TaxTMI 
TaxTMI 
2023 (6) TMI 770
X X X X Extracts X X X X
X X X X Extracts X X X X
....cts and circumstances of the case as well as law on the subject, the Assessing Officer has erred in taxing the income u/s 115BBE inserted retrospectively instead of taxing it at 35.54% as per the old provisions of S. 115BBE. 4. It is therefore prayed that addition made by assessing officer and confirmed by CIT(A) may please be deleted. 5. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal." 2. Facts in brief are that the assessee filed his return of income for A.Y. 2017-18 on 15/11/2017 declaring income of Rs. 8,48,840/-. The case was selected for limited scrutiny for cash deposit during demonetization period and transaction in property. During the assessment year, the Assessing Officer noted that as per information available with his office, during demonetization period, the assessee made cash deposit in Bank of Baroda of Rs. 14.03 lacs and Surat District Cooperative Bank Ltd. of Rs. 17.39 lacs thereby aggregating of Rs. 31.42 lacs. The assessee was asked to furnish the source of such cash deposit. The assessee explained that the cash deposit was on account of cash withdrawal from banks for medi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uring the course of assessment proceedings. The Assessing Officer has not indicated the utilization of cash by assessee for the purpose of making investment or expenditure. The Assessing Officer has not proved that the cash reflecting in the accounts were utilized for the purpose of making of other investment or expenditure. The Assessing Officer in his without prejudice submission submitted that he has not deposited cash in one book but in parts. The assessee explained that he deposited all the cash in hand before 15/11/2016, although fifty days' window was available for cash deposit. The assessee deposited cash in parts to avoid the risk of carrying the cash as the certain part of cash was placed at the custodian. The assessee also relied on various case laws on the ratio of decisions of deposit of high value of denomination notes in possession of assessee must prima facie be presumed to form part of cash balance and the burden is on the department to prove that it constitutes assessee's undisclosed income. 4. On the applicability of Section 115BBE of the Act, the assessee submitted that he was wrongly taxed under Section 115BBE of the Act, such provisions in the statute took ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he income is assessable under Sections 68, 69, 69A, 69B, 69C or 69D whether the income is offered by the assessee in the return of income or assessment is made by Assessing Officer under these Sections. The amendment was brought to plug the loophole of taxing the unexplained cash in demonetized currency. The argument of assessee that the amendment brought by legislation is in contradiction with law and policy of taxation for which the assessee cannot be imposed with the charge of increase rate by retrospective amendment, the ld. CIT(A) held that when amendment gets assent by the Hon'ble President of India, it becomes Act and is applicable to all persons. Furthermore, the amendment was brought to effective control of black money and to penalize the defaulters for evasion of tax and to burden them with higher tax implications. The retrospective amendment always been an integral part of taxation laws in India and several other countries. Thus, the grounds taken by assessee is not tenable and dismissed. Further aggrieved, the assessee has filed present appeal before the Tribunal. 7. I have heard the submissions of learned Authorised Representative (ld. AR) of the assessee and th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (8) Vinatha Madhusudan Reddy Vs ACIT (2018) 54 CCH 0151 (Mum Trib) (9) R.S. Diamonds India (P) Ltd. Vs ACIT (2022) 145 taxmann.com 545 (Mum-Trib) (10) ACIT Vs Baldev Raj Charia & Ors. 121 TTJ 366 (Del-Trib) (11) Om Prakash Nahar Vs ITO (2022) 135 taxmann.com 377 (Del-Trib) 9. On retrospective amendment under Section 115BBE of the Act, the ld. AR of the assessee has relied on the following case laws: (1) Karimtharuvi Tea Estate Ltd. Vs State of Kerala (1966) 60 ITR 262 (S) (2) CIT Vs Vatika Township (P) Ltd. (2014) 367 ITR 466 (SC) (3) Sedco Forex International Drill Inc. Vs CIT (2005) 279 ITR 310 (SC) (4) Avani xports Vs CIT (2012) 23 taxmann.com 62 (Guj) (5) CIT Vs S.A. Wahab (1990) 48 Taxman 362 (Kerala) (6) DCIT Vs Punjab Retail Pvt. Ltd. ITA No. 677/Ind/2019 10. On the other hand, the ld. Sr. DR for the supported the orders of lower authorities. The ld. Sr.DR for the revenue submits that the assesse is an old person of 71 years. His total income for A.Y. 2010-11 till 2017-18 is only of Rs. 39.00 lacs approximately. The assessee has made deposit of more than Rs. 31.00 lacs during demonetizati....