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2022 (11) TMI 126 - AT - Income TaxCorrect head of income - Addition u/s 69B v/s business income u/s. 28 - whether the income on account of excess stock found during survey, which is admitted, is assessable as business income u/s. 28, or as income from an undisclosed source u/s. 69 (69B)? - head of income under which the amount represented by excess, i.e., with reference to the assessee’s books of account, stock-in-trade, is liable to be assessed, assumes significance as the tax rate for the unexplained income is chargeable u/s. 115BBE, which is @ 60% w.e.f. 01/04/2017 - HELD THAT: - The tax rate being in respect of incomes which are imputed with reference to a transaction/s, it is possible to administer the same, another aspect of the matter that stands considered by us. That is, a tax rate for transactions made up to 14/12/2016, and another for those thereafter. Subsequent mention of the applicability of the amended provisions of ss. 271AAB and 271AAC with reference to the date on which the Presidential assent to the Act is received, further corroborates this view, which is based on the clear language of the Amending Act, as well as the principle that a substantive amendment is to be generally prospective. We draw support from the decision in Vatika Township Pvt. Ltd. [2014 (9) TMI 576 - SUPREME COURT] reiterating the settled law of the rule against retrospectivity. The tax rate applicable to the impugned income would, therefore, be at 30%, i.e., the rate specified in sec. 115BBE as on 30/11/2016, the date of the surrender of income per statement u/s133A (PB-1, pgs.35-44). This, it may be noted, is also consistent with our view that the income is liable to be assessed u/s. 69B. Addition u/s. 68 - The assessee has deliberately kept the two transactions apart, and the same stand divulged only now. Rather than providing credence, the same debilitates the assessee’s case, clearly suggesting of there being something more to the transaction than meets the eye. Could the same be under circumstance regarded as proved or as satisfactorily explained? To our mind, surely not; the genuineness of the transaction, even the purpose of which stands not explained at any stage, being highly suspect. The excess stock found at survey seemingly suggest of the assessee’s accounts as not reflecting the true state of affairs. It could be a case under-invoicing, as the ld. CIT(A) says, albeit without any material to exhibit the same, which fact was confirmed by us with Shri Bardia during hearing. As it appears to us, then, Rs. 24 lacs represents the on-money on sale of duplex flat to the creditor, who had paid the same in absence of availability of cash. The same was accordingly repaid to him in toto, in March, 2017, subsequent to the sale, on receipt of cash. Assessee, in view of the foregoing, abysmally fails on Revenue’s Gd. 1. We, accordingly, have little hesitation in, vacating the findings by the ld. CIT(A), uphold, in the facts and circumstances of the case, the addition for Rs. 24 lacs and, further, u/s. 68. There is also no scope for telescoping inasmuch as the cash receipt to the assessee, as inferred by us, arises in March, 2017, i.e., after the date of survey on 29/11/2016. The credit entry that is unexplained being in October, 2016, the same being liable to tax u/s. 115BBE, shall yet be at 30%, as opined by us at para 4.2 of this order. Revenue’s appeal is partly allowed.
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