Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2023 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (7) TMI 124 - AT - Income TaxRevision u/s 263 - income offered during the course of survey - Applicable rate of tax - Normal rate of tax or such income is to be taxed u/s 115BBE - what is nature and source of income surrendered by the assessee during the course of survey? - PCIT held that the moment any income representing any excess stock/investment/receivables/cash/bullion etc is found during survey/search and not recorded at that point in time in books of accounts, the same being in nature of deemed income as mentioned u/s 68/69/69A/69B/69C etc, the provisions of section 115BBE are attracted HELD THAT:- The mere fact that survey/search proceedings have been initiated at the business premises of the assessee doesn’t mandate the Assessing officer to automatically invoke the deeming provisions and before invoking the deeming provisions, he has to call for the explanation of the assessee and only where the explanation so offered is not found satisfactory, he can proceed and invoke the deeming provisions. There is difference between the undisclosed income and unexplained income and the deeming provisions are attracted in respect of undisclosed income however, the condition before invoking the same is that the assessee has either failed to disclose the nature and source of such income or the AO doesn’t get satisfied with the explanation so offered by him and the relevant findings. In this case PCIT without taking into consideration the findings of the survey team, the documents found during the course of survey, the statement of the assessee company, the surrender letter and subsequent enquiry and examination conducted by the AO during the course of assessment proceedings has recorded a finding that the deeming provisions read with provisions of section 115BBE are applicable in the instant case. As the picture which is clearly emerging from the material available on record is the nature of surrender is excess cash arising out of his past business dealings and advance given to farmers against procurement of agriculture produce regularly dealt with by the assessee in normal course of its business and which have not been recorded in the books of accounts. Where the assessee has subsequently recorded the same in his books of accounts as part of business income, it cannot be said that the said action on part of the assessee is not in accordance with accepted accounting methodology and the nature of such income is other than business income. Deeming provisions are not applicable in the instant case - here a different point of view has been expressed by the ld PCIT though without any corroborative evidence, in any case, the same doesn’t lead to the conclusion that the view taken by the Assessing officer as erroneous as the AO has taken into consideration the entirety of facts and circumstances of the case, the explanation offered by the assessee during the course of survey regarding the source of such income and thereafter, has assessed the income under the head “business income”. The view so taken by the Assessing officer is after due application of mind and therefore cannot be held as unsustainable in the eyes of law. Given that deeming provisions are not applicable in the instant case and consequently, normal tax rate are applicable and the tax rate as per section 115BBE, which is contingent on invocation of deeming provisions, doesn’t arise. Decided in favour of assessee.
|