TMI Blog2020 (11) TMI 1110X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment. When there are two possible views and one of the possible view is taken by the AO, the CIT is not permitted to substitute his view to tax the assessee at higher rate by applying the provisions of section 115BBE of the Act in the proceedings u/s 263. As decided in Spectra Shares and Scrips (P) Limited [ 2013 (6) TMI 173 - ANDHRA PRADESH HIGH COURT ] merely because of difference of opinion, Pr.CIT cannot invoke his powers u/s 263. Once the Assessing Officer had taken a conscious decision and acted in accordance with law and made the assessment, the same could not be branded as erroneous by the Commissioner, simply because according to him, the Assessing Officer should have made further enquiries - See G.V.R. Associates. v. Income-tax Officer, Ward-1(3), Vijayawada. Thus we hold that there is no case for revision u/s 263 made - Decided in favour of assessee. - Shri V. Durga Rao, Judicial Member Shri D.S. Sunder Singh, Accountant Member For the Appellant : Shri M.V. Prasad, AR. For the Respondent : Shri D.K. Sonowal. CIT, DR. ORDER PER SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER : This appeal is filed by the assessee against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot acceptable and accordingly viewed that the excess stock found during the course of search declared as additional income required to be taxed as undisclosed investment u/s 69 and thus, the same required to be taxed @60% as provided u/s 115BBE of the Act. The Ld.Pr.CIT relied on the following decisions to hold that undisclosed stock required to be taxed as unexplained investment u/s 69 of the Act. i) Sanjayson of Dwarakadas Jajoo Vs. CIT (2006) 154 Taxmann 101 (MP) ii) Ramanlal Kacharulal Tejmal Vs. CIT (1994) 146 ITR 368 (Bom) iii) B.T. Steel Ltd., Vs. CIT (2010) 328 ITR 471 iv) Fakir Mohmed Haji Hasan Vs. CIT (2001) 247 ITR 290 (Guj) v) Dhanush General Stores Vs. CIT (2011) 339 ITR 651 value of unexplained investment (stock) assessable to Income Tax u/s 69 2.2. Accordingly, the Ld.Pr.CIT revised the assessment order, directing the AO to tax the income @60% on excess stock of Rs. 7,60,53,000/- u/s 115BBE of the Act. 3. Against which the assessee is in appeal before this Tribunal. During the appeal hearing, the Ld.AR argued that excess stock found during the course of search is business income as held by various High Courts. Further, the assessee submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Range) u/s 153D of the Act which fortifies that the view of the assessee was approved by the Jt. CIT also u/s 153D. Therefore, argued that once, the AO has considered the issue and taken a conscious decision on a particular view, the same cannot be disturbed by substituting with the opinion of Pr.CIT which tantamount to difference of opinion. The Ld.AR submitted that on difference of opinion, revision u/s 263 is not permissible, hence requested to set aside the order of the Ld.Pr.CIT and allow the appeal of the assessee. 4. Per contra, the Ld.DR argued that during the course of search u/s 132, excess stock was found and the same required to be assessed as unexplained investment u/s 69 of the Act. Once the excess stock required to be assessed as unexplained investment u/s 69 of the Act, it is mandatory on the part of the AO to apply section 115BBE of the Act. Since the AO has applied the normal rates the assessment made by the AO u/s 143(3) dated 28.12.2018 is erroneous and prejudicial to the interest of revenue, hence, argued that the Ld.Pr.CIT has rightly taken up the case for revision u/s 263 and requested to uphold the order of the Ld.Pr.CIT and dismiss the appeal of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as income from business only. The Hon ble ITAT, Jaipur Bench in the case of Bajargan Traders, Jaipur vs ACIT Alwar in ITA No 137/JP/17 dated 17-03-2017 has held that unrecorded investment which has gone in purchase of such unrecorded stock of rice has been recorded in the books of accounts and offered to tax by crediting the said amount in the profit and loss account Had this investment been mode out of known sources, there was no necessity for assessee to credit the profit and loss account and offer the same to tax. Accordingly, we do not see any infirmity in Assessee s bringing such transaction in its books of accounts. Having said that, the next issue that arises for consideration is whether the amount surrendered by way of investment in the unrecorded stock of rice has to be brought to tax under the head business income or income from other sources In the present case, the assessee is dealing in sale of food grains, rice and oil seeds, and the excess stock which has been found during, the course of survey is stock of rice. Therefore the investment in procurement of such stock of rice is clearly identifiable and related to the regular business stock of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rawatmull vs CIT (64 ITR 593), Kolkata, It was held that where a credit entry is found in the business accounts of an assessee and the explanation as to how the amount came to be received is rejected by the income-tax authorities and the amount is taken to be income from an undisclosed source, such income can be treated as business income, if the assessee has no other source of income. Relying on the facts of this case and the principles as laid down in the above cases which equally apply to the facts, Assessee has correctly treated the above income as 'income from business' and accordingly provisions of Section 115BBE are not applicable, as proposed by the Assessing Officer. Without prejudice to the above, it is submitted that provisions of Section 115BBE are not applicable as the rate of 60 per cent was brought on statue by the Taxation Laws(-Second Amendment) Act 2016 (by way of ordinance in December, 2016), whereas the search has occurred in September, 2016 in winch excess stock was found It is a settled proposition of law that any amendment which increases the tax burden of the assessee, has to be considered prospective and not retrospective The cause of ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case laws cited supra held that merely because of difference of opinion, Pr.CIT cannot invoke his powers u/s 263 of the Act. For the sake of clarity and convenience, we extract relevant part of the order of the Hon ble Andhra Pradesh High Court in para No. 59 which reads as under : 59 . The contention of the Revenue that the Assessing Officer had not applied his mind to the material on record cannot be accepted because the respondent in his order dated 31.03.2011 specifically records a finding at Para 5.1 that there is application of mind by the Assessing Officer. The Revenue cannot raise a plea which is not contained in the order of the respondent and is contrary to it and to the record. The contention of the Revenue that there are no reasons given by the Assessing Officer about the nature of activity of the assessee cannot be accepted because a query was raised by him in the course of the assessment proceedings and was replied by the assessee. Obviously, he was satisfied with the explanation of the assessee and therefore did not think that the issue needs to be specifically mentioned. It is settled law that the Assessing Officer in the assessment order is not r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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