TaxTMI 
TaxTMI 
2025 (3) TMI 2211
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.... manner as:- "Considering the facts of the case, the unaccounted/unexplained debtors of Rs. 6,90,000/-, excess cash of Rs. 18,34,020/- and excess stock of Rs. 9,76,480/- offered during the survey proceedings are considered as unexplained investment, unexplained money as per provision of section 69 and 69A of the I.T. Act respectively. Therefore, tax is charged on these offered income as per provision of section 115BBE of the I.T. Act, 1961. Since, the assessed income includes income chargeable to tax as per provision of section 115BBE of the I.T. Act, 1961. Therefore, I am satisfied to initiate penalty proceeding u/s 271AAC of the I.T. Act, 1961. 4. Arguments heard. File perused. ITA No. 1445/JPR/2024 5. In this second captioned appeal, as regards the same Assessment Year i.e. 2019-20, total income of the assessee was assessed at Rs. 54,82,980/-finding that the unaccounted/unexplained debtors of Rs. 6,35,000/-, investment made in house to the tune of Rs. 13,75,000/-, unexplained excess cash of Rs. 7,52,000/- and excess stock of Rs. 7,38,670/- offered during the survey proceedings, were unexplained investment, investments, and unexplained money as per provision of ....
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....tment and excess stock were covered by the provisions of section 69, 69A and 69B of the I.T. Act respectively,, tax should be charged as per the provision of section 115BBE of I.T. Act 1961. 11. That is how, both the assessments orders were passed. 12. When the matters came up before the ld. CIT(A), the ld. CIT(A) observed in the impugned orders as under:- "Charging of Tax u/s 115BBE The appellant has also raised the issue of charging tax u/s 115BBE of the Income Tax act. The section 115BBE is charging section. The argument of the appellant are considered. The Income Tax Act is a self contained code consists of both charging and machinery sections, Charging sections are those sections by which liability is created or fixed. Machinery sections are those sections which ensure quantification, imposition and collection of tax created by the 'charging sections Thus 'Machinery Provisions' are basically subordinates to the charging section. On applying the above principles section 115BBE is categorized as 'machinery provision which is subordinate to the charging sections 68 and section 69 family. There is a very practical rule in the interpretation ....
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....cannot be said that the income so offered for taxation was covered under the provisions of Section 69, 69A and 69B of the Act or section 69 and 69A only. In support of the contentions, Ld AR relied upon decision by this Bench in the appeal titled as M/s Orthopaedics and Trauma Centre v. DCIT, ITA No.12444/JP/2024, relating to the same assessment year, delivered on 20.2.2025. 14. In the abovesaid decision by this Bench, we observed that in the case of Surendra Kumar Patni v. ACIT, ITA No. 977/JP/24, decided by the Coordinate Bench of ITAT, Jaipur, on 21.11.2024, same issue was dealt with. That was a case of survey operation u/s133A of the Act conducted on 09-08-2016 which led to physical determination of the stock of the assessee at Rs. 7,36,71,937/- as against the value of book stock arrived at Rs. 5,6,65,758/- resulting into excess stock of Rs. 1,76,06,179/-. Therein, the AO had treated the amount of excess stock surrendered during survey i.e. amounting to Rs. 1,76,06,179/- under the head ''Income from other Sources and applied Section 69 B of the Act read with Section 115 BBE of the Act. Said assessment was confirmed by ld. CIT(A). While dealing with the issue regardi....
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....ers, DB. Income Tax Appeal No.258/2017, decided by our own Hon'ble High Court has been relied on by Learned AR for the appellant. Therein, in the course of survey, the assessee had surrendered a particular sum towards investment in stock of rice, which had not been recorded in the books of accounts, but, subsequently, like the present matter, the assessee therein had shown the same in the books of accounts by way of transaction and debiting the purchase account and crediting the income from undisclosed sources. In the given situation, therein, Co-ordinate Bench of ITAT, observed that the net effect of said double entry accounting treatment was that firstly the unrecorded stock of rice had been brought on books and then same formed part of the recorded stock; that said unrecorded investment was offered to tax by crediting the said amount in the profit and loss account. In the given facts and circumstances, therein, it was held by the Coordinate Bench of ITAT that the investment in the excess stock had to be brought to tax under the head "business income" and not under the head "income from other sources". Hon'ble High Court upheld the abovesaid decision rendered by the C....