TaxTMI 
TaxTMI 
2025 (2) TMI 1907
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....A of the Act was carried out at the business premises of the assessee on 16.06.2016 and during the course of survey operation, certain discrepancies were noticed. In view of such discrepancies, the assessee came forward with a surrender of Rs. 30 lakhs for relevant assessment year 2017-18. 2.4 That vide notice under Section 142(1) alongwith annexure dated 06.12.2019 the assessee was proposed to be taxed under Section 115BBE of the Act on surrendered income of Rs. 30 lakh, contents of notice are as under : "Survey u/s 133A of Income Tax Act, 1961 (hereinafter 'the Act') was carried out at the business premises of the assessee i.e. M/s Vidya Sagar Narinder Kumar, Nabha Gate, Patiala on 16.06.2016. Several discrepancies in the books of account were noticed by the survey team. In lieu of such discrepancies, the assessee surrendered an additional income of Rs. 30,00,000/-. Vide notice u/s 142(1) along with annexure dated 06-12-2019, the assessee has been proposed to be taxed 115BBE of the IT. Act on the surrendered income of Rs. 30,00,000/- which is as under:- "Survey u/s 133A of the I.J. Act 1961 has been conducted on 16-06-2016. After that you hav....
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.... comes into the existence on 15.12.2016. But, in our case the survey has been conducted on 16.6.2016. Although, as per the amendment made in the act on 15.12.2016, provisions of Section 115BBE has been amended w.e.f. 1.4.2016. In recent judgment of Hon'ble Delhi High Court in the case of Gautam Khaitan Vs. Union of India (2019) 105 taxmann.com 276 (Delhi), the Hon'ble High Court has said that Govt, cannot exercise its power to issue notification within meaning of provisions of Section 85 & 86, prior to enactment itself coming into effect as on 1.4.2016. So, in our case the law which has been enacted on 15.12.2016 cannot be applied. Furthermore, the assessee voluntarily disclosure decision was totally based on the law that exists on the date of survey i.e. 16.6.2016. The law has been amended on 15.12.2016 with retrospective effect. An ideal tax system should be predictable certain and sustainable. Hence, retrospective implementation of Section 115BBE by the IT Department amendment is a bad move. We relied upon the decision of Hon'ble Supreme Court in the case of Karimtharuvi Tea Estate Ltd. Vs. State of Kerala 1966 AIR 1385 & Scindia Steam Navigation Company....
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....us under Section 69 of the Act. (2) Onus under Section 69A does not get discharged by simple assertion as aforesaid. Source of income must be proved conclusively. (3) Merely because survey team had not found any other source of income the assessee has sought to transfer his onus on the Revenue which cannot be allowed. Reliance was placed on judgement of Hon'ble Punjab & Haryana High Court in case of PCIT Vs Khushi Ram & Sons Food (P) Ltd. in ITA No. 126/2015 and in particular para 13 which is reproduced as below "13. It is not necessary that the surrendered amount is from business income. It could be on account of any other transaction legal or otherwise. 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. " (4) The ld. AO finally has placed reliance on very text of Section 115 BBE of the Act and has held that plain reading of Section 115 BBE mak....
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.... contentions. The ld. AR has placed on record a Paper Book containing pages 1 to 22 alongwith compilation of judgements of this Tribunal from pages 1 to 149 in support of the proposition that income so surrendered is business income and is liable to be taxed under normal rate. The ld. DR has supported the findings made in the impugned order. 4. Observations, Findings& Conclusions 4.1 We observe that it is an admitted position that survey of the assessee's premises took place on 16.06.2016 and nothing incriminating was found by the Revenue which could prove that assessee was indulging in any other kind of activity except business activity. Further on page 9 of the assessment order dated 19.12.2019 income of Rs. 30 lakhs is computed as stock in trade under Section 69. However, it has been taxed under Section 115BBE of the Act. In the impugned assessment order dated 19.12.2019 income is labeled as stock in trade, it cannot by any stretch of imagination be labeled as unexplained investment under Section 69 of the Act as surrender was mainly on account of stock in trade. Further, basis statement of Amit Bansal dated 16.06.2016 during survey, no other sources of income from other b....