TaxTMI 
TaxTMI 
2025 (4) TMI 2303
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....he same as income from other sources. 2. The assessee craves your indulgence to add, amend or alter all or any grounds of appeal before or at the time of hearing." 2. The brief facts of the case are that the assessee is an Individual, engaged in the business of trading of grains, oilseeds, pulses in the name and style M/s. Devkinandan Bhagwati Prasad, Kota. A survey action under section 133A was conducted on 08.03.2018 in the case of assessee Shri Bhagwati Prasad Khandelwal. During the course of survey, a Superfine Note Book was found and impounded. On perusal of the Note Book, the AO noticed that the assessee has given loans of Rs. 63,73,000/- to various debtors during the year and the assessee had accepted in his statement recorded during survey proceedings that these debtors were not recorded in regular books of accounts of the assessee. Further, cash of Rs. 7,52,000/- was also found in excess in his possession. During the survey proceedings, the assessee had surrendered undisclosed income of Rs. 63,73,000/- on account of unaccounted/unexplained debtors and Rs. 7,52,000/- on account of excess cash. Subsequently, before filing of the return of income, the assessee acc....
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....e assessee but could not found it acceptable. The AO completed the assessment under section 143(3) at a total income of Rs. 1,01,66,570/- vide assessment order dated 29.04.2021. However, while completing the assessment under section 143(3) of the IT Act, 1961, the AO considered the income of Rs. 71,25,000/- (Rs. 63,73,000 + Rs. 7,52,000) under the head "Income from other sources" instead of "Income from business and profession" as per provisions of section 69 and 69A of the IT Act, 1961 respectively and charged tax as per provisions of section 115BBE of the IT Act, 1961 on the income of Rs. 71,25,000/- (Rs. 63,73,000 + Rs. 7,52,000).Aggrieved by the order of AO, the assessee preferred appeal before the ld. CIT(A). The ld. CIT(A) considered the submissions of the assessee but being not convinced with the submissions, dismissed the appeal of the assessee. Now the assessee has filed the present appeal before the Tribunal on the grounds mentioned herein above. 3. Before us, the ld. A/R of the assessee reiterated the submissions as were made before the ld. CIT(A) and further submitted his written submissions, which are being reproduced hereunder :- " It is submitted that ....
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....00) under the head "business income". In view of this position, which is supported by various case laws quoted below, the assessee submits that the source of Rs. 71,25,000/- advanced to various persons and the cash found in excess is business income, on which only regular rates of tax is applicable. The same is not required to be subjected to tax as per provisions of Sec. 115BBE. The following decisions of the Hon'ble ITAT, Jaipur Bench are cited, where the issues involved are identical and the ratio of the decision is fully applicable to the facts of the case of the assessee. (1) Mahesh Kumar, Prop. Bhagwansahai and Sons, Station Road, Rajgarh, Alwar. I.T.A. No. 502/JPR/2024 A.Y. 2018-19 dated 27.11.2024. (2) Dharamchand Jain, Ratnagiri Shopping Centre, Subhash Bazar, Tonk. I.T.A. No. 84/JPR/2024 A.Y. 2017-18 dated 10.04.2024. The assessee further quotes decisions of other High Courts/Tribunals in support of the submissions :- (1) CIT vs. Mhaskar General Hospital ITA No. 1474/2009 order dated 9/8/2011 Gujarat High Court The Hon'ble Court held that when the assessee's sole business was that of running a hospital and it had no ot....
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....e, the Hon'ble ITAT upheld the decision of CIT(A) holding as under :- "..The AO has not disputed the fact that the appellant firm had made proper entry in the books of accounts of Rs. 67,51,994/- being additional income declaring showing the excess stock of Rs. 62,86,624/- and excess cash found Rs. 3,09,370/- and renovation expenses of Rs. 1,56,000/- during the course of survey asd income from business and part of the book profit as included under the business head accordingly and reflected in the audited Profit and Loss account also. If the AO was of the view that the explanation furnished by the assessee firm regarding excess stock found, excess cash found and renovation expenses which represented business income of the current year, was found to be not acceptable or untrue, the AO should have given reason to dispute the assessee's version as to the source being other than business income. No material has been brought on record either by the survey party or by the AO to disprove the appellant's contention regarding the only source of the firm being business income. It has not been brought out on record that the appellant firm is doing some other activities from which suc....
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....edom to account for the same before filing the return of income and this is what the assessee has done. Having included the surrendered income of Rs. 71,25,000/- in his return of income, the assessee has come clean. Therefore, the provisions of Sec. 115BBE are not attracted in the case of the assessee. The following case laws are quoted in support :- (1) DCIT vs.Dr. Satish B. Gupta 2011 49 DTR (Ahd) Trib. 262 (2) CIT Vs. SAS Pharmceuticals 335 ITR 259 (Delhi HC) In the aforesaid decisions, it has been held that penal provisions are applicable with reference to return of income. Penal provisions cannot be made applicable on the ground that if there had been no survey, the assessee would not have disclosed the income or would have succeeded in concealing the income. It has been held in these decisions that there cannot be any penal action on surmises, conjectures and possibilities. The ratio of these decisions is applicable to the facts of the case of the assessee. The income surrendered during the course of survey has been disclosed by the assessee in the return of income. After disclosure of the income in the return of income, there remains no unexplained....
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....it and loss account and the same also found included as part of the closing stock amount to Rs. 1,94,42,569/- in the profit/loss account since the said stock of rice was not sold out. In addition to the purchase and the closing stock, the amount of RS. 70,04,814/- also found credited in the profit and loss account as income from undisclosed sources. The net effect of this double entry accounting treatment is that firstly the unrecorded stock of rice has been brought on the books and now forms part of the recorded stock which can be subsequently sold out and the profit/loss therefrom would be subject to tax as any other normal business transaction. Secondly, the unrecorded investment which has gone in purchase of such unrecorded stock of rice has been recorded in the books of accounts and offered to tax by crediting the said amount in the profit and loss account. Had this investment been made out of known source, there was no necessity for assessee to credit the profit/loss account and offer the same to tax. Accordingly, we do not see any infirmity in assessee's bringing such transaction in its books of accounts and the accounting treatment thereof so as to regularise its books ....