Mahesh Kumar Singhla, Sadul Sahar V. ACIT, Circle, Sri Ganganagar

ITA 419/JODH/2019

• Counselvise Citation: [2020] 109 COUNSELVISE.COM (IT) 9977 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 13-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C BADHOK LD
• Assessee Lawyers: RAJENDRA JAIN LD ARS
• Keywords: Business income
• Section: 143(3); 133A; 69

Judgement Text

1 ITA NO.419/JODH/2019 SHRI MAHESH KUMAR SINGHLA ASSESSMENT YEAR: 2014-15 IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH , , BEFORE HONBLE SHRI SANDEEP GOSAIN, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.419/JODH/2019 ( / ASSESSMENT YEAR: 2014-15) SHRI MAHESH KUMAR SINGHLA C/O. RAJENDRA JAIN ADVOCATE 106, AKSHAY DEEP COMPLEX 5TH B ROAD, SARDARPURA, JODHPUR RAJASTHAN-342 001. / VS. A CIT CIRCLE SRI GANGANAGAR RAJASTHAN ./ ./PAN/GIR NO. BPSPK-4683-P ( /APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : MS. RAKSHA BIRLA (CA) & SHRI RAJENDRA JAIN (ADVOCATE)LD.ARS. REVENUE BY : SHRI K.C. BADHOK- LD. CIT- DR / DATE OF HEARING : 06/11/2020 / DATE OF PRONOUNCEMENT : 21/12/2020 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER): - 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 2014-15 CONTEST THE ORDER OF L D. COMMISSIONER OF INCOME-TAX(APPEALS), BIKANER, [IN SHORT REFERRED TO AS CIT(A)], 2 ITA NO.419/JODH/2019 SHRI MAHESH KUMAR SINGHLA ASSESSMENT YEAR: 2014-15 APPEAL NO.472/2016-17 DATED 24/09/2019 ON FOLLOWING EFFECTIVE GROUNDS:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ID CIT (A) ERRED IN UPHOLDING THE PROVISION OF SECTION 115BBE IN RESPECT OF EXCESS CASH OF RS.5,00,000/- WHICH WAS SURRENDERED IN THE RETUR N OF INCOME. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE ID CIT (A) ERRED IN TREATING THE EXCESS CASH SURRENDERED BY THE ASSE SSEE AT THE TIME OF SURVEY OUTSIDE THE BUSINESS INCOME PARTICULARLY WHEN THE E XCESS CASH FOUND AT THE TIME OF SURVEY IS PART OF BUSINESS ACTIVITIES CARRI ED OUT BY THE ASSESSEE. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE ID CIT (A) ERRED IN NOT CONSIDERING EXPLANATION AND JUDICIAL DECISIO NS REFERRED BEFORE HIM. AS EVIDENT THE ASSESSEE IS AGGRIEVED BY INVOCATION OF THE PROVISIONS OF SEC. 115BBE AGAINST SURRENDERED INCOM E OF RS.5 LACS. 2. WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS AN D PERUSED RELEVANT MATERIAL ON RECORD INCLUDING WRITTEN SUBMI SSIONS AND DOCUMENTS PLACED IN THE PAPER BOOK. THE JUDICIAL PR ECEDENTS AS RELIED UPON DURING THE COURSE OF HEARING HAVE DULY BEEN DELIBERATED UPON. OUR ADJUDICATION TO THE SUBJECT MATTER WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPHS. 3. THE ASSESSEE BEING RESIDENT INDIVIDUAL DERIVED B USINESS INCOME FROM PROPRIETORSHIP CONCERN NAMELY M/S SINGL A COTTON INDUSTRIES. AN ASSESSMENT WAS FRAMED FOR THE YEAR U NDER CONSIDERATION U/S 143(3) ACCEPTING RETURNED INCOME OF RS.29.91 LACS. THE ASSESSEES BUSINESS PREMISE WAS SUBJECTED TO SURVEY PROCEEDINGS U/S 133A ON 18/02/2014 WHEREIN THE ASSE SSEE SURRENDERED AGGREGATE INCOME OF RS.25.03 LACS WHICH WAS ON ACCOUNT OF EXCESS STOCK FOR RS.20.03 LACS AND ANOTH ER RS.5 LACS ON ACCOUNT OF EXCESS CASH. THE LD. AO, WHILE ACCEPT ING THE SAME, 3 ITA NO.419/JODH/2019 SHRI MAHESH KUMAR SINGHLA ASSESSMENT YEAR: 2014-15 OPINED THAT THE SAME WOULD BE TAXABLE AT MAXIMUM MA RGINAL RATES IN TERMS OF SECTION 115BBE AS AGAINST THE TAXES PAI D AT NORMAL RATES. THE ASSESSEES SUBMISSIONS COULD NOT FIND FA VOR WITH LD. AO WHO DENIED SLAB BENEFIT TO THE ASSESSEE AND DIRECTE D HIM TO PAY TAX AGAINST THE SAME @30% STRAIGHT. 4. UPON FURTHER APPEAL, LD. CIT(A) CONCURRED WITH A SSESSEES SUBMISSIONS THAT STOCK OF RS.20.03 LACS WOULD NOT B E COVERED U/S. 69 AND THEREFORE, THE PROVISIONS OF SECTION 115BBE WOULD NOT BE APPLICABLE. HOWEVER, EXCESS CASH OF RS.5 LACS WOULD NOT BE BUSINESS INCOME AND THEREFORE, THE SAME WOULD BE TA XED @30%. AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 5. UPON DUE CONSIDERATION, WE FIND THAT THE SURREND ER WAS MADE BY THE ASSESSEE DURING SURVEY PROCEEDINGS AT BUSINE SS PREMISES. DURING THE SURVEY ACTION, DISCREPANCIES IN STOCK AS WELL AS CASH WERE FOUND BY THE AUTHORITIES AND TO MAKE UP THE SA ME THE ASSESSEE MADE A SURRENDER OF THE SAME AND DULY DECL ARED THE SAME IN HIS RETURN OF INCOME. IT IS TO BE NOTED THA T THE CASH DISCREPANCIES WERE FOUND AT THE BUSINESS PREMISES. THE ASSESSEE DOES NOT HAVE ANY OTHER SOURCE OF INCOME. THEREFORE , THE CASH DISCREPANCIES WOULD BE NOTHING BUT THE BUSINESS REC EIPTS FOR THE ASSESSEE. IT COULD NOT BE SAID THAT THE SAID INCOME AROSE FROM UNDISCLOSED SOURCES SINCE THE SOURCE OF THE SAME WA S TO BE ACCEPTED AS BUSINESS RECEIPTS AND NOTHING ELSE. THE REFORE, LD. CIT(A), IN OUR CONSIDERED OPINION, WAS NOT CORRECT IN UPHOLDING THE ACTION OF LD. AO IN TAXING THE SAME AS PER SECTION 115BBE. WE 4 ITA NO.419/JODH/2019 SHRI MAHESH KUMAR SINGHLA ASSESSMENT YEAR: 2014-15 HOLD THAT THE SAID RECEIPTS WOULD CONSTITUTE BUSINE SS INCOME TO BE TAXED AS PER SLAB RATES. WE ORDER SO. 6. THE APPEAL STANDS ALLOWED IN TERMS OF OUR ABOVE ORDER. ORDER PRONOUNCED U/R 34(4) OF INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963. SD/- SD/- (SANDEEP GOSAIN) (MAN OJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 21/12/2020 SR.PS:-JAISY VARGHESