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2022 (9) TMI 584
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.... The Commissioner of Income Tax (A) erred on facts and the circumstances of the case in dismissing the Appeal filed by the Appellant against the order passed u/s.143(3) of the Income tax Act, wherein amount declared at the time of Search was taxed as separate income u/s.115BBE of Income tax Act. 2. The Appellant submits that as per the regular return of income, there is substantial loss carried forward against which the amount declared at the time of Search as business income should have been adjusted and loss reduced. 3. The learned Assessing Officer was wrong to treat the above income as separate income and bringing the same to tax at higher percentage as underreported income. 4. The Appellant further submits th....
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....le filing the return of income. 4. The case was selected for scrutiny and during the course of assessment proceedings, the AO noticed that the assessee has missed to include the residual additional income agreed to be offered. The assessee submitted that the Chartered Accountant who was taking care of the tax related affairs of the assessee fell sick due to which the mistake of not including the additional income of Rs.53,85,000 occurred. The assessee filed a revised return before the AO including the additional income thereby reducing the loss returned in the original return to that extent. The AO treated the additional income as a separate item of income and taxed the same as per the provisions of section 115BBE and therefore recompute....
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....-18, the revenue authorities have not questioned the source of additional income and have accepted the same to be assessed as business income. He therefore submitted that Rs.53,85,000 which is residual amount out of the total additional income offered during the search proceedings, cannot take a different colour and cannot be taxed u/s. 69C of the Act. 7. The ld. DR supported the orders of the lower authorities. 8. We have considered the rival submissions and perused the material on record. We notice that during the course of search proceedings, a statement u/s. 131 of the Act was recorded from Dr. K. Ranganath, Director of the assessee. While answering Q.14 Dr. K. Ranganath has admitted that Rs.5.395 crores was paid in cash as referr....
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....14 0.7805 6. 2012-13 0.736 7. 2011-12 0.736 Total 5.395" 9. In Q. 17 of the same sworn statement, Dr. Ranganath agreed to offer the said amount of Rs.5.395 crores as additional income over the years from AYs 2012-13 to 2017-18. From the perusal of the records, it is noticed that the additional income offered is assessed under the head 'business income' while completing the assessment u/s. 143(3) r.w.s. 153A of the Act for AYs 2012-13 to 2017-18. 10. In answer to Q.14 (extracted above), Dr. Ranganath has clearly stated that the source of cash spent for referral fees is the receipts from the patients who come to the assessee company for various scans and tests. It is also stated that these receipts w....
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....tory in the opinion of the AO, then the amount of such expenditure is to be taxed as income u/s. 69C of the Act. The satisfaction to be recorded by the AO should not be objective satisfaction exercised at his discretion, but a subjective satisfaction based on the facts of the case. It would then mean that justification for exercise of the power has to be found by the authority by making a subjective satisfaction on the basis of objective material and such satisfaction must be reflected in the reasons recorded in writing while exercising the power. (Vide: Dee Vee Projects Ltd. v/s. Union of India & Ors., Writ Petition No.2693/2021, dated 11.02.2022 (Bombay High Court)). In the present case, the assessee is in the business of running a diagno....