TaxTMI 
TaxTMI 
2023 (8) TMI 1683
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.... 115BBE of the I.T. Act. 3. Facts of the case, in brief, are that the assessee is an individual and derives income from salary, commission, house property and other sources. A search and seizure action u/s 132 of the Act was conducted in the case of M/s. Subhagraha Projects (India) Pvt. Ltd along with its group companies and connected concerns/individuals on 5.10.2018 during which the case of the assessee was also covered. The assessee filed his return of income u/s 139(1) of the Act for the A.Y 2019-20 on 31.08.2019 declaring total income of Rs. 1,14,7,060/- including an amount of Rs. 24.00 lakhs which was offered as additional income in course of search. The assessee had also returned an amount of Rs. 80,000/- towards agricultural income and Rs. 3,40,774/- as exempt income. 4. During the course of assessment proceedings, the Assessing Officer observed that total gold jewellery weighing at 3239 grams including gold jewellery pertaining to his other family members was found. The assessee could not submit any relevant documentary evidences in support of ownership of the gold jewellery found in the bank locker and at his residence. Therefore, the excess gold jewellery weighed a....
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.... same as unexplained u/s. 69A and taxed the same according to the provisions of 115BBE of the Act. Thus, the core issue under consideration is the taxation of the additional income of Rs. 24,00,000/- admitted during the Search i.e. whether the said income is to be taxed as per normal rates of tax or special rate of tax as per 115BBB, as applied by the Assessing Officer. The appellant during the course of appeal proceedings, contended that his family members for the purpose of computing the eligibility of possessing gold jewellery are 12 in number, 6 males and 6 females and as per the Instruction no. 1916 of the CBDT, the family members are eligible to hold more gold than the gold jewellery found in the residence of the appellant. The appellant written at length about the holding the permissible gold jewellery and contending that the additional income cannot be made as unexplained jewellery etc. and the appellant has also relied on some case laws regarding the gold jewellery holding. It is important to look at the statement of the appellant recorded on 01.12.2018, in this context, as the admission was made by the appellant vide the said statement. The relevant part....
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.... the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year." In the present case, the appellant admitted an amount of Rs. 24,00,000/- as Income from other sources. The onus lies on the appellant to prove that said the nature and source of such income as mandated in the section above and the failure on part of the appellant automatically classifies the income under the said section. The appellant has not furnished any explanation, either during the assessment proceedings or during the appeal proceedings, as to how such income would have been earned or to what sources that income would be. attributed to. In the absence of any bonafide explanation from the appellant, the additional income admitted in the return of income would continue to be unexplained and nothing is on record to treat the same as the income otherwise. Therefore, in view of the above, the additional income admitted in 1 the return of Rs. 24,00,000/- attracts the provisions of Sec. 69A of the Act in the absence of any bonafide explanation and the action of the A....
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....ditional income of Rs. 24.00 lakhs u/s 69A r.w.s. 115BBE. 9. We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned CIT (A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us by both sides. We find during the course of search operation u/s 132 of the I.T. Act in the case of the assessee, cash of Rs. 4.00 lakhs and total gold jewellery of 3239 gms were found. Out of the total gold jewellery, the jewellery weighing 1390 gms was determined as excess after considering the relevant guidelines of the CBDT. In the statement recorded u/s 132(4) the assessee declared an amount of Rs. 1.00 crore as additional income in his hands and in the hands of his family members and accordingly admitted an additional income of Rs. 24.00 lakhs in his return of income and filed the return of income admitting total income of Rs. 1,14,75,060/-. Although the Assessing Officer has accepted the return of income declared at Rs. 1,14,75,060/-, however, he treated the amount of Rs. 24.00 lakhs as unexplained gold jewellery u/s 69A of the I.T. Act and brought the same to tax under the provisions of sec....
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..... Here the assessee has challenged the order of the learned CIT (A) in confirming the action of the Assessing Officer in taxing the additional income declared of Rs. 21.00 lakhs at special rate u/s 115BBE. Since we has already decided the appeal in ITA No. 175/Hyd/2023 and has held that although the amount can be brought to tax, however, the provisions of section 115BBE are not applicable. Following similar reasonings, the grounds raised by the assessee in the impugned appeal are allowed. ITA No. 177/Hyd/2023 Sri Vallabhaneni Srinivas Chowdary 15. Although a number of grounds have been raised by the assessee, however, these all relate to the order of the learned CIT (A) in confirming the action of the Assessing Officer in taxing the additional income of Rs. 35.00 lakhs declared during the course of search under the provisions of section 69B r.w.s. 115BBE. 15.1 After hearing both sides, we find the assessee in the return of income filed u/s 139(1) on 31.8.2019 declared total income at Rs. 98,03,260/- which included an amount of Rs. 35.00 lakhs offered as additional income during the course of search. The Assessing Officer during the course of assessment proceedings noted th....
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....o prove the nature and sources of such income. It is the submission of the learned Counsel for the assessee that the admission of additional income was not relevant to the seized material but put to an end to the litigation in respect of the search issues as a whole. It is his argument that the additional income admitted at Rs. 35.00 lakhs may at best be treated as income from other sources u/s 56 of the I.T. Act and taxed as such but definitely not u/s 69A r.w.s. 115BBE. It is also his argument that there was neither any unexplained investment nor any unexplained expenditure or any unexplained asset found during the course of search. Therefore, the surrender of Rs. 35.00 lakhs can be said to have been offered to cover up the discrepancy in respect of likely disallowance, if any. 21. Apart from the cash of Rs. 7.00 lakhs found during the course of search, we find no other incriminating material has been found nor any unexplained investment or unexplained expenditure or unexplained asset were found. Under these circumstances, merely because the assessee has admitted total income of Rs. 35.00 lakhs which includes cash found of Rs. 7.00 lakhs, the provisions of section 69A/69B/115B....
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....s been released to you and the jewelry 1390 grams which is in excess of maximum limit is being seized. The silver articles weighing 37 KG (net) have also been released to you. Please confirm. A. I confirm that we have received back jewelry weighing 1849 grams (net) valued at Rs.91,82,510/- out of the Jewellery including precious stones found after considering the equivalent value of the Silver articles weighing 37 KGs valued at Rs. 12;20,500/-, as the same are within exemption limits as per CBDT instruction No. 1916. I confirm that the jewelry weighing to 1390 Grams (net) and valued at Rs. 40,39,700/- is seized as per the seizure valuation report dated 01.12.2018 by the approved valuer. Q. 11. On 05.10.2018 at Q. No. 6 & 7 it was sought that to produce the returns of income of your family members along with the bank account details and it was stated that the same will be produced later. Please furnish the same. Aris. The details of bank accounts and statements are already submitted by me. As the details of computation of income and the annexures of returns are not readily available now, I will produce them on 03. 12.18. Q. 12. Please furnish the details of all the movab....