TaxTMI 
TaxTMI 
2023 (10) TMI 548
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....have been initiated on wrong assumption that the business income surrendered at the time of survey was liable to be added back under section 68/69/69A/69B/69C of the Act whereas the assessee is not keeping regular account books and is filing income under section 44AD. 2. That the Pr. CIT himself was not confirmed as to which section out of 68/69/69A/69B/69C was applicable as such treating the order passed by the AO is erroneous and prejudicial to the interest of the revenue is wrong, illegal and uncalled for. 3. The surrendered income was business income and had rightly been assessed by the AO. Reference has been made to the following judgments: Lovish Singhal & Others Vs. ITO & Others (2018) 53 CCH 250 Jodh Trib. ACIT Vs. One En....
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....marginal rate of 60% as prescribed u/s 115BBE on the surrendered income. Undisputed facts are that in this case the assessee had surrendered cash of Rs. 30,00,000/- during the course of survey proceedings and offered it for tax as normal business income. The AO did not treat this amount as deemed income under any of sections 68/69/69A/69B/69C and charged tax u/s 115BBE. For the sake of clarity the relevant finding in the assessment order is reproduced hereunder: "3. A survey operation u/s 133A of the Income Tax Act, 1961 was carried out on the business premises of the assessee on 17-08-2016. During the course of survey proceedings, certain loose documents were found and impounded on the basis of which the assessee declared an additional i....
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....s and prejudicial to interest of revenue. Consequently, a show-cause notice u/s 263(1) was issued to the assessee. 6.2 In reply to the above show cause notice, the Ld. Counsel of the assessee mainly submitted that during the course of survey, few discrepancies were found in respect of cash & advances to employees and etch which were business assets and the assessee surrendered an amount of income of Rs. 30,00,000/- from business in addition to regular income to buy peace of mind only. The Ld. Counsel of the assessee also submitted that the assessee had disclosed income during survey was from business only and stated that since the assessee was not required to maintain account books as such section 69A was not applicable against the asses....
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....ue, in as much as the A.O. should have conducted detailed enquiries on the above issues, which he clearly failed to do." 5. From the finding of the learned Pr. CIT it is clear that he also did not specify a specific provision under which the AO should have treated the surrendered amount. In the letter submitted before the AO dated 17.08.2016 it is stated that during the course of survey some documents pertaining to advances and recoveries were found at the business premises. It was stated that at that point of time the assessee was not in a position to explain those entries as he was not keeping books of account. However, to buy peace of mind and to avoid litigation the assessee surrendered an amount of Rs. 30,00,000/- over and above his ....