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2023 (3) TMI 854 - ITAT CHANDIGARHRevision u/s 263 - nature and source of income surrendered by the assessee during the course of survey and the explanation so offered by the assessee - deeming provisions on the amount so surrendered by the assessee - Addition invoking Section 115BBE - assessee surrendered income during the course of assessment proceedings - HELD THAT:- The nature of surrendered income was difference in stock and unrealized sundry receivables generated out of out of book sales undertaken by the assessee. The factum thereof has been accepted by the Survey team lead by ld DDIT (Investigation) and thereafter by the AO during the course of assessment proceedings after due examination. AO has duly taken cognizance of the findings of the survey team, the documents found during the course of survey, the statement of the partner/director of the assessee company recorded during the course of survey, the surrender letter and the return of income, and after examination thereof and due application of mind, income has been rightly assessed under the head “business income”. Order so passed by AO cannot be held as erroneous due to lack of enquiry or for that matter, requisite enquiry on the part of the AO. Where AO after due appreciation of facts and circumstances of the case, assessed the income under the head “business income” and didn’t invoke the deeming provisions as so suggested by the ld PCIT, we do not believe that there is any error on part of the Assessing officer and the order so passed by him cannot be held as erroneous. Deeming provisions are not applicable. Where there are specific questions asked during the course of survey regarding the nature and source of income and which has been adequately responded to by the assessee and thereafter acted upon in terms of disclosing the income in the return of income under the appropriate head of income and where the same is duly examined and taken into consideration by the AO during the course of assessment proceedings, the order so passed by the Assessing officer cannot be held as erroneous in nature. Order of the ld PCIT u/s 263 is set-aside - Decided in favour of assessee. Revision u/s 263 - income so surrendered by way of account receivables - HELD THAT:- It a case where the surrender which was otherwise to be made in the hands of the partnership firm has been made and accepted in the hands of the assessee where he was a partner and the fact that such surrender was voluntarily declared in the return of income has been accepted by the AO, the order so passed by the AO may be held as erroneous in so far as the taxability in the wrong hands is concerned, however, the same cannot be held as prejudicial to the interest of the Revenue in so far as the nature of surrendered income and non-applicability of the deeming provisions read with provisions of section 115BBE of the Act are concerned and for the purposes, the detailed discussion and reasoning given supra in case of assessee equally applies in the instant case and not being repeated for the sake of brevity. In the entirety of facts and circumstances of the case, the income so surrendered by way of account receivables cannot be brought to tax under the deeming provisions u/s 69 r/w section 115BBE. In the result, the order of the ld PCIT u/s 263 is set-aside and that of the Assessing officer is sustained. Appeal of the assessee is allowed.
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