Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (8) TMI 141 - AT - Income TaxRevision u/s 263 - PCIT was of the view that a very low rate of net profit was considered by assessing officer on undisclosed business turnover of the assessee and the undisclosed income so added by the AO to the total income of the assessee, should have been treated and taxed as per provisions of section 115BBE - HELD THAT:- Assessing Officer has duly assessed the deposits in the bank account No. 2195697434 of Central Bank of India, to the tune of ₹ 95,33,717/-, treating ₹ 91,48,326/- as undisclosed business receipts/undisclosed turnover. Thereafter the assessing officer computed the margin of profit @4% of undisclosed business receipts at ₹ 3,65,933/- (that is 4%₹ 95,33,717). The AO also made addition on account of interest on saving bank account at ₹ 11,521/-.Therefore, the bank account A/c No. 2195697434 has been verified by the assessing officer One of the grounds on which the ld PCIT had exercised jurisdiction (that the net profit of ₹ 3,65,933/- considered by the Assessing officer on the undisclosed business turnover of ₹ 91,48,326/-was without any verification and proper analysis which needs to be examined properly), has been examined by the assessing officer properly. Therefore, when the order of the Assessing Officer is not erroneous, section 263 cannot be invoked to direct the Assessing Officer to hold another investigation [Infosys Technology Ltd. v. JCIT [2005 (6) TMI 211 - ITAT BANGALORE-B]. Therefore, so far this first ground is concerned, the ld PCIT was not right in exercising the jurisdiction under section 263 of the Act. AO had failed to tax the undisclosed income as per provisions of section 115BBE - whether business receipts/business turnover is taxable under section 115BBE of the Act? - HELD THAT:- As per the intention of legislature, the burden to apply section 115BBE and section 68 to section 69D of the Act rest on revenue shoulder. That burden cannot be discharged on the basis of assumption and presumption made by the assessing officer. Having gone through the section 115BBE, as noted above, we are of the view that business activity related income may not ordinarily get placed u/s 68 to section 69D. We note that assessing officer in his assessment order has also treated the undisclosed amount in bank account as undisclosed business receipts/turnover. Since, the assessing officer has applied his mind and treated the undisclosed amount in bank account as undisclosed business receipt or turnover of the assessee, therefore provisions of section 115BBE does not apply to the assessee. AO while giving appeal effect to the order of ld PCIT under section 263 of the Act, had shown the undisclosed amount of bank account under the head business income, vide order of assessing officer under section 143(3)/263 of the Act dated 28-11-2019. Our view is further fortified by the Judgment of the Coordinate Bench of Mumbai in the case of ACT Central Circle-13 Mumbai v. Rahil Agencies [2017 (2) TMI 30 - ITAT MUMBAI] wherein it was held that section 115BBE does not apply to business receipts/business turnover. Since the Department itself accepting the undisclosed amount of assessee in his bank account as undisclosed business receipts/turnover, therefore, section 115BBE does not attract here and hence order passed by the assessing officer, after application of mind, under section 143(3) dated 30-12-2016 is neither erroneous or prejudicial to the interest of revenue. PCIT has used only probability and likelihood to find the error in the assessment order which is not permitted, he ought to find out specific error in the assessment order, and guide the assessing officer, since he has failed to do so in the assessee's case under consideration, therefore order passed by the assessing officer is neither erroneous nor prejudicial to the interest of the revenue. - Decided in favour of assessee.
|