TMI Blog2023 (5) TMI 1279X X X X Extracts X X X X X X X X Extracts X X X X ..... 115BBE, provision of which came into force only on 01.04.2017, is not sustainable. Therefore, we allow the appeal of the assessee. - Shri Pawan Singh, JM Dr. A. L. Saini, AM For the Appellant : Shri Vartik Choksi and Biren Shah, AR For the Respondent : Shri Ashok B. Koli, CIT(DR) ORDER PER DR. A. L. SAINI, AM Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2017-18, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals)-4, Surat [in short the ld. CIT(A) ] in Appeal No. CIT(A)-4/10551/2018-19, dated 28.12.2021 which in turn arises out of an assessment order passed by the Assessing Officer under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) dated 28.12.2018. 2. Grounds of appeal raised by the assessee are as follows: 1. In law as per facts and in the circumstances of the assessee case, the Hon'ble CIT(A) has erred in upholding the view of the Id. A.O. relating to the amendment to section 115BBE which was made vide The Taxation Law (Second Amendment) Act, 2016 dated 15.10.2016 while the search operation was conducted on 16.08.2016 at the prem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(Central)-I, New Delhi v. Vatika Township (P.) Ltd. is notable 5. On the other hand, Ld DR for the Revenue submitted that there is no dispute as such on taxing the undisclosed cash and gold jewellery found during the course of search as the same was offered to tax in the return of Income. The only dispute is on treating the said unexplained assets as unexplained money u/s 69A and taxing the same as per the provisions of section 115BBE of the Act. It is correct that the provisions of section 115BBE of the Act as amended were brought into the Act by Taxation, Laws (Second Amendment) Act, 2016, however, the said amendment has been made effective from 01.04.2017 and hence applicable to the impugned assessment year i.e. AY.2017-18. Therefore, the amendment in question is not retrospective as claimed by the ld Counsel of the assessee. Though, the intention of the Legislature was to bring the amendment was to tax the unexplained assets after demonetization but the amendment covers all sections from 68 to 69D of the Act irrespective of whether the undisclosed assets found/taxed are prior to or after the demonetization period. Therefore, if any income from AY 2017-18 is taxed u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent assessee, (a) includes any income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D and reflected in the return of income furnished under section 139; or (b)determined by the Assessing Officer includes any income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D, if such income is not covered under clause (a), the incometax payable shall be the aggregate of (i) the amount of income-tax, calculated on the income referred to in clause (a) and clause (b), at the rate of sixty per cent; and (ii) the amount of income-tax with which the respondent assessee would have been chargeable had his total income been reduced by the amount of income referred to in clause (i) (2) Notwithstanding anything contained in this Act, no deduction in respect of any expenditure or allowance [or set off of any loss] shall be allowed to the respondent assessee under any provision of this Act in computing his income referred to in clause (a) of sub-section (1).] After the amendment total income includes additional income as voluntarily declared by the assessee in the return of total i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen income is taxable as business income of the respondent assessee. In that case, the assessing officer was not justified in adding the same by invoking the provision of section 69B of the Income Tax Act. Thus, the addition as made by invoking the provision of section 69B of the Act was not justified. That when the excess amount of stock was taxed as business income of the respondent assessee on account of closing stock valuation, in that case there was no justification for invoking of the provision of section 115BBE of the Act. 2.4] The respondent assessee company carrying manufacturing and trading business of Jewellery from last several years. During the course of Search and Survey Proceedings respondent assessee company had offered an amount of Rs. 10,14,95,122/-and Rs. 1,20,02,793/- on account of discrepancies in Stock. In addition to that the Ld. A.O. also added Rs. 14,07,74,248/- on account of excess valuation of closing stock in value terms only. 2.5.1] That while filing the return the respondent assessee company included the surrender amount of Rs. 11,34,97,915/- under the head Business Income and paid tax at applicable normal rate of 34.60%. 2.5.2] The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome. The assessee in support has also relied on the following decision:- Hon'ble Rajasthan High Court in the case of CIT vs Bajargan Traders [Appeal No 258/2017 dt 12-09-2017]; Hon'ble Ahmedabad bench of ITAT in the case of Chokshi Hiralal Maganlal vs DCIT as reported in 141 TTJ 001; Hon'ble Jodhpur bench of ITAT in the case of Lovish Singhal Others vs ITO [Appeal No 143/ Jodh/ 2018]; Hon'ble Jaipur bench of ITAT in the case of DCIT vs Ramnarayan Borla [Appeal No 482/ JP/ 2015 dt 30-09-2016]; Hon'ble Supreme Court in the case of Lakhmichand Baijnath Vs CIT as reported in 35 ITR 416; Hon'ble Apex Court in the case of Nalini Kant Ambalal Mody vs SAL Narayan Row as reported in 61 ITR 428. Considering the submission made and decisions referred, it is undisputed that the assessee is having only source of income from Trading and Manufacturing of jewellery. The additional income was offered on account of difference in the stock as per books of accounts and as actually found during the course of search. The difference in stock as fund was also related to the business of the assessee. I therefore hold t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter date is specified, the legislation to take immediate effect, i.e., as soon the assent of the Hon'ble President of India is received, by signing the same. The words at once‟ convey an urgency, so that the same represents the earliest point of time at which the same is to take effect, i.e., 15/12/2016 itself, and which also explains the same being enacted during the course of the fiscal year, tax rates for which stand already clarified at the beginning of the year per the relevant Finance Act (FA, 2016). The said words at once would loose significance if the provisions of the Act are to, as stated by the ld. CIT(A), be read as effective 01/04/2017, implying AY 2018-19. The same, for substantive amendments, as in the instant case, represents the first day of the assessment year, i.e., AY 201718, which explains the assessee s grievance of it being thus effective for FY 2016-17 or, w.e.f. 01/4/2016. Enacting it mid-year and, further, making it applicable at once , becomes meaningless if the same is to take effect retrospectively, or is made effective from a later date (01/4/2017), which could in that case be by Finance Act, 2017. True, the amendment, where so read, doe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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