TaxTMI 
TaxTMI 
2024 (11) TMI 1022
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....peared before the Assessing Officer from time to time and filed the requisite details. 3. During the course of assessment proceedings the Assessing Officer noted that a survey action u/s 133A of the Act was conducted on 27.03.2017 in the business premises of the assessee at Dhayari. During the said survey proceedings, the statement of the assessee was recorded u/s 131 of the Act wherein the assessee has declared additional income of Rs. 2 crore. The same has been offered in the return of income under the head 'Income from other sources'. From the computation of income, the Assessing Officer noticed that the assessee has claimed current year loss of Rs. 86,98,901/- and has adjusted the same against the rental income of Rs. 72,170/- and the income of Rs. 2 crore declared during the survey proceedings. The Assessing Officer further noted from the Profit and Loss Account that the expenses incurred on opening stock / WIP and for development of property has been debited to the account as revenue expenditure. He, therefore, issued a show cause notice asking the assessee to explain as to why the additional income of Rs. 2 crore should not be treated as income from unexplained sources an....
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....s. Thus, the source of said cash receipts stand established and therefore, the cash amount cannot be treated as unexplained cash credit. 11. During the appellate proceedings, the appellant has reiterated the said submission. It is seen from the statement recorded during the survey that the appellant was specifically asked to disclose the details of the persons from whom such cash was received but the appellant did not disclose the names by stating that due to business compulsions, he cannot reveal the names of the persons from whom the cash was received. Thereafter, during the assessment proceedings as well as during the appellate proceedings, the appellant has not disclosed the names of the persons from whom cash was received. 12. A similar situation was dealt by the ITAT, Mumbai Bench in the case DCIT vs M/s Madhu Developers ITA No. 2372/MUM/2023 wherein the Hon'ble ITAT has held as under- 4. We have heard arguments of the Ld. Departmental Representative (DR) and perused the relevant material available on record including the paper book filed on behalf of the assessee. The issue in dispute in the case is whether the undisclosed income of Rs. 2,26,00....
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....its) cannot be considered as regular books of accounts and therefore the provisions of section 68 are not applicable to the cash receipts of Rs. 2 crores. I have considered this argument of the appellant. The appellant has claimed that the provisions of section 68 are not applicable because loose papers found during the survey operation cannot be considered as books of accounts. In this connection, the facts of the case suggest that on the basis of notings on the loose papers and admission during survey, the appellant has credited an amount of Rs. 2,00,00,000/- In his books of accounts by declaring the same as 'income from other sources. Thus, an amount of Rs. 2,00,00,000/- has been credited in the books of accounts. Now the onus of explaining the source and nature of this amount of Rs. 2,00,00,000/- is on the appellant. Since, the appellant even after specific queries, did not reveal the names of the persons from whom the cash was received, the source of this amount of Rs. 2,00,00,000/- remained unexplained. In view of these facts, the provisions of section 68 of the Act are clearly attracted. Thus, the action of the assessing officer of taxing the said amount at a higher rate....
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....cuments showing land brokerage activity. Learned I-T authorities ought to have - considered the impounded documents in their true perspective - considered oath administered survey statement - considered narrations of the impounded material and reached to the logical conclusion of normal realty related brokerage activity. 4. Appellant craves leave to add/ alter/delete/ modify, all/ any of the above grounds of appeal. 6. The Ld. Counsel for the assessee referring to the copy of the assessment order drew the attention of the Bench to para 6 of the order which reads as under: "6. In response to the above show cause notice assessee filed reply on 27.12.2019 as under 1. "Statement dated 27/03/2017: Survey u/s 133A of the ITA, 1961 was carried out at business premises of assessee and statement was recorded on 27/03/2017. As per the said statement, some specific questions were put to assessee regarding some rough notings on some stray papers Impounded during the survey. Questions relating to the same are Q. No. 9 to Q. No. 11 of the statement, wherein, details of noting regarding land dealings were enquired. Assesse....
