TaxTMI 
TaxTMI 
2022 (12) TMI 1546
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....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. 4,00,250/-, Excess Rs. 9,88,585/- and Unexplained money advanced Rs. 1,04,38,835/- is to be assessed u....
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.... the revision-order as well as grounds of appeal, the correct figures as culled out from records is Rs. 90,50,000/- on account of unexplained advanced-money) but the assessee offered those income at normal tax and the Ld. AO too assessed at normal tax, although they were taxable u/s 69A / 69 of the act and consequently chargeable at a higher rate of tax 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. 4,00,250/-, excess-cash of Rs. 9,88,585/- and unexplained money-advanced of Rs. 90,50,000/- attracted section 115BBE or not; and consequently whether the revision-order passed by Ld. PCIT is ....
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....2319; उक्त रकम आपके द्वारा बताया गया है कि यह रकम चंदन गारमेंट से संबंधित है कृपया इसका स्त्रोत स्पष्ट करें। उत्तर- मैं आपको Chandan Garment prop. श्री नरेन्द्र कुमार शांति लाल जैन HUF की कैश बुक दिनांक 19/09/2016 को प्रस्तुत कर रहा हूँ जिसक&#....
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....6;यिक प्रतिष्ठान में आपके रूम (श्री नरेन्द्र जैन) के भौतिक सत्यापन के दौरान एक डायरी मिली है जिस को B1-1 के तौर पर नत्थी किया गया है उक्त डायरी आपको दिखाने जा रहा हूँ। इस डायरी का अवलोकन करने से पता चलता है कि विभिन्....
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.... (अक्षरी नब्बे लाख पचास हजार) की राशि मेरे HUF के द्वारा ब्याजुना दी गई है उपरोक्त राशि रु. 90,50,000/- का स्त्रोत स्पष्ट करने में मैं असमर्थ हूं। अतः उपरोक्त राशि रु. 90,50,000/- को चालू वित्त वर्ष 2016-17, कर निर्धारण वर्ष 2017-18 की अतिरिक्त आय....
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....5;ं समाहित है। प्रश्न- आज दिनांक को की गई सर्वेक्षण कार्यवाही के दौरान M/s Chandan Garments जो कि आपके HUF की प्रोपराइटी कंसर्न है से संबंधित स्टाफ का भौतिक सत्यापन किया गया जिसकी इन्वेटरी मैं आपको दिखा रहा हूँ। इस इन्वेंटरी कí....
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....ाशि पर नियमानुसार देय कर जमा कर दूंगा।" Thus, in these statements, the assessee has categorically admitted twinaspects, viz. (i) unable to explain the excess-cash / unexplained money / excess-stock; and (ii) the excess-cash / unexplained money / excess-stock is from "additional sources" or "undisclosed income". On a careful examination of statements, we nowhere find that the assessee has whispered any voice that the impugned incomes were earned from business. In fact, this is the precise reason that the Ld. PCIT has also made following conclusion and passed revision-order: "4.1 Thus, it is clear from the aforesaid statement that the surrender on account of excess cash. Unexplained money advanced as well as excess stock has been made out of unexplained sources which was never disclosed to the department. Also the cash advanced are to be treated as undisclosed investment. Nowhere the assessee submitted that this suppressed income is out of business income. Not only that it has also been clearly sta....
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....ation regarding nature and source thereof. Thus, it is quite clear that all ingredients of section 69 / 69A are satisfied. 10. At this stage, we also refer the decision of Hon'ble Co-ordinate Bench of ITAT, Indore in Rajesh Kumar Bajaj ITA No. 16/Ind/2019, order dated 09.03.2020 where an identical controversy was decided as under: "13. Let us examine the statement given by the assessee during the course of survey in reply to questions raised about the source of Excess stock, excess cash and undisclosed sundry debtors. प्रश्न 3. आपके Concern M/s R.R. Textile Mills में सर्वेक्षण की कार्यवाही के दौरान आपके द्वारा प्रस्तुत cash book के अनुसार आज दिनांक को cash Balance रु. 17413.71 दिखायì....
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....6; वचन देता हूँ। प्रश्न 5. आपके Concern पर सर्वेक्षण कार्यवाही के दौरान 13-14 उद्योग नगर, बुरहानपुर पर M/s R.R. Textile Mills के प्रकरण में भौतिक सत्यापन के दौरान कुल स्टॉक रु. 1,03,95,983/- का पाया गया है जबकि आपकी नियमित लेखा-पुस्तकों के अनुसार M/s R.R. Textile Mills क&#....
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....;ा हूँ और उस पर देय आयकर का भुगतान करने का वचन देता हूँ | प्रश्न 6. मैं आपको BI-1 राजकमल ग्रुप की डायरी दिखा रहा हूँ जिसके कुल 1 से 25 पृष्ठ लिखित है जिसे Annexure - 'B' में इंद्राज किया गया है जो आपके व्यवसायिक स्थल 13-14, उद्योग नगर, बुर&#....
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....50;ें दर्ज कुल अग्रिम की राशि रु. 7,75,000/- को मेरी प्रोपरायटरी कंसर्न M/s R. R. Textile Mills की नियमित आय के अलावा अतिरिक्त अघोषित आय मानते हुए करारोपण हेतु समर्पित करता हूँ और उस पर नियमानुसार आयकर का भुगतान करने का वचन देता हूँ। 14. Now in order to k....
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....simply stated that the assessee has incorporated the excess-cash, excess-stock and money-advanced 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 from assessment-order that the Ld. AO has not made requisite enquiry to ascertain the nature and tax implications of the impugned incomes, he has simply shut the point by saying that the assessee has incorporated incomes in ITR. Therefore, the decisions relied upon by Ld. AR do not support the assessee's stand. 13. Having said so, we now turn to Ground No. 7 wherein the assessee raises an alternative claim that the present case of Assessment-Year 2017-18 relates to the Previous-Year 2016-17 and the rate of tax u/s 115BBE was 30%+3% Cess as on first day of the Previous-Year i.e. 01.04.2016, therefore the tax-rate of 30%+3% Cess shall apply to the present case and not the higher rate, hence the assessment-order does not cause prejudice to the interest of revenue. The reason of projecting such a claim by assessee is that the higher rate of tax was prescribed in section 115BBE through an amendment made vide Taxation Laws (S....
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....e 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 apply to the assessment made in 2018-2019 (Assessment Year) of the income accrued for the previous financial year; which is 2017-2018. The learned Counsel would seek to draw a distinction insofar as a modification of the rate as brought out in the Finance Act and a substantive provision altering accrued rights or creating new liabilities, on the 1st of April of an year. In the former, it could apply to the assessments of the previous year, made in that financial year, but a substantive amendment not relating to the rates, could only be applied to the assessments of that financial year and not of the previous year. Reliance is placed on the Constitution Bench decision of the Hon'ble Supreme Court in C.I.T Vs. Vatika Township Private Ltd. (2015) 1 SCC 1. The learned Counsel would also place before us a number of decisions of the Hon'ble Supreme Court in Kesoram Industries v. Commissioner of Wealth Tax, [AIR 1966 SC 1385], Guffic ....
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....er 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 Section 155BBE provided for 30% tax on income referred to in Sections 68, 69, 69A, 69B, 69C and 69D. The same was amended by the 2nd Amendment Act; w.e.f. 01.04.2017, enhancing the rate to 60%. Hence there was no new liability created and the rate of tax merely stood enhanced which is applicable to the assessments carried on in that year. The enhanced rate applies from the commencement of the assessment year, which relates to the previous financial year. 14. Likewise it was by Chapter II with heading 'Rates of Income Tax', as provided in the Finance Act 2016, that a surcharge was introduced by way of the 3rd proviso of Section 2(9) of that Finance Act. This comes into effect from the Financial Year 2016-2017; which is the year in which the subject seizures were occasioned. The proviso refers to various provisions where the advanced tax computed under the first proviso stands increased by a surcharge for the purpose of the Union. Section 115BBE i....
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.... 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 Volume I Part I. The word surcharge was used compendiously for the special addition to taxes on income imposed in September 1931. It was held so in paragraph 7 and 8 7. The above legislative history of the Finance Acts, as also the practice, would appear to indicate that the term "Income tax" as employed in Section 2 includes surcharge as also the special and the additional surcharge whenever provided which are also surcharges within the meaning of Article 271 of the Constitution. The phraseology employed in the Finance Acts of 1940 and 1941 showed that only the rates of income tax and super tax were to be increased by a surcharge for the purpose of the Central Government. In the Finance Act of 1958 the language used showed that income tax which was to be charged was to be increased by a surcharge for the purpose of the Union. The word "surcharge" has thus been used to either increase the rates of income tax and super tax or to increase these taxes. The scheme of the Fi....