2022 (11) TMI 195 - AT - Income Tax
Revision u/s 263 - Excessive cash of inventory - applicability of Section 115BBE - statement of the assessee recorded during the course of survey proceedings - invoking the deeming provisions u/s 69, 69A, 69B and 69C - HELD THAT:- What has occurred in the present case is that the Ld. AO has not attempted to enquire as to if the surrendered amount was actually income from business only. AO accepted the surrendered amount as assessee had filed return and paid tax upon the amount of surrender. Ld. AO on the basis of surrendered amount merely proceeded to revalue the reported quantum of sales and in that attempt escaped considering applicability of provisions of Section 115 BBE.
As apparent that during survey the information collected had nothing to do with the business turn over alone and the investments were in jewellery and properties were also disclosed. The onus was on the assessee to establish that income from the business alone was used to acquire these and to the contrary that the AO had assumed the turn over exceeded the declared turn over to justify the surrendered income in the form of property and jewellery.
Thus, there was failure on the part of the AO to accept the return of the assessee without enquiring as to if the income disclosed was actually business income only. In that way the assessment order was erroneous and prejudicial to the interest of revenue and rightly interfered by the PCIT.
In the case in hand the difference in stock inventory was merely Rs. 3,75,000/-, difference in cash inventory was 9,75,000/-, advances to suppliers were 6,35,000/- which may be considered to be having nexus with the business but the investments of Rs. 38 lakhs in the plot and Rs. 3,46,500/- in jewellery have not been examined by the ld. AO as to if they were also proceed of undisclosed sales so as to be accepted in the return of income and on the rate of tax paid or to otherwise invoke provisions of 115BBE of the Act.
ACIT has fairly directed the AO to inquire about applicability of Section 115BBE along with explanation 2 inserted by Finance Act, 2015. In the light of aforesaid discussion, the Bench is of considered opinion that impugned order does not require interference. There is no substance in the grounds. The appeal is dismissed.