Bajaj Sons Ltd., Ludhiana V. DCIT,Central Circle-III, Ludhiana

ITA 1127/CHANDI/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4475 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 10-03-2021
• Assessment Year: 2017-2018
• Appeal Filed On: 13-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C CHANDRAKANTA
• Keywords: Unexplained cash credit; Unexplained expenditure; Business income; Set aside
• Section: 69C; 69A

Judgement Text

, , A IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A CHANDIGARH , ! '# $ % & '# , () BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO. 1 127 /CHD/2019 / ASSESSMENT YEAR : 2017-18 M/S BAJAJ SONS LTD. C-103, PHASE-V, FOCAL POINT, LUDHIANA. THE DCIT, CENTRAL CIRCLE-III, LUDHIANA. ./PAN NO: AAACB6875H / APPELLANT /RESPONDENT HEARING THROUGH VIDEO CONFERENCING ! /ASSESSEE BY : SHRI SARBJIT GARG, CA ' ! / REVENUE BY : SMT. C. CHANDRA KANTA, CIT # $ % /DATE OF HEARING : 10.03.2021 &'() % / DATE OF PRONOUNCEMENT : 24.05.2021 PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 27.05.2019 OF THE COMMISSIO NER OF INCOME TAX (APPEALS)-5, LUDHIANA [HEREINAFTER REFER RED TO AS CIT(A)]. 2. IN THIS APPEAL THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- ITA 1127/CHD/2019 A.Y. 2017-18 PAGE 2 OF 6 1. A) THAT THE LD. CIT(A) HAS ERRED IN LAW AND FAC TS OF THE CASE BY UPHOLDING THE TAXATION OF INCOME SURRENDERE D U/S 1115BBE, DESPITE THE FACT THAT IT DID NOT FALL U/S 68, SECTION 69, SECTION 69A, SECTION 69B, SECTION 69C O R SECTION 69DAND WAS REFLECTED UNDER THE HEAD INCOM E FROM BUSINESS OR PROFESSION IN THE RETURN OF INCOME FIL ED BY THE ASSESSEE. B) THAT THE LD. CIT(A) HAS ERRED IN LAW AND FACTS O F THE CASE BY UPHOLDING THE TAXATION OF INCOME SURRENDERE D U/S 1115BBE, DESPITE THE FACT THAT IT HAS NOT BE ASSESS ED BY THE LD. AO U/S 68, SECTION 69, SECTION 69A, SECTION 69B, SECTION 69C OR SECTION 69D C) THE ASSESSEE CRAVES RIGHT TO TAKE ANY OTHER GROU ND AT THE TIME OF HEARING OR TO AMEND/ALTER/DELETE ANY OF THE GROUNDS OF APPEALS.. 2. THE ASSESSEE THROUGH THE ABOVE GROUND OF APPEAL HAS AGITATED THE ACTION OF THE LOWER AUTHORITIES IN INV OKING THE PROVISION OF SECTION 115BBE OF THE INCOME TAX ACT O N THE SURRENDERED INCOME OF RS. 15 LACS AND THEREBY ASSES SING THE SAID INCOME AT A HIGHER RATE AS AGAINST THE NORMAL RATE OF TAXATION APPLICABLE TO BUSINESS INCOME. 3. THE BRIEF FACTS RELEVANT TO THE ISSUE ARE THAT A SEARCH & SEIZURE ACTION WAS CARRIED OUT AT THE PREMISES OF T HE ASSESSEE AS WELL AS THE RESIDENTIAL PREMISES OF ITS DIRECTOR S WHICH WAS CONCLUDED ON 30.01.2017. 