TMI Blog2023 (8) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to certain undisclosed income in cash outside the books of accounts. Therefore, there is no restriction in invoking the provisions of section 69A read with section 115BBE in the instant facts. Restriction on cash transactions - In the instant facts, admittedly, a sum of 1,01,00,000/-was received by the assessee firm in cash, which was admittedly not reflected in the books of accounts. Therefore, in our considered view, the AO should have made requisite enquiries with regards to applicability of provisions of section 269ST read with section 271DA of the Act, while framing the assessment. In the instant case, evidently, no enquiries with regards to applicability of section 269ST read with section 271DA of the Act, were made by the AO during the course of assessment proceedings, when evidently it was within the knowledge of the AO that the aforesaid amount was received by the assessee firm in cash, outside the books of accounts. We are unable to accept the argument of assessee that simply if the assessee declared the undisclosed income discovered during the course of survey proceedings, as its business income (though in the instant facts, the aforesaid amount was dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be quashed. 5. The Ld. CIT erred in law and on facts in holding that the provisions of Section 269ST applies to the undisclosed income declared during the survey. The Ld. CIT failed to appreciate that A.O passed the order after proper verification of documents submitted in response to notice U/s 142(1) of the Act. The erroneous Order of Id. CIT deserve to be quashed. 6. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal. 3. The brief facts of the case are that a survey action under section 133A of the Act was carried out at the business premises of the assessee firm. During the course of survey, the assessee admitted an undisclosed income of Rs 1,01,00,000/-and Shri Ghanshyambhai Patel, working partner of the assessee firm in a statement recorded during the course of survey admitted that the above sum of Rs 1,01,00,000/-is the net undisclosed income of the assessee firm. While filing the return of income for assessment year 2017- 18, the assessee firm had shown the above undisclosed income of Rs 1,01,00,000/-under the head any other income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details of income declared by the assessee of Rs 1,01,00,000/-. Accordingly, it is not a case where there was lack of enquiry or inadequate enquiry being made by the AO during the course of assessment proceedings. Further, Department has accepted the aforesaid amount as business receipts of the assessee during the impugned year under consideration. With respect to the invocation of provisions of section 269ST, it was submitted that once the Department has accepted the aforesaid income as business income of the assessee, then there is no question of invoking the provisions of section 269ST of the Act. In support, the counsel for the assessee placed reliance on the decision of Ahmedabad Tribunal in the case of Nilaykumar Bros v PCIT in ITA Number 146/Ahd/2022, wherein it was held that excess stock discovered during the course was survey, which was reflected in the profit and loss account as part of the closing stock of the business of the assessee cannot be subject matter of 263 proceedings since various judicial precedents have held that undisclosed excess stock qualifies as business income of the assessee, and therefore, the unaccounted business turnover and the same cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firm made during the course of search. In the instant facts, admittedly certain diary noting was found and further the working partner of the assessee firm admitted to certain undisclosed income in cash outside the books of accounts. Therefore, there is no restriction in invoking the provisions of section 69A in the instant facts. In the case of B. Kishore Kumar 52 taxmann.com 449 (Madras) , the High Court held that where assessee himself stated in sworn statement during search and seizure about his undisclosed income, same was to be levied tax on basis of admission without scrutinizing documents under section 69A of the Act. Notably, the Hon'ble Supreme Court dismissed the SLP filed by the assessee in the case of B. Kishore Kumar v. DCIT 62 taxmann.com 215 (SC). In the case of Arvind Janardhan Pandey 104 taxmann.com 127 (Bombay) , a search was carried out in assessee's premises and various documents were seized including diary of the assessee was seized. As per contents of the diary, assessee was engaged in activity of ensuring admissions of students in educational institutions by paying illegal capitation fees. The assessee did not dispute contents of seized diary. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person who receives a sum in contravention of the provisions of the proposed section 269ST . The penalty is proposed to be a sum equal to the amount of such receipt. The said penalty shall however not be levied if the person proves that there were good and sufficient reasons for such contravention. It is also proposed that any such penalty shall be levied by the Joint Commissioner. 5.3 A reading of the Memorandum to the Finance Act 2012, giving the basis of introduction of the provisions of section 269ST read with section 271DA clearly envisages that the intention of the Government while introducing the aforesaid provisions was to put a curb on the generation and circulation of black money. In the instant facts, admittedly, a sum of 1,01,00,000/-was received by the assessee firm in cash, which was admittedly not reflected in the books of accounts. Therefore, in our considered view, the AO should have made requisite enquiries with regards to applicability of provisions of section 269ST read with section 271DA of the Act, while framing the assessment. In the instant case, evidently, no enquiries with regards to applicability of section 269ST read with section 271DA of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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