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2022 (7) TMI 682 - AT - Income TaxRevision u/s 263 - income should have been assessed as undisclosed income of the assessee, and accordingly taxed under section 115BBE and without allowing deduction of interest/remuneration paid to partners - income so disclosed was to be treated as “business income” and not as “income from other sources” - HELD THAT:- As found that there was nothing stated in either pre-amended or post-amended provisions of section 115BBE that where assessee surrenders undisclosed income during search action for relevant year, tax rate has to be charged as per provisions of section 115BBE. ITAT held that there was no finding that provisions of section 115BBE had been invoked by AO during assessment proceedings and tax rate had been charged at rate of 30 per cent on surrendered income u/s 115BBE and thus, action of AO in rectifying and increasing rate of taxation from 30 per cent to 60 per cent on undisclosed income in view of amended section 115BBE did not come within purview of section 154. ITAT accordingly held that the action of AO in invoking jurisdiction under section 154 was not legally tenable. Again, the ITAT Jaipur in the case of Sudesh Kumar Gupta [2020 (6) TMI 463 - ITAT JAIPUR] held that where while completing assessment under section 143(3), Assessing Officer did not invoke provisions of section 69, provisions of section 115BBE which were contingent on satisfaction of requirements of section 69, could not be independently applied by invoking provisions of section 154. During the course of assessment proceedings, the assessing officer had made due enquiries and was aware of the fact that assessee had disclosed the amount as “business income” in his return of income in respect of which it had claimed expenditure in relation to interest/remuneration paid to partners. After making due enquiries, AO allowed the claim of the assessee by treating the undisclosed income found during survey as assessee’s “business income” and allowing corresponding expenditure against the same in the assessment proceedings. Therefore, in light of the facts of the case and the judicial precedents on the subject as discussed above, in our view, Ld. PCIT has erred on facts and in law in invoking section 263 provisions in the instant facts, to hold that the order passed by the assessing officer is erroneous and prejudicial to the interests of the revenue. In the result, the appeal of the assessee is allowed.
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