment of such additional income offered having details of names, date of receipt, amount received and its rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he statement recorded u/s 132(4) has explained the nature of transactions as recorded in the seized material as it was received by the assessee as advance booking from the buyers. However, in certain cases the booking was cancelled and the amount received from the buyers was converted into loan to be paid subsequently. Ld. AR has submitted that the said amount was repaid by the assessee in the subsequent year however, to buy the piece the assesse surrendered the said income. Ld. AR has submitted that the seized documents itself explained the nature and source of these loans including the details of the person in whose names these entries are recorded in the seized material. He has pointed out that the entries are recorded in BS-1 & BS-3 and the name of the persons, details of the transactions in chronological order are given in these entries comprising of amount received in Cheque as well as in cash. Even the entries also manifest the purpose for which the amounts were received by the assessee from these persons. The seized documents contains loans accepted by the assesse as well as loan given by the assessee apart from the payment received on account of property, on account of reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n specific finding that the assessee has failed to explain the nature and source of the said loan amount and therefore, the assessee failed to prove that the income was earned from the regular business activity of the assessee. 6. We have considered rival submissions as well as relevant material on record. The AO has discussed the details of the entries in the seized material marked as BS-1 & BS-3 in para 12.1 to 12.4 as under: "12.1 BS-01 (Page-59 Back Side & Page-60): On perusal of noting on the said page, it was noted that the word 'cash' has repeatedly been mentioned and name of Shri Vijay Jain with 1.00%, cash appears on the top of the page. Additionally, the name of Shri Daulat Kaka and Shri Pramod are also mentioned. Scanned copy of Page No. 59 back side of BS-01 is reproduced as under: 12.1.2 Cash Loan from Shri Vijay Jain through Hundi: A hundi amounting to Rs. 20.00.000/- was also found affixed on bottom of page 60 of BS-01. Scanned copy of bottom of Page No. 60 of BS-01 is reproduced as under: 12.1.3 Cash Loan from Shri Daulat Kaka: The second noting on page 59 back side of BS-01 related to cash loan received from Shri Daulat Kaka of Rs. 15,00,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, jewellery or other valuable articles or the explanation offered by the assessee is not to the satisfaction of the AO. The loan entries found in the seized material are not in the nature of any money, bullion, jewellery or other valuable articles owned by the assessee. Thus it is not case of any cash bullion, jewellery or valuable articles found in the possession of the assessee or owned by the assessee. Further it is also manifest from the seized material itself that these transactions are loan transactions recorded in the name of five persons, the details of which are duly given by the AO in para 12.3 reproduced (supra) which contains all the relevant information including the nature and source. Therefore, the nature and source is explained by the seized material itself. The CIT(A) in para 3.2.4 has given reasons for upholding order of the AO that the assessee has failed to explain that the unsecured loan is the income generated from the ordinary and regular business activities of the assessee. There is no such condition in section 69A of the Act that the nature and source of acquisition of money bullion or other valuable articles shall be only income from regular business acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act. Therefore, as a natural corollary, section 115BBE of the Act would not be applicable. 9. Having held so, we may further add that a reading of section 115BBE of the Act makes it clear that the special rate of tax provided under the said provisions shall be applicable under two conditions. Firstly, where the total income includes any income referred to in sections 68, 69A, 69B, 69C or 69D and reflected in the return of income under Section 139 of the Act. Secondly, if the income determined by the Assessing Officer includes any income referred to, in sections 68, 69, 69A, 69B, 69C or 69D, if such income is not covered under the first condition. In the facts of the present appeal, admittedly, assessee has not offered the income under Section 69A of the Act. Even, the Assessing Officer has not made any separate addition under Section 69A of the Act. He has merely recharacterized the nature of income offered by the assessee. Thus, in our considered opinion, the provisions of sections 115BBE would not be applicable to the facts of the present appeal." 6.2 In the case in hand when the seized material itself explain the nature and source of the transactions and further the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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