AI Drafter 
TaxTMI 
TaxTMI 
2023 (7) TMI 973
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....Ld. Pr. CIT, Indore-1 failed to appreciate that there was no error or prejudice much less both, to warrant the innovation of the powers conferred u/s 263. 3. That on the facts and circumstances of the case and in law, and in any view of the matter, the ld. Pr. CIT, Indore-1 erred in holding that the impugned assessment order dated 29.12.2019 passed u/s 143(3) of the Income Tax Act 1961 to be erroneous and prejudicial to the interest of Revenue for complete lack of enquiry on the part of the Ld. Assessing officer on all the stated issues. 4. That on the facts and circumstances of the case and in law, the Ld. Pr. CIT, Indore-1 erred in initiating proceeding u/s 263 without appreciating the fact that the assessment order is passed by the Ld. AO after detailed scrutiny and raising specific queries and after satisfying with the reply and evidence filed by the assessee and so also case law relied by the assessee on the reasons for which proceeding u/s 263 is initiated. 5. That on the facts and in the circumstances of the case and in law the Ld. pr. CIT erred in holding that the Excess stock of Rs. 1,68,030/- and Excess cash Rs. 9,21,460/- is to be assessed u/s ....
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....u/s 115BBE. Finding this, Ld. PCIT initiated action u/s 263 of the Act through notice dated 03.03.2022. 4. In response to the notice, the assessee made a reply which is reproduced by Ld. PCIT in his order. Ld. PCIT considered the same but being unsatisfied, he passed revision-order setting aside the assessment-order and directing the Ld. AO to frame a de novo assessment. 5. Being aggrieved by revision-order, the assessee has now come in appeal before us. 6. Although the assessee has raised as many as seven grounds as cited earlier, the crux of the grounds can be fit in a narrow compass i.e. whether income relatable to the excess-stock of Rs. 1,68,030/- and excess-cash of Rs. 9,21,460/- attracted section 115BBE or not; and consequently whether the revision-order passed by Ld. PCIT is valid or not? 7. Thus, the fundamental controversy between the parties is with regard to the application or non-application of section 115BBE and this controversy arises for the rival reasoning of both sides i.e. while the assessee claims the impugned excess-stock and excess-cash as part of business-income thereby not attracting section 69 /69A read with section 115BBE of the act; the Ld. PC....
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....y, the value of the investments may be deemed to be the income of the assessee of such financial year. Section 69A "69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewelry or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewelry or other valuable article may be deemed to be the income of the assessee for such financial year." Thus, section 69 / 69A is applicable if three conditions are satisfied, viz. (i) the assessee has made investment / is found to be owner of any money; (ii) such investment / money is not recorded in the books of account maintained for any source of income; and (iii) the assessee offers no explanation about the nature and source of investment / money. Reverting back to the Statement of assessee, we ....
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....ble view, the assessment-order cannot be said to be erroneous; or (ii) where the AO has conducted enquiry during assessment- proceeding but not discussed the outcome in assessment-order, the PCIT cannot make revision u/s 263 to substitute his own view. We certainly agree with such views but the facts of present appeal are different and do not warrant application of those decisions for the very reason that the Ld. DR carried us to the assessment-order wherein the Ld. AO has made following reporting on the impugned issue: "Survey u/s 133A had been carried out in the case on 19.09.2016. Unaccounted income of Rs. 10,89,490/- was disclosed during the survey on account of excess cash found of Rs. 9,21,460/- and excess stock found of Rs. 1,68,030/- has been incorporated as taxable income by the assessee in the ITR filed besides its regular income for the year under consideration." We are in agreement with Ld. DR that the Ld. AO has simply stated that the assessee has incorporated the excess-cash and excess-stock in the ITR. Needless to mention that the function of assessing authority is not only of adjudicator but also of investigator. In the present case, it is quite apparent....
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.... in the Finance Act, 2016 to 25% for income covered under Section 69A, to be prospective. The above referred enactments are herein after referred to as the '2nd Amendment Act', 'IT Act' and the 'Finance Act'. The 2nd Amendment Act was dated 15.12.2016 and the amendment to Section 115BBE was specified to be effective from 01.04.2017. The amendment enhancing the rate of tax was incorporated in the I T Act and that of surcharge in the Finance Act. On declaration, consequential relief is sought against Ext.P2 assessment order levying tax at the enhanced rate of 60% and surcharge @25% on the 'advance tax'. The learned Single Judge rejected the writ petition by a cryptic judgment relying on Commissioner of Income Tax v. S.A.Wahab.((1990) 182 ITR 464 (KER)). 2. The learned Counsel Sri. Vishnu S Arikkattil appearing for the appellant would contend that even going by the decision in Karimtharuvi Tea Estate ltd. v. State of Kerala (AIR (1966) SC 1385) an amendment made on the 1st day of April of any financial year would apply to the assessments of that year. That is, if an amendment is brought into force on 01.04.2017, as is the case here, it can only....
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....ndment. The affidavits admitting the ownership of amounts seized were also submitted prior to the amendment. The assessee was not aware of the enhanced tax liability when the admissions were made before the authorities. The assessee has also made an attempt to relate the amendments to the demonetization of the specified currencies announced on 08.11.2016 which contention we reject at the outset. The subject amendments which are relevant for our consideration have no direct link with the demonetization introduced or the taxation and investment regime of Pradhaan Mantri Garib Kalyan Yojana 2016 brought in under Chapter IX A of the 2nd amendment Act. The 2nd amendment Act as is clear from the Statements of Objects and Reasons, was to curb, evasion of tax and black money as also plug loopholes in the IT Act and to ensure that defaulting assessees are subjected to higher tax and stringent penalty provision. Both the measures spoken of herein were to further the said objects and there cannot be any nexus assumed nor is it discernible. 13. Section 115BBE was inserted by Finance Act 2012 w.e.f 01.04.2013. As on 01.04.2016 the financial year in which the subject seizures occurred S....
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....tention that he committed the misconduct on the expectation that if he were caught he would have to shell out only lesser amounts as tax and surcharge. There is no right accrued on the assessee to commit an offence on the expectation of a lesser penalty. 16. It was also argued that Income Tax at the rate or rates specified, as prescribed in any Central Act to be charged for any assessment year, shall be so charged in respect of the total income of the previous year as per Section 4 of the IT Act. However, there is no such provision to enable a surcharge to be so taxed, on the Finance Act prescribing an enhanced rate at the commencement of an year. The said contention however, cannot be sustained especially looking at the decision of the Hon'ble Supreme Court in CIT Kerala v. K Srinivas. [(1972) 4 SCC 526]. The facts are not relevant to the issue raised here and we need only look at the declaration as to the nature of a surcharge imposed in the Finance Act. The legislative history with respect to the concept of surcharge was traced by the Court, which, for the first time was found to have been recommended, in the report of the Committee on Indian Constitutional Reforms ....
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.... In the instant case surcharge was imposed by Finance Act, 2016 and the rate stood enhances by Finance Act 2017. The Income Tax even as per the Finance Act has to be at the rate specified in Part I of the 1st Schedule which shall be increased by surcharge for purposes of the Union. Surcharge hence partakes the character of Income tax and Article 271 itself empowers the Parliament, at any time to increase any of the duties or taxes by a surcharge for the purpose of the Union and it forms part of the consolidate fund. So when a surcharge is imposed it is in e4ffect an enhancement of the tax or duty. The provisions in the Finance Act also employs the words 'the income tax computed ... shall be increased by a surcharge. Section 4 of the IT Act squarely applied to the surcharge imposed. The judgement of the Learned Single judge is affirmed for the reasoning herein above and the writ appeal would stand dismissed without any order as to costs." 14. We are consciously aware of the judicial hierarchy and discipline according to which the Hon'ble High Court of Kerala, though non- jurisdictional, is higher than ITAT. Hence, respectfully following the aforesaid decision of Hon'ble Kerala Hi....
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....°à¤¾. लि. से संबंधित बतायी गयी । कृपया इस रकम का सà¥à¤¤à¥à¤°à¥‹à¤¤ सà¥à¤ªà¤·à¥à¤Ÿ करें । Document 2 उतà¥à¤¤à¤°- - मैं आपको Chandan Garment Pvt. Ltd. की cash book दिनांक 19/09/2016 को पà¥à¤°à¤¸à¥à¤¤à¥à¤¤ कर रहा हूठजिसके अनà¥à¤¸à¤¾à¤° cash का balance रà¥. 97,193/- आ रहा, अंतर की राशि रà¥à¤ªà¤¯à¥‡ 9,21,460/- (10,18,653 97,193) आता है । अतः इस अंतर की कà¥à¤² राशि को मैं सà¥à¤ªà¤·à¥à¤Ÿ कर....
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....सकी inventory आपको दिखाया जा रहा है । इस inventory के अनà¥à¤¸à¤¾à¤° उपलबà¥à¤§ stock की कà¥à¤² value रà¥. 90,84,243/- है जबकि आपके दà¥à¤µà¤¾à¤°à¤¾ पà¥à¤°à¤¸à¥à¤¤à¥à¤¤ Trading A/c के अनà¥à¤¸à¤¾à¤° सà¥à¤Ÿà¥‰à¤• की राशि रà¥. 89,16,210/- आती है । कृपया अंतर की राशि रà¥. 1,68,030/- को सà¥à¤ªà¤·à¥à¤Ÿ करें । उतà¥à¤¤à¤° - इस अंतर की राशि कà¥à¤² रà¥à¤ªà¤¯à¥‡ 1,68,030 /- को सà¥à¤ªà¤·à¥à¤Ÿ करने में à....
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....036.29 अधिक पाया गया है । कृपया इस अंतर रà¥. 9,60,036/- के कारण को सà¥à¤ªà¤·à¥à¤Ÿ करें / उतà¥à¤¤à¤° 3. मैं अंतर की राशि रà¥. 9,60,036/- को सà¥à¤ªà¤·à¥à¤Ÿ करने में असमरà¥à¤¥ हूठइसलिठमैं अंतर की राशि रà¥. 9,60,036/- को मेरी पà¥à¤°à¥‹à¤ªà¤°à¤¾à¤ˆà¤Ÿà¤°à¤¶à¤¿à¤ª कनà¥à¤¸à¤°à¥à¤¨ M/s R.R. Textile Document 5 Mills की नियमित आय के अलावा अतिरिकà¥à¤¤ आय के रूप म....
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....¤¸à¥à¤ªà¤·à¥à¤Ÿ करें । उतà¥à¤¤à¤° 5. महोदय, मैं M/s R. R. Textile Mills के पà¥à¤°à¤•à¤°à¤£ में अधिक पाये गये सà¥à¤Ÿà¥‰à¤• रà¥. 75,46,114/-का सà¥à¤¤à¥à¤°à¥‹à¤¤ सà¥à¤ªà¤·à¥à¤Ÿ करने में असमरà¥à¤¥ हूठ। अतः अंतर की राशि रà¥. 75,46,114/- को मेरी पà¥à¤°à¥‹à¤ªà¤°à¤¾à¤ˆà¤Ÿà¤°à¤¶à¤¿à¤ª कनà¥à¤¸à¤°à¥à¤¨ M/s R.R. Textile Mills की नियमित आय के अलावा अतिरिकà¥à¤¤ आय के रूप में वितà¥à¤¤à¥€à¤¯ वà....