TaxTMI 
TaxTMI 
2024 (7) TMI 1706
X X X X Extracts X X X X
X X X X Extracts X X X X
....ome of Rs. 29,59,000/- at special rate by treating the same as assessable under sections 69 and 69A of the Income Tax Act without appreciating that as per material on record and explanation filed during the assessment as well as appellate proceedings, the provisions of sections 69 and 69A are not applicable to the additional income surrendered during survey 3. Without prejudice to the above, the learned CIT(A) has erred in law as well as in facts and circumstances of the case in upholding the levy of tax at the rate of 75 percent on the surrendered income during survey on 26.09.2016 as per provisions of section 115BBE of the Income Tax Act without appreciating that the levy of tax at the enhanced rate of 75 percent was not applicable to the income earned or deemed to be earned before 15.12.2016. 4. That the learned CIT(A) has erred in law as well as in facts and circumstances of the case in upholding the levy of tax at the rate of 75 percent as per amended provisions whereas the amended provisions are applicable w.e.f. 01.04.2017, hence relevant to the assessment year 2018- 19. 5. That the appellant craves to add or amend the grounds of appeal." 3. Tho....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cable u/s 115 BBE, relying on the observation of the Hon'ble Punjab and Haryana High court in the case of CIT vs Khushiram and Sons Food P Ltd, where the Hon'ble court has observed " Merely because an assessee carries on certain business, it does not necessarily follow that the amounts surrendered by him are on account of its business transactions. There is no presumption that absent anything else an amount surrendered by an assessee is his business income . It is for the assessee to establish the source of such surrendered amount ". 6. The matter was carried in appeal before the first appellate authority, and written submissions and arguments were filed by the assessee. The Ld. CIT(A) due to reasons contained in the appeal order and placing reliance on various decisions, the applicability of section 69/ 69A and section 115BBE of the Act 61, has been sustained. 6.1 Now the assessee is before the tribunal challenging the applicability of the provisions of section 69/ 69A and 115BBE of the Act 61, to the facts of the instant case. 6.2 The Ld. AR of the assessee has filed a paper book containing 43 pages which includes the computation of income and the audited accounts for th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... total returned income of Rs.36,63,042/-, which has been accepted by the AO after examination of all books of accounts in course of scrutiny, without any variation or any adverse findings. 6.5 He further submitted that the revenue has not brought on record any evidence to prove that the assessee is engaged in any other business or activity, which can generate excess cash, other than the bakery and restaurant business carried on by the assessee, and the assessee has got no other source of income other than the regular business activity as declared in the return. 6.6 Further, the Ld. AR has filed a written synopsis, distinguishing on facts, the judgments relied upon by the Ld. CIT (A) in his appellate order, in relation to the instant case under appeal and argued that none of the decisions relied upon by the first appellate authority are applicable on instant facts to the instant case, and are hereby distinguished: "9. Further, it is hereby submitted that the Worthy CIT(A) in his appellate order dated 19.01.2024 has relied upon various judgments. In this regard, it is submitted that the facts of the judgments relied upon by Worthy CIT(A) are different from the facts of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tions that the cash found during the course of survey belong to business. However, in the instant case, the assessee has duly declared the income under head business or profession and the assessee has been engaged in the business since past many years and the surrender made by the assessee was only as business income of the assessee. And, no adverse remark has been passed by the IT Department w.r.t. the assessee being engaged in any other business. 4. Judgment in the case of Jatinder Pal Singh VS. DCIT 432 ITR 293 (Del.) The Hon'ble High Court observed that the assessee contended that the cash found and seized during search was received by him as an advance for sale of agricultural land. However, there were glaring discrepancies in the statements made by the assessee vis-à-vis the statements made by the broker and the buyer. The Hon'ble High Court observed that the explanation offered by the assessee regarding the seized cash was not satisfactory and accordingly held that the AO was justified in making addition uls 69A of the Act of the impugned amount. In this regard, it is submitted that the in the judgment quoted by the Worthy CIT(A), the facts provide....
X X X X Extracts X X X X
X X X X Extracts X X X X
....CIT vs Khushi Ram and Sons, (ITA 126 of 2015 dated 29/07/2016), relied upon by the AO in the assessment order, is also distinguishable in the sense that the assessee in the instant case has been able to prove that the cash found in the premises are arising out of the assessee business of bakery and restaurant and the source of the same has been explained to have come out of accumulated balance of regular business sales proceeds. 6.8 Thereafter, he further relied on the decision of the Chandigarh Bench in the case of Khurana Rolling Mills ITA - 745/ CHD/ 2016, where the judgment of Khusiram and Sons has been extensively discussed and the following facts has been mentioned: "i) "Para 6 page 9" of the judgments: The judgment has been quoted therein and the said issue in the case of M/s Khushi Ram & Sons have been discussed. ii) Then, the finding of the Hon'ble Bench have been discussed from para 9 at page 11, the judgment of 'Famina Knit Fab' have been discussed/analyzed and it has been mentioned therein, that in that case, the surrender was on accounted of undisclosed debtors, which was to be in the nature of business income and not deemed income. iii) T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed by the assessee and the various judicial decisions relied upon. We are of the view that provisions of section 69 and 69A of the Act 61, are attracted in cases of unrecorded transactions, whose nature and source is unexplained. In the instant case before us it is admitted fact that the assessee is carrying on a business of bakery and restaurant, which is a running business activity, and the source of income surrendered in course of survey was duly explained to have been earned out of bakery and restaurant business itself, which is the regular business activity of the assessee. Even otherwise also the revenue has not unearthed any other source of income activity other than what is disclosed by the assessee. 8.1 We find that the same is duly reflected in the income tax returns and audited balance sheet filed in normal course. In respect of the loose sheets and diaries impounded in course of survey, the same contains advances to parties and receivables from parties, which is classified under the head "Sundry Debtors". The surrender of income has been made by the assessee under the said head and the revenue has also accepted the same. On this aspect we refer to the judgment of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Gupta(supra) and followed accordingly. The ld. AR respectfully relied on the order of the ITAT Amritsar Bench in the case of Deepak Setia (supra) and Sharp Chuks and Machines (P.) Ltd (supra). The order was delivered by the same combination of the ITAT Amritsar Bench. The revenue was unable to show any other sources related to excess cash found in the survey. During statement recorded in survey the assessee clearly declared that the assessee had not made any investment in immovable property within 6 years and the entire amount of the excess cash was generated from undeclared sale of medicine. So, the source of excess cash is from business. Therefore, we are setting aside the impugned appeal order. Accordingly, the application of section 115BBE an amount of Rs.7,12,805/- is bad in law. Hence, the assessee will be assessed related to excess cash under normal rate of tax not U/s 115BBE of the Act." 9. In the instant case before us, we find that the facts are identical, to the above case decided by the coordinate Amritsar Bench, and we find that in the instant case the assessee has explained from the very first day that the excess cash found, is out of business sales of bakery and ....