TMI Blog2022 (9) TMI 1319X X X X Extracts X X X X X X X X Extracts X X X X ..... ts as those emerging out of the statement recorded from the assessee wherein the AO himself has stated the fact that the assessee earn income from agriculture and money lending business. It is an admitted fact that the source for the money lending business is agricultural income and the interest income earned by the assessee. In the light of these factual findings we see merit in the argument by the learned A.R. that the decision of the AO to make addition without invoking section 69 /69A and also initiation of penalty proceedings under Section 270A of the Act is taken consciously. It cannot therefore be said that invocation of Section 69A and consequently Section 115BBE of the Act is accidental omission by inadvertence to be termed as prima facie mistake apparent from record for the purpose of rectification under Section 154 of the Act. In the legal issue whether the addition can be termed as made u/s.69A by a rectification order u/s.154, we are of the considered view that the impugned addition whether to be made u/s.69A is highly debatable in view of the submissions made by the assessee denying ownership of the document found in the course of search. When the taxability of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoking sections 69/69A r.w.s 115BBE did not arise. (v) Because, the learned AO has invoked section 69A as well as section 271AAC with respect to the addition of Rs.9,72,500/- and therefore it is not an inadvertent omission with respect to invoke these sections with respect to addition of Rs.4,28,85,414/- so as to bring it within the scope of section 154 of the Act. (vi) Because, the learned AO has assessed the amount of Rs.4,28,85,414/- under the head, 'income from other sources' and therefore, section 115BBE cannot be invoked. 5. The grounds are taken without prejudice to one another and the Appellant craves leave to add or delete or modify or revise any ground at the time of hearing before the Hon'ble ITAT. 3. The assessee is an individual and he filed the return of income for AY 2017-18 on 25.03.2018 declaring total income of Rs.2,67,000/-. A search under Section 132 of the Income Tax Act, 1961 (the Act) was conducted on 23.09.2016 in the premises of M/s. Srinivasa Trust and in the residential premises of the assessee. The AO of the Trust after recording satisfaction that the seized assets belong to the assessee handed over the material to the AO of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 270A of the Act rather than under Section 271AAC of the Act and so the additions for undisclosed income were not under Section 69/69A of the Act, deserves to be rejected. 4.4 Although the AO has not indicated the relevant Section while making the additions; however the discussion relating to the additions itself shows that the same were on the basis of deemed income under Section 69/69A of the Act. During the search certain documents were found which showed lending of loans and earning of interest over a period of time including the year under consideration. Neither the same were recorded in any books of account of the appellant nor had he explained the same. So the additions could have been made under Section 69/69A of the Act only. There cannot be two views on this issue. Non mentioning of the Section by the AO cannot be treated as fatal to the additions. Since the provisions of Section 69/69A of the Act were applicable the tax was required to be calculated as per provisions of Section 115BBE of the Act. As the AO had not done so, it was a mistake apparent from record and the AO has correctly rectified the same. So the action of the AO is upheld and the grounds o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the books and the source for the principle and interest amount was not substantiated by the assessee and therefore the addition can be made under Sections 69 of 69A of the Act only. The learned DR further submitted that mere omission on the part of the AO to mention the section cannot take away the nature of income and the AO has rightly invoked section 115BBE for levy of tax which he missed to do in the original assessment. It is also contended by the learned DR that the AO in the rectification order is not rectifying the mistake of the nature of addition since the same is already decided to be undisclosed and what the AO has done in the rectification order is only the rate of tax which was erroneously charged in the original assessment. The learned AR therefore submitted that this correction is very much within the scope of section 154. 8. We have heard the rival contentions and perused the material on record. During the assessment proceedings the AO verified the material found during the course of search and also perused the statement recorded under Section 132(4) of the Act. It is noticed that the assessee in the statement recorded has explained the assessee receives incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. 10. We also notice that the assessee during the course assessment has denied the ownership of the loose sheets found in the course of search and has also submitted that these have already been considered in the assessment of the earlier assessment year. The AO has made the addition by relying on the fact that some additions are done in the assessment done u/s.143(3) r.w.s.148 for AY 2016-17. Therefore on the legal issue whether the addition can be termed as made u/s.69A by a rectification order u/s.154, we are of the considered view that the impugned addition whether to be made u/s.69A is highly debatable in view of the submissions made by the assessee denying ownership of the document found in the course of search. When the taxability of the addition under a specific section is a point of contention / debatable, the tax levied on the said addition cannot be said to be not debatable. It is also noticed that the Jaipur Bench of the Tribunal in the case of Sudesh Kumar Gupta (2020) 117 taxmann.com 178 dealt with similar issue with regard to invoking provisions of Section 154 of the Act for applying addition under Section 69 of the Act and held as under: - 12. It is theref ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
