2024 (3) TMI 721

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....sed by AO u/s. 154 of the IT Act. 3. Interest charged u/s. 234B and 234C was wrongly confirmed by the CIT(A). 4. The assessee reserves the right to add, alter or amend any ground of appeal as and when the need arises u/s. 250 of IT Act." 3. Succinctly, the fact as culled out from the records is that on 15.10.2013 a survey u/s. 133A of the Income Tax Act, 1961 was carried out at the assessee's premises. During the survey, certain discrepancies were found in the books of accounts of the assessee in view of which the assessee voluntarily surrendered a sum of Rs. 40,00,000/- as undisclosed income. At the time of filing the return for A.Y. 2014-15 the assessee included this income in its Income Tax Return under the head of 'Business Income. This amount was surrendered by the assessee on account of unexplained and out of books investment in land and its subsequent sale. The assessee has surrendered the income under the head of Business Income as noted above. Consequent to the survey there is no assessment and accordingly there is no adjustment to the returned income. Subsequently a rectification notice u/s. 154 of the Act was issued to the assessee on 10.03.2....

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....n account of unexplained and out of books of investment in land and its subsequent sale However, the appellant did not establish any connect regarding how its business income has been utilized to invest in the said land or make any expenditure regarding the same. Therefore, this investment is clearly unexplained as per section 69 of the Act. The undisclosed income on account of this unexplained investment is required to be considered for taxation as per the provisions of section 115BBE of the Act. 7.1 During the course of the appellate proceedings, the appellant has not brought anything on record to show how the income surrendered is a business income. In view of these facts and circumstances of the case, I do not find any infirmity in the order of AO and accordingly the charging of the said surrendered income by invoking the provisions of section 115BBE of the Act is upheld and the Ground of Appeal is dismissed. 8. In the result, the appeal of the appellant is dismissed." 5. The ld. AR of the assessee vehemently argued that without bringing any finding that the income accepted by the assessee is within the meaning of section 69 of the Act there is no mistake w....

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....diture made out of undisclosed sources. Therefore, this investment is clearly unexplained as per the Section 69 of the Income Tax Act, 1961. The undisclosed income on account of this unexplained investment is required to be considered for taxation as per the provisions of Section 115BBE of the Income Tax Act, 1961. The return for A.Y. 2014-15 was processed u/s. 143(1) taxing the surrendered amount of Rs. 40,00,000/- as per normal tax calculation availing the benefit of progressive slab wise taxation. However, as per the facts apparent from record, this amount should have been taxed as per section 115BBE. This omission has resulted into short levy of tax and therefore, the same was rectified as per provision of section 154 (1)(b) of the Act by the ld. AO vide an order dated 12.01.2018. The ld. CIT(A) confirmed the action of the ld. AO by holding as under : 7. On perusal of the remand report of the appellant and the order passed u/s. 154 of the Act. I find that a survey was conducted in the case of the appellant and on noticing of certain discrepancies, the appellant surrendered a sum of Rs. 40,00,000/- as undisclosed income. At the time of filing the return for AY 2014-15 the app....

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....assing assessment order u/s. 143(3) provisions of section 69 were not invoked for charging higher rate of tax u/s. 115BBE, wherein the coordinate bench held that the assessing officer has not invoked the provisions of section 69 at the first place while passing assessment order u/s. 143(3) and therefore, the provisions of section 115BBE which are contingent on satisfaction of requirement of section 69 cannot be independently applied by invoking the provisions of section 154 of the Act. Respectfully following the ratio of the aforesaid decision we see no merit in the order passed u/s. 154 of the act and the same is quashed. 9. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 13.03.2024 ============= Document 1 “प्रश्न : आप द्वारा दिया गया उक्त स्पस्टीकरण भी पूर्णतः सत्त्यापन योग्य नहीं है औà....