TaxTMI 
TaxTMI 
2025 (3) TMI 1975
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....ources, has been treated as income deemed to be income under section 69A of the Act and consequently taxed the same at higher rate of 60% us 115BBE of the Act. Your appellant submits that on the facts and circumstances of the case and in law, the deeming provisions of Section 69A of the Act are not applicable. 2. The Ld. Commissioner of Income Tax (A)-48, Mumbai failed to appreciate that appellant has not offered the income of Rs. 1,40,00,000/- under section 69A of the Act also the AO has not made any separate addition under Section 69A of the Act and therefore merely re-characterization of the nature of income offered by the appellant does not attract the provisions of sections 115BBE of the Act. Your Appellant submits that treating the income of Rs. 1,40,00,000/- as income deemed to be income under section 69A r.w.s 113BBE of the Act is wholly unjustified, improper, bad in law and deserves to be quashed. 3. On the facts and circumstances of the case and in law learned Commissioner of Income Tax (A)-48, Mumbai erred in not accepting the submission made by the appellant in the course of appellant proceedings that commission and brokerage income earned dur....
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.... lying at the aforesaid office. 3.1. Accordingly, a warrant u/s. 132 of the Act was issued by PDIT(Investigation), Panaji and was executed upon the assessee at the business premises belonging to entity M/s. Swapna Developers, T-15, Osia Mall, 3rd floor SGPDA Market Complex, Margoa, Goa on 10.04.2018 and gold weighing 4,525.92 grams valued at Rs. 1,32,79,048.80 was found and seized. This gold was found from a almirah in the office of M/s. Swapna Developers at the above address in the presence of the assessee who happens to be the managing partner in the said firm and the same was valued at Rs. 1,32,79,048.80 by Shri Vivek Jain, a government approved valuer, excluding making charges of the seized ornaments. 3.2. Assessee is found to have filed his regular returns of income from his Mumbai address, although his business was conducted in Goa. Accordingly, the case was centralised to the undersigned vide Centralisation order No. CCIT (Central)-1/Centralisation/2018-19 dated 27.03.2019. 3.3. Assessee filed his return u/s. 139 on 05.10.2018 reporting total income at Rs. 2,86,97,720/-. Notice u/s. 153A was issued on 05.02.2020 and duly served upon the assessee Thereafter, assessee....
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....mmission income earned during the year, Assessment Year 2018-19. 4.2. After considering the statement of the assessee recorded during the course of search and both the returns filed by the assessee, i.e., u/s. 139(1) as well as pursuant to notice u/s.153A, ld. Assessing Officer observed that unaccounted jewellery weighing 4525.92 grams valued at Rs. 1,32,79,048.80 belongs to assessee as personal asset and represents unaccounted/undisclosed investment at the time of search. He also noted in para - 8 that income offered amounting to Rs. 1.40 crores is more than the value of jewellery seized on which assessee has paid the required tax along with interest on or before the specified date. He took note of the fact that assessee has furnished the income-tax return for the specified previous year, i.e., Assessment Year 2018-19 declaring the undisclosed income on or before the specified date. Ld. Assessing Officer also observed that assessee is required to prove with evidence from whom the cash was received towards commission and brokerage income. According to him, since no books of accounts were maintained, merely stating income is generated out of commission and brokerage do not suffic....
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.... of Hon'ble Supreme Court in the case of Sumati Dayal Vs. CIT(A) [1995] 214 ITR 801 (SC). 4.6. In the conclusion, ld. Assessing Officer noted in the para as reproduced below: "......assessee purchased jewellery amounting to Rs. 1,40,00,000/- and failed to explain satisfactorily the source of this cash receipts. Accordingly, this purchase of jewellery amounting to Rs. 1,40,00,000/- so credited is deemed to be the income of the assessee for A.Y. 2018-19 under Section 69A of the Act. The assessee has offered the income as income from other sources offering to tax at the maximum marginal rate of 30%. But since the income offered falls as per the provisions of section 68 and 69A, the total Income assessed is taxed u/s 115 BBE of the Act at the rate of 60%." 5. Before the ld. CIT(A), submissions already made were reiterated. After considering the same, ld. CIT(A) confirmed the action of ld. Assessing Officer and dismissed the appeal. Aggrieved, assessee is in appeal before the Tribunal. 6. Before us, ld. Counsel for the assessee asserted that year of search is Assessment Year 2019-20, since the date of search is 10.04.2018. The year under consideration in the presen....
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....reby he has categorically noted that regular business activity of the assessee is none other than real estate development and the ancillary income earned also, revolves around his own business activity and cannot be culminated out of business or professional income. Ld. Assessing Officer thus, concluded that income from commission and brokerage is not an income to be excluded from the head "business and profession" and so cannot be included in the "income from other sources". 6.2. According to the ld. Counsel, addition made by applying provisions of section 69A is not sustainable in the year under consideration, i.e. Assessment Year 2018-19, since the impugned gold ornaments were found and seized in the course of search conducted on 10.04.2018 for which the relevant Assessment Year is 2019-20. 6.3. Also, case of ld. Assessing Officer of re-characterizing the income already offered by the assessee in his both, original return filed u/s.139(1) and in the return in response to notice u/s.153A by applying the provisions of section 68 and 69A, to bring it under the provisions of section 115BBE for subjecting it to higher rate of tax at 60% is not tenable. The basis adopted by ld. ....
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.... from other sources" and paid applicable taxes along with interest. Against this, the value of gold ornaments found and seized in the course of search was Rs. 1,32,79,048.80. This income was also reported in his return filed u/s.153A. 7.2. We find that observations made by ld. Assessing Officer as noted above, treats the activity undertaken by the assessee in the nature of adventure and falls within the purview of section 28. He has also observed that earning of this income is ancillary to the regular business activity of the assessee in real estate development and therefore it cannot be excluded from the head "business and profession" so as to report in the head "income from other sources". It is merely on the preponderance of human probability and in absence of adequate documentary evidences, by applying the decision of Hon'ble Supreme Court in the case of Sumati Dayal (supra), ld. Assessing Officer has treated the income so offered, as income u/s.69A, applied for purchase of jewelry by holding that assessee failed to explain satisfactorily the source of cash receipts. Ld. Assessing Officer has also observed in para 15, that this income has been unearthed and found only wh....