4. DURING THE SEARCH OPERATION, STATEMENT OF SHRI SURINDER PAL BAJAJ, THE DIRECTOR OF THE ASSESSEE, BAJAJ SONS LTD. WAS RECORDED U/S 132(4), DURING WHICH HE SURRENDERED AN AMOUNT OF RS. 89.61 LACS ON ACCOUNT OF UNEXPLAINED CASH FO UND AT HIS ITA 1127/CHD/2019 A.Y. 2017-18 PAGE 3 OF 6 PREMISES. FURTHER, A SUM OF RS. 7.50 LACS WAS ALSO SURRENDERED SUBSEQUENTLY. THEREFORE, A SUM OF RS. 97.11 LACS WAS SURRENDERED UPON WHICH DUE TAXES HAVE BEEN PAID BY SHRI S.P.BAJAJ. FURTHER AN ADDITIONAL SUM OF RS. 15 LACS WAS ALSO SURRENDERED STATING AS UNDER: FURTHER, IN ORDER TO COVER ANY DISCREPANCY, FO9UND DURING THE COURSE OF SEARCH OR IN PAPER SEIZED DURI NG THE COURSE THEREOF, A SUM OF RS. 15 LAKHS ARE OFFERED T O TAX FOR THE A.Y. 2017-18 IN THE HAND OF M/S BAJAJSONS LIMITED. 5. HOWEVER, THE ASSESSEE COMPANY DID NOT DISCLOSE T HE AFORESAID SURRENDERED AMOUNT IN THE RETURN OF INCOM E. ON BEING SHOW CAUSED BY THE AO IN THIS RESPECT, THE AS SESSEE REVISED ITS RETURN AND OFFERED ADDITIONAL INCOME OF RS. 15 LACS AS ITS BUSINESS INCOME. HOWEVER, THE AO TREATED TH E AFORESAID INCOME AS INCOME FROM UNEXPLAINED SOURCES AND INVOK ED THE PROVISIONS OF SECTION 115 BBE AND CHARGED THE TAX A T A HIGHER RATE. 6. ON BEING AGGRIEVED ON THE INVOCATION OF PROVISIO N OF SECTION 115BBE, ASSESSEE PREFERRED APPEAL BEFORE TH E CIT(A) BUT REMAINED UNSUCCESSFUL. 7. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT NEITHER ANY INCRIMINATING MATERIAL NOR ANY UNE XPLAINED EXPENDITURE WAS FOUND DURING THE SEARCH ACTION IN R ESPECT OF ITA 1127/CHD/2019 A.Y. 2017-18 PAGE 4 OF 6 THE AFORESAID RS. 15 LACS SURRENDERED BY THE ASSESS EE COMPANY. THAT THE AMOUNT OF RS. 15 LACS WAS SURREN DERED AS BUSINESS INCOME TO COVER UP ANY DISCREPANCY IN THE ACCOUNTS RELATING TO THE ALLOWANCES OR DISALLOWANCES ETC.; THAT MAY BE MADE BY THE AO WHILE ASSESSING THE BUSINESS INCOME. HE, THEREFORE, HAS SUBMITTED THAT ACTION OF THE AO IN I NVOCATION OF THE PROVISIONS OF SECTION 115BBE WAS NOT JUSTIFIED. THE LD. DR ON THE OTHER HAND HAS RELIED UPON THE FINDINGS OF T HE LOWER AUTHORITIES. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND GON E THROUGH THE RECORD. FOR THE SAKE OF READY REFERENC E, THE RELEVANT PROVISIONS OF SECTION 115BBE ARE REPRODUCE D HEREUNDER : 115BBE. (1) WHERE THE TOTAL INCOME OF AN ASSESSEE, (A) INCLUDES ANY INCOME REFERRED TO IN SECTION 68, SECTION 69, SECTION 69A, SECTION 69B, SECTION 69C OR SECTION 69D AND REFLECT ED 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, S ECTION 69C OR SECTION 69D, IF SUCH INCOME IS NOT COVERED UNDER CLAUSE (A), THE INCOME-TAX PAYABLE SHALL BE THE AGGREGATE OF (I) THE AMOUNT OF INCOME-TAX CALCULATED ON THE INCOME R EFERRED TO IN CLAUSE (A) AND CLAUSE (B), AT THE RATE OF S IXTY PER CENT; AND (II)THE AMOUNT OF INCOME-TAX WITH WHIC H THE 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 ASSESSEE UNDER ANY PROVISION OF THIS ACT IN COM PUTING HIS INCOME REFERRED TO IN CLAUSE (A) [AND CLAUSE (B)] OF SUB-S ECTION (1).] ITA 1127/CHD/2019 A.Y. 2017-18 PAGE 5 OF 6 WE FIND THAT A SEPARATE SURRENDER OF RS. 97.11 LA CS HAS BEEN MADE BY SHRI SB BAJAJ DIRECTOR OF THE ASSESSEE COMPANY ON ACCOUNT OF UNEXPLAINED CASH FOUND DURING THE SEA RCH ACTION. HOWEVER, SO FAR AS THE SURRENDER OF RS. 15 LAC TO COVER ANY DISCREPANCY IS CONCERNED, THE AO HAS NOT POINTE D OUT ANY UNEXPLAINED CREDIT IN THE BOOKS OF ACCOUNT, ANY UNE XPLAINED INVESTMENT, ANY UNEXPLAINED MONEY, BULLION OR JEWEL LERY, ANY UNEXPLAINED EXPENDITURE OR ANY AMOUNT OF LOAN REPAI D IN THE ASSESSMENT ORDER IN THIS RESPECT. THEREFORE, THE P ROVISIONS OF SECTION 68, 69, 69A, 69B, 69C AND 69D ARE NOT ATTRA CTED ON THE SURRENDERED AMOUNT OF RS. 15 LACS. THE SAID AM OUNT OF RS. 15 LACS WAS OFFERED IN CASE ANY DISCREPANCY IS FOUN D IN THE BOOKS OF ACCOUNT. HOWEVER, IN ACTUAL NEITHER ANY UN EXPLAINED INVESTMENT NOR ANY UNEXPLAINED EXPENDITURE OR OTHER WISE ANY UNEXPLAINED ASSET WAS FOUND DURING THE SEARCH ACTIO N SO FAR AS THE AFORESAID SURRENDER OF RS. 15 LACS WAS CONCERNE D. IN THESE CIRCUMSTANCES, THE AFORESAID SURRENDER OF RS. 15 LA CS CAN BE SAID TO HAVE BEEN OFFERED TO COVER UP THE DISCREPAN CIES IN RESPECT OF LIKELY DISALLOWANCES OF CLAIMS, IF ANY, RELATING TO ITS BUSINESS INCOME. 9. IN VIEW OF THIS, SINCE THE AFORESAID SURRENDER I S NOT COVERED UNDER THE PROVISIONS OF SECTION 68, 69, 69A , 69B, 69C ITA 1127/CHD/2019 A.Y. 2017-18 PAGE 6 OF 6 AND 69D, THE PROVISIONS OF SECTION 115BBE ARE NOT A TTRACTED IN THIS CASE. 10. IN VIEW OF THE ABOVE, THE ACTION OF THE LOWER A UTHORITIES IN INVOKING PROVISIONS OF SECTION 115BBE ON THE SURREN DER INCOME OF RS. 15 LACS IS SET ASIDE AND THE AO IS DI RECTED TO COMPUTE THE SAID SURRENDERED INCOME UNDER NORMAL P ROVISIONS AS APPLICABLE TO THE BUSINESS INCOME OF THE ASSESSE E. 11. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS AL LOWED. ORDER PRONOUNCED ON 24.05. 2021. SD/- SD/- ( $ % & '# ) ( ) (ANNAPURNA GUPTA) (SANJAY GARG) () / ACCOUNTANT MEMBER / JUDICIAL MEMBER POONAM '* +, -, / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. # . / CIT 4. # . ( )/ THE CIT(A) 5. ,/0 1 , % 1 , 23405 / DR, ITAT, CHANDIGARH 6. 04 6$ / GUARD FILE