Abhijit Vivek Swami, Kolhapur V. Assistant Commissioner of Income Tax, Central Circle-Kolhapur, Kolhapur

ITA 319/PUN/2023

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The case involves Abhijit Vivek Swami, the appellant, who was subjected to a survey under section 133 of the Income-tax Act on February 6, 2019. During the survey, excess stock worth Rs.13,83,663/- was discovered, which the assessee admitted and included in his income tax return for the assessment year 2019-20. The Assessing Officer (AO) treated this income under section 68 as unexplained cash credit and taxed it at a higher rate under section 115BBE. The CIT(A) upheld this decision, leading the assessee to appeal to the Tribunal. The Tribunal's decision reversed the CIT(A)'s ruling, stating that the income should be taxed at the regular rate as it was declared and recorded in the books as business income, not as an unexplained cash credit.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 124118 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 19-04-2023
• Assessment Year: 2019-2020
• Appeal Filed On: 19-03-2023
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT आयकर अपील सं. /ITA No.319/PUN/2023 नधा रण वष / Assessment Years : 2019-20 Abhijit Vivek Swami, 7/8/1, Ist Lane, Station Road, Jaysingpur, Dist. Kolhapur – 416 101 Maharashtra PAN : BBXPS7054K Vs. ACIT, Central Circle, Kolhapur Appellant Respondent आदेश / ORDER PER R.S. SYAL, VP: This appeal by the assessee is directed against the order dt. 14-02-2023 passed by the CIT(A) in National Faceless Appeal Centre, Delhi u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) in relation to the assessment year 2019-20. 2. The only issue raised in this appeal is against the rate at which income offered by the assessee ought to have been charged. 3. Succinctly, the facts of the case are that the assessee was subjected to survey u/s.133 of the Act on 06-02-2019. During the course of survey, it was found that there was excess stock of Assessee by Shri Sharad Vaze Revenue by Shri Ganesh B. Budruk Date of hearing 20-04-2023 Date of pronouncement 21-04-2023 ITA No. 319/PUN/2023 Abhijit Vivek Swami 2 Rs.13,83,663/-. The assessee agreed for the addition towards such excess stock. The return was filed including such income. The AO treated such amount as falling under the head ‘Income from other sources’ and hence taxed the same as income u/s.68 of the Act at a higher rate u/s.115BBE. The ld. CIT(A) countenanced the action of the AO, against which the assessee has approached the Tribunal. 4. Having heard the rival submissions and gone through the relevant material on record, it is seen that surrender of Rs.13,83,663/- was made by the assessee during the course of survey on 06-02-2019. The assessment year under consideration is 2019-20, which shows that the corresponding financial year was yet to close on the date of survey when the surrender was made. Such surrender was towards excess stock found during the course of survey. The assessee offered such amount as regular business income in his return of income, which came to be assessed by the AO u/s.68 and consequently taxed u/s.115BBE of the Act. Under such circumstances, a question arises as to whether the income offered by the assessee during the course of survey for the year, which was still in progress, towards excess closing stock should be taxed u/s.115BBE or as a regular income? ITA No. 319/PUN/2023 Abhijit Vivek Swami 3 5. The AO treated such amount as income u/s.68 of the Act and hence, covered u/s.115BBE. In fact, there is no cash credit in so far as the transaction under consideration is concerned. The assessee passed relevant entry into books of account showing this amount as additional income and specifically portrayed it as income in the ‘Trading account’. Once a particular amount has been shown as income by the assessee in its books of account, I fail to appreciate as to how section 68 can be attracted qua such income. In the given facts and circumstances, I am satisfied that though the assessee offered income during the course of survey and included it in his return of income, the same does not fall for consideration u/s.68 so as to attract the rigour of section 115BBE of the Act. I, therefore, hold that the income of Rs.13,83,663/- was not properly taxed at the increased rate u/s.115BBE and was correctly offered by the assessee at the regular rate. 6. In the result, the appeal is allowed. Order pronounced in the Open Court on 21 st April, 2023. Sd/- ( R.S.SYAL) VICE PRESIDENT पुणे Pune; िदनांक Dated : 21 st April, 2023 सतीश ITA No. 319/PUN/2023 Abhijit Vivek Swami 4 आदेश की ितिलिप अ ेिषत/Copy of the Order is forwarded to: 1. अपीलाथ / The Appellant; 2. थ / The Respondent 3. 4. 5. The Pr.CIT concerned DR, ITAT, ‘SMC’ Bench, Pune गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune Date 1. Draft dictated on 20-04-2023 Sr.PS 2. Draft placed before author 21-04-2023 Sr.PS 3. Draft proposed & placed before the second member JM 4. Draft discussed/approved by Second Member. JM 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *