2023 (12) TMI 99

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....e facts and in the circumstances of the case, the Ld. CIT(A) is justified in ignoring the fact that these amounts being unrecorded fall in nature of income classified in section 115 BBE of the Act." 3. Brief facts of the case culled out from the records available are that the assessee is an individual having income from trading of household goods in the name of his proprietary concern M/s. Goyal Sales. A survey action u/s. 133A of the Income Tax Act, 1961 (in short "the Act") was conducted at the business premises of the assessee on 18.01.2018. Subsequently, regular return of income was filed by the assessee on 30.07.2018 declaring total income of Rs. 2,30,85,600/-. During the continuation of assessment proceedings, the assessee, who has voluntarily surrendered an amount of Rs. 2,01,25,976/- on account of excess stock found during the course of survey proceedings, have offered tax in accordance with provisions of section 115BBE of the Act, showing his income from other sources, has shifted its stand, submitted a revised computation moving the undisclosed income surrendered under the head of income "Income from other sources" to "Income from Business and Profession", with a plea ....

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....ing the survey, is assessee's income from business only. Ld.AR placed his reliance on the judgment of co-ordinate bench of the ITAT Raipur in the case of M/s. Shree Sita Udyog v. DCIT in ITA No.249/RPR/2017 dated 22/07/2022, wherein, the Tribunal has held as under: 8. We have heard the rival contentions, perused the material available on the records. In principle, we find force in the argument and contentions of the Ld AR on the following aspects: a. Ld AO himself has observed that the Excess Stock or Unexplained investment or cash surrendered during the course of survey operations was nothing but the accumulation of profits which the assessee has been systematically enjoying and hence difference detected during the survey and surrendered as undisclosed income is assessable as undisclosed income, thereby, has admitted that the undisclosed stock was part of the business of assessee. b. From the order of Hon'ble Jurisdictional High Court in the case of Dhanush General Store (Supra) it is emerged that the assessee has shown the income trading and P&L account but not in computation of income. However, in the present case which is distinguished on the facts an....

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....a that as per Form No.10CCB filed during the assessment proceedings, the claim made by the assessee was admissible and the same remained to be allowed. The order of the learned CIT(A) is hereby upheld in view of the above discussion. The grievance of the department stands rejected." 5. In view of the finding that the assessee was not making any fresh claim and had duly furnished the documents and submitted Form for claim under section 80IB, there was no requirement for filing any revised return. The judgment relied upon was not applicable. 7. On the basis of aforesaid submissions, the Ld. AR submitted that the claim of the assessee by way of revised computation was also acceptable. Therefore, the AO was at gross error in not accepting the claim of the assessee. The Ld.AR further submitted that the assessee is liable to pay tax only upon such income as can be in law included in his total income and which can be lawfully assessed under the Act. On this aspect, the Ld. AR submitted before us that the decision of the Hon'ble Kolkata High Court in the case of CIT v. Baskar Mitter, wherein, the observations of the Hon'ble Kolkata High Court on this issue are found in Para No.....

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....sed the assessment order treating income on account of excess stock as undisclosed income liable to be taxed under the provisions of sec.115BBE of the Act. It was, therefore, the prayer that the Ld.CIT(A) duly considered the matter and lawfully granted the deserving relief to the assessee, therefore the same deserves to be upheld. 9. We have heard rival contentions, perused the materials available on record, analyzed the facts of the case in light of judicial pronouncements relied upon by the assessee. The admitted facts of the case are that a survey was conducted in the premises of M/s. Goel Sales on 01.02.2018 and during the course of survey, stock was physically verified and an excess stock of Rs. 2,01,25,976/- was found. When the assessee was queried to explain the source of investment in such excess stock (which was undisputedly accepted by the assessee), the answer to the query pertaining to investment, the assessee responded that he does not have any evidence with respect to source of investment in this excess stock. Therefore, he was unable to give any explanation on the same. The assessee further admitted that since he was not able to explain the source of investment in....

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.... of law provided the fact on the basis of which, the issue of before the Tribunal. The decision does not in any way relates to the power of the AO to entertain a claim for deduction otherwise by filing a revised return. Such observation of the Hon'ble Supreme Court undoubtedly clarify the issue that the AO has no powers to entertain a claim of deduction of the assessee without having the claim covered under the return of income or by way of a revised return. So, in the present case, the order of the AO cannot be held as erroneous on this count. 11. The reliance of the Ld.AR in the case of M/s. Shree Sita Udyog v. DCIT (supra) was also considered but the same also cannot rescue the contentions of the assessee for the reason that in the case of M/s. Shree Sita Udyog v. DCIT (supra), the AO himself has observed that the excess stock or unexplained investment or cash surrender during the course of survey operations was nothing, but the accumulation of profits which the assessee has been systematically enjoying and hence difference detected during the survey and surrendered as assessable as undisclosed income, thereby, he has admitted that the undisclosed stock was part of the busine....

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....closing stock in the balance sheet, the stock becomes part of regular books of accounts of the assessee and was made available for subsequent sale. The Ld.CIT(A) further observed that the AO has not rejected the books of accounts of the assessee and rather accepted the entries passed in the books of accounts. We cannot subscribe to the view expressed by the Ld.CIT(A), since the AO has accepted the income offered by the assessee comes under the head 'Income from Other Sources' and offered higher rate of tax on the said income, therefore, there was no occasion for the AO to go into the integrities of the books of accounts to make them liable to be rejected. Under such circumstances, we are of the considered opinion that the order of the Ld.CIT(A) was not according to the facts and law and therefore, the same is liable to be quashed and the findings of the AO in his order deserves to be sustained. Consequently, appeal filed by the Revenue is allowed with the observation that surrender amount on account of excess stock accepted as undisclosed income by the assessee, source of which is unexplained nonetheless belongs to activities other than regular business of the assessee, as admitted....

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2023 (12) TMI 99