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2023 (12) TMI 134 - ITAT VISAKHAPATNAMTreatment to income Declared under IDS-2016 - character of the income - undisclosed income U/s. 68 r.w.s 115BBE OR capital gains - as in “Statement of undisclosed income” the assessee has declared an amount as income from capital gains - treatment of the capital gains as undisclosed U/s. 68 r.w.s 115BBE of the Act and levying a higher tax rate of 60% - HELD THAT:- As per section 197(b) of IDS, 2016 where the assessee fails to pay the tax as per the income declared under IDS, 2016 the undisclosed income shall be chargeable to tax in the previous year in which such declaration is made. We find force in the argument made by the Ld. AR that non-payment of tax under the IDS, 2016 against the income declared cannot change the character of the income declared under IDS, 2016 with respect to character of income assessable in the previous year in which such declaration was made under the Income Tax Act, 1961. In response to the show cause notice assessee has submitted its reply stating that it was the capital gains which was declared under the IDS, 2016 after availing the deduction U/s. 54F of the Act. These facts were not disputed by the Ld. Revenue Authorities. AO while framing the assessment has stated the same as undisclosed income U/s. 68 r.w.s 115BBE of the Act instead of taxing the same under capital gains. Merely because the assessee failed to discharge the tax liability under IDS-2016 as declared cannot change the character of the income under which it was declared under the IDS-2016. Further, IDS-2016 is also silent on the nature of income to be taxed in the event of failure by the declarant to pay the taxes. Thus the income of the assessee shall be taxed as capital gains in the hands of the assessee we therefore direct the Ld.AO to compute the taxes applicable with respect to capital gains disclosed by the assessee. Appeal of assessee allowed.
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