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....d captures in the Survey action has been duly complied with. The only dispute was, with respect to rate of tax. Whereas, assessee has offered the entire additional income arising from unrecorded consideration for transfer of land, your good self is airing a view of taxing the same @ 60% along with consequential profit/loss. 1. Clear noting, with a nexus to Survey No. of the land: Moot question is, whether the said unrecorded consideration for transfer of land could be considered as an "item" falling in 30% tax bracket or in 60% tax bracket. Now, as per the incriminating impounded material, all the CHITs bear a specific Survey No. and the location (village) against the stated amounts therein. As such, it is submitted, there is enough clarity as regards the final source of irregular unrecorded consideration for transfer of land taken in CASH. 1. Non-applicability of sections 68: As a sequel, it follows, the final sources of the CASH receipts are consideration for transfer of land. Now, during AY 2017-18) only 14 R land (out of 100 R at S. No. 18) at village Narhe was sold: As such, it transpires, the sources of the unrecorded CASH receipts were "cu....
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....tion for the relevant year, it is not necessary that the tax rate has to be charged u/s 115BBE of the Act. Further, since the Assessing Officer has not pointed out any unexplained credits in the books of account, provisions of sections 68, 69, 69A, 69B, 69C and 69D are also not attracted on surrendered amount and accordingly the provisions of section 115BBE of the Act cannot be applied. 8. So far as the decision of the Mumbai Bench of the Tribunal in the case of DCIT vs. M/s. Madhu Developers vide ITA No.2372/Mum/2023 for assessment year 2018-19, order dated 28.11.2023 relied on by the CIT(A) is concerned, he submitted that the said decision is not applicable to the facts of the present case especially when the assessee in the instant case in his statement recorded u/s 131 of the Act has categorically stated in reply to question No.9 that an amount of Rs. 50 lakhs received in cash was on account of land dealing business in respect of land at survey Nos.18 and 34, similarly an amount of Rs. 1 crore was received in cash on account of land dealing business in respect of land at survey Nos.25 and 18. Further, the balance amount of Rs. 50 lakhs was also on account of cash received in....
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.... on account of land dealings which are not recorded in the books of account, therefore, the same was declared as additional income of the assessee which partakes the character of the business income and therefore, the same cannot be treated as 'Income from other sources' to be taxed under the provisions of section 68 r.w.s. 115BBE of the Act. 12. We find some force in the above arguments of the Ld. Counsel for the assessee. A perusal of the assessment order clearly shows that the assessee in reply to question Nos.9 and 11 has categorically given the details of the land with survey number etc from which he has received excess cash which was not recorded in the books of account and which was surrendered during the course of survey and offered in the tax return. Thus, the assessee has categorically stated the nature and source of income during the course of survey itself which was offered to tax in the return filed. Under these circumstances, we have to see as to whether the provisions of sections 68, 69, 69A, 69B, 69C or 69D r.w.s. 115BBE of the Act are to be attracted or not. 13. We find the Jaipur Bench of the Tribunal in the case of Hari Narain Gattani vs. DCIT (2021) 186 IT....
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.... it cannot be said that the source for the additional income remain unexplained and, therefore, the provisions of section 115BBE have no application to the present case. The ratio of the decision of the Hon'ble Rajasthan High Court in the case of Bajargan Traders (supra) is squarely applicable to the facts of the present case. The reliance placed by the ld. CIT(A) on the decision of the Hon'ble Madras High Court in the case of M/s. SVS Oils Mills (supra) have no application to the facts of the present case, inasmuch as, in the said case, no explanation as to the source of excess stock was offered, whereas, in the present case, it is undisputed fact that the additional income was derived from business. Therefore, the orders of the Assessing Officer as well as the ld. CIT(A) are reversed and direct the Assessing Officer not to tax the additional income under the provisions of section 115BBE of the Act. The Assessing Officer shall tax the additional income under the normal rate of income tax. Accordingly, the grounds of appeal filed by the assessee stand allowed." 6. This is indeed coupled with the fact that the assessee's survey statement dated 26.03.2019 [in question no.13]....