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2023 (11) TMI 333 - ITAT DELHIApplicability of special tax rate u/s 115BBE - income surrendered in search and seizure operation u/s 132 and offered in the return of income - loose paper/document was found from the wallet of the assessee, wherein, the amount was mentioned against the noting “com trade” and when confronted assessee stated that the figures mentioned in the seized document represent profit from offline commodity trading - as per AO Assessee has calculated his tax liability on the surrendered income applying the normal rate but as income surrendered by the assessee is in the nature of unexplained money in terms of section 69A applicable rate of tax as prescribed u/s 115BBE should be applied HELD THAT:- Section 69A uses word “may”, which implies that if explanation offered by the assessee regarding source of money, bullion, jewellery or other valuable articles is satisfactory, it cannot be treated as unexplained money u/s 69A of the Act. In the facts of the present appeal, there is nothing on record to suggest that assessee’s explanation regarding the source of the income offered has either been doubted or disputed at the time of search and seizure operation or even during the assessment proceedings. Therefore, in our view, the income offered by the assessee cannot be treated as unexplained money under Section 69A of the Act. Therefore, as a natural corollary, section 115BBE of the Act would not be applicable. Section 115BBE of the Act is applicable where the total income includes any income referred to in sections 68, 69A, 69B, 69C or 69D and reflected in the return of income under Section 139 of the Act. Secondly, if the income determined by the Assessing Officer includes any income referred to, in sections 68, 69, 69A, 69B, 69C or 69D, if such income is not covered under the first condition. In the facts of the present appeal, admittedly, assessee has not offered the income u/s 69A - Even, AO has not made any separate addition under Section 69A - He has merely re-characterized the nature of income offered by the assessee. Thus, in our considered opinion, the provisions of sections 115BBE would not be applicable to the facts of the present appeal. Decided in favour of assessee.
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