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ection 115BBE of the Act, the ld. CIT(A) held that the amendment was brought to plug the loopholes for taxing the unexplained cash in the demonetization period. The amendment brought in Income Tax Act passed by Lok Sabha on 29/11/2016 as the same was granted assent by the Hon'ble President of India on 15/12/2016 with retrospective effect being an integral part of taxation law in India. 13. Before me, the ld. AR of the assessee has vehemently submitted that the cash was available from the cash withdrawal in earlier years. No corroborative or independent evidence to prove such huge cash available as on 01/04/2016 was provided except showing the cash flow statement in the books of account. I find that for A.Y. 2016-17, the assessee has offered taxable income of Rs. 6,67,210/- and cash in hand as on 01/04/2016 as of Rs. 26,59,546/- which is about five times of the returned income and does not inspire confidence. The assessee has filed bank statement of Bank of Baroda from 01/04/2016 to 31/03/2017. On 901/04/2017, the balance in the account of Rs. 21,401/-. The assessee received Rs. 2000/- by way of any F.D. on 02/04/2016 from Axis bank and interest on TDS of Rs. 1.00 lac on 18/0....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gument is, to begin with, self-contradictory. If it is a business profit, the same cannot be determined on 29/11/2016 (or 30/11/2016, the date of surrender) on which it admittedly was, even paying tax thereon, but only after the conclusion of the year/accounting period for which the profits are under law to be determined. As explained in CIT vs Ashokbhai Chimanbhai [1965] 56 ITR 42 (SC), profits do not accrue from day to day or even from month to month, and have to be ascertained by a comparison of assets at two stated points. Unless the right to profit comes into existence, there is no accrual of profit, and the destination of profit must be determined by the title thereto on the day on which they arise. The concept of accrual of the profits of a business involves their determination by the method of accounting at the end of the accounting year or any shorter period determined by law. Two, once it is admitted that the income attributable to the excess stock-in-trade of the assessee's business is not referable to the regular accounts of the said business, representing a source of income, the same is necessarily to be regarded as income from an undisclosed source. It would not parta....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ource of the cost incurred, which may be a carryover from the past or introduced in a business either during the current or an earlier year. Why, in many a case the Tribunal, as indeed the Hon'ble High Courts, have held that only the profit on sale, i.e., in line with the net profit rate disclosed per the assessee's accounts, be adopted as the income suppressed on unaccounted sale. Reference in this context be made to the decision in CIT v. President Industries [2002] 258 TR 654 (Guj), followed by several High Courts, including the Hon'ble jurisdictional High Court. The argument of "no other source of income having been found by the Revenue" is thus neither here nor there. It amounts to putting an impossible burden on the Revenue, impermissible in law. It in fact has no basis in law inasmuch as the Revenue is not obliged to locate the source of an unexplained credit in the assessee's accounts or an unexplained asset found with it, for which reference is made to CIT vs. Ganapathi Mudaliar (M.) [1964] 53 ITR 623 (SC), cited during hearing itself. Reference may also be made to Seth Kale Khan Mohamed Hanif v. CIT [1963] 50 ITR 1 (SC) and CIT v. Devi Prasad Vishwanath Prasad [19....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion furnished by the assessee, the inescapable conclusion is that the same would have come from undisclosed sources. No material/evidence of the same as representing suppressed profit, in whole or in part, has been, as aforenoted, led by the assessee in the instant case. 4.2 As regards the assessee's second, without prejudice, argument, i.e., qua nonretrospectivity, we find considerable force therein. Section 1(2) of the Amending Act provides that save as otherwise provided therein, it shall come into force "at once". The same only conveys the intent for, except where a later date is specified, the legislation to take immediate effect, i.e., as soon the assent of the Hon'ble President of India is received, by signing the same. The words "at once" convey an urgency, so that the same represents the earliest point of time at which the same is to take effect, i.e., 15/12/2016 itself, and which also explains the same being enacted during the course of the fiscal year, tax rates for which stand already clarified at the beginning of the year per the relevant Finance Act (FA, 2016). The said words "at once" would loose significance if the provisions of the Act are to, as state....