TaxTMI 
TaxTMI 
2025 (9) TMI 170
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.... of the Act. The action of the Id. ADDL/JCIT(A) in confirming the action of Id. AO is illegal, unjustified, arbitrary and against the provisions of Income Declaration Scheme, 2016. Relief may please be granted by treating the interest income as explained. 2. In the facts and circumstances of the case and in law, the Id. ADDL/JCIT(A) has erred in confirming the action of the Id. AO in treating the interest income earned on Money Lending declared under IDS, 2016 amounting to Rs. 11,01,370 as unexplained money u/s 69A of the Act, and invoking the provision of section 115BBE. The action of the Id. ADDL/JCIT(A) in confirming the action of ld. AO is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by treating the interest income as explained and liable for tax at normal rates. 3. The assessee craves his rights to add, amend or alter any of the grounds on or before the hearing. 3. Succinctly, the facts as culled out from the record are that the assessee e-filed his ITR for the year under reference on 15.07.2017 vide acknowledgment no. 875328880150717 u/s 139(1) of the Income-tax Act, 1961 (hereinafter referred as "the IT ....
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.... 6.5. Thus, in respect of the source for the sum of Rs. 11,01,370, the appellant has made a detailed submission reproduced as above, which states that, the appellant has made "market lending for a sum of Rs. 1,50,00,000 which he declared in IDS and the said amount was received from the parties along with interest and deposited in the bank account during the period from 15-10-2017 to 23-03-2017. Further the appellant claimed that the sum of Rs. 11,01,370 relates to interest for current FY which was received out of the money lending. Furthermore, the appellant has claimed that, since, the appellant has immunity to disclose name of the parties from whom the money was lent, as per Q.No.8 of FAQs circulated by CBDT vide Circular No.25 of 30th June, 2016, the appellant is not bound to disclose the names of the parties from whom the interest was received. 6.6. In this regard, the assessing officer has rightly held that, the Q.No.8 of FAQ, referred by the appellant relates to only the undisclosed asset involving property transaction where the seller of the property will not be enquired. However, in the present case it is the "cash in hand" of the appellant which has been claimed t....
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....s dismissed. 5. Feeling dissatisfied with the finding so recorded by the ld. CIT(A), the assessee preferred the present appeal before this Tribunal on the ground as reproduced hereinabove. In support of those grounds, the ld. AR of the assessee has filed a detailed written submission which reads as follows : The Assessee declared a sum of Rs. 1,50,00,000 under Income Declaration Scheme "(IDS)", 2016. The Assessee had filed Form No.1 under IDS with the following narration: Market Lending along with interest Rs. 1,50,00,000. Department accepted the VDIS and issued Form No. 4 with above narration. The Assessee had paid tax @45% on the above income declared under IDS. The declaration was accepted by the Department. The Assessee deposited the said cash in its bank account on the following dates, (the chart of which is appearing at AO page 3): S. No. Date of Deposit Amount Deposited Source 1 15.10.2016 20,00,000 Market Lending of Rs. 1,50,00,000 declared in IDS, 2016 2 24.10.2016 45,00,000 3 18.11.2016 30,00,000 4 30.11.2016 50,00,000 5 8.12.2016 5,00,000 6 8.12.2016 2,00,000 In....
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....r facts of the present case, the interest income earned, till money is finally recovered, after a short period from the said borrowers, is not a new immunity but extension of IDS immunity. [Para 6 page 11 of CIT(A)] 1.3 The human probability test was in favor of the Assessee as nobody would believe that post IDS, the Assessee waived interest. [Para 9 to 11 page 12] 1.4 It was also submitted that the explanation offered deserves acceptance and reliance was placed on the judgment of Hon'ble Supreme Court in the case of Sreelekha Banerjee v. CIT [1963] 49 ITR 112. [Paras 12 to 14 page 13] 1.5 It was also explained that Assessee having disclosed and paid taxes on Rs. 1,50,00,000 would not attempt to save differential tax of 15% on a comparatively meager sum of Rs. 11,01,370. [Paras 15 page 13] 1.6 It was also explained that Section 68 converts non-income to income and since income had already been offered for tax in Return of Income filed by the Assessee, section 69A had no application. [Para 17] It is prayed that the said submissions may please be appreciated in correct perspective at this stage. 2. The fact of Assessee opting for ....
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....on scheme till it gets realized, whether that interest income is to be considered as explained source of income or that of the undisclosed income of the assessee as it is evident and undisputed that the assessee has disclosed assets in the form of "Market lending inclusive of interest, against security of hundi, undated cheque and property document as on 31.03.2016". The purpose of the scheme was to encourage disclosure of hitherto undisclosed income. The assessee who seeks the benefit of the scheme is bound to pay tax, surcharge and penalty. Those who availed themselves of the scheme received immunity from prosecution under the Income Tax Act and the Wealth Tax Act. Certain conditions also provided immunity from the Benami Transactions (Prohibition) Act, 1988. Since the assets have been disclosed by the assessee under the IDS, 2016, therefore, disclosure scheme Rule 4 allows the assessee to file a declaration of income or income in the form of investment in any assets. Based on that set of facts, the declaration made by the assessee was accepted. In the process of receiving back those advances, which were of course in cash but the assess also receive the interest from the declared....
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....ssessee has rightly offered that interest income as regular income whereas the ld. AO considered it as undisclosed income to be taxed at a higher rate. Ld. AR of the assessee also argued that similar issue has been decided by this bench in the case of Shanti Kumar Sethi & Sons in ITA no. 332/JP/2024. 7. The ld DR is heard, who relies on the findings of the lower authorities and more particularly advanced similar contentions as stated in the order of the ld. CIT(A). 8. We have heard the rival contentions and perused the material placed on record. The apple of discord in this case is that whether the interest income received by the assessee after disclosure of an asset under in the income declaration scheme till it actually gets realized, will be taxed as explained one or be treated as "undisclosed interest income" of the assessee. Record reveals that the assessee has disclosed assets in the form of "Market lending inclusive of interest, against security of hundi, undated cheque and property document as on 31.03.2016." The purpose of the scheme was to encourage disclosure of hitherto undisclosed income. The assessee who seeks the benefit of the scheme is bound to pay tax, su....