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2024 (3) TMI 721 - AT - Income TaxRectification proceedings u/s. 154 - Unexplained investment addition u/s 69 - amount as surrendered by the appellant on account of unexplained and out of books of investment in land and its subsequent sale - appellant did not establish any connect regarding how its business income has been utilized to invest in the said land or make any expenditure regarding the same, therefore, this investment is clearly unexplained as per section 69 required to be considered for taxation as per the provisions of section 115BBE HELD THAT:- As evident that the assessee has disclosed the discrepancies as income and not any asset or income allegedly undisclosed. Therefore, it is the income on account of error or omission on the part of the assessee during the business and the same view is taken by the jurisdictional high court in the case of in case of CIT vs Bajargan Traders [2017 (11) TMI 388 - RAJASTHAN HIGH COURT] where in High Court held that when the assessee is dealing in sale of food grains, rice and oil seeds and the excess stock which is found during survey is stock of rice then, it can be said that investment in procurement of such stock of rice is clearly identifiable and related to the regular business stock of the assessee. Therefore, the investment in the excess stock is to be brought to tax under head “business income” and not under the head income from other sources. Further in the case of Shri Lovish Singhal [2018 (5) TMI 1646 - ITAT JODHPUR] the Jodhpur Tribunal applying the proposition of law laid down in the Bajargan Traders (supra), held that the lower authorities were not justified in taxing the surrender made on account of excess stock and excess cash found u/s. 69 of the Act and accordingly held that there is no justification for taxing such income u/s. 115BBE of the Act. Even the similar view taken in case of ACIT vs Shri Sudesh Kumar Gupta [2020 (6) TMI 463 - ITAT JAIPUR] issue under consideration was whether rectification proceedings u/s. 154 were permissible when at the first place while passing assessment order u/s. 143(3) provisions of section 69 were not invoked for charging higher rate of tax u/s. 115BBE, wherein the coordinate bench held that the assessing officer has not invoked the provisions of section 69 at the first place while passing assessment order u/s. 143(3) and therefore, the provisions of section 115BBE which are contingent on satisfaction of requirement of section 69 cannot be independently applied by invoking the provisions of section 154 - no merit in the order passed u/s. 154 of the act and the same is quashed. Assessee appeal allowed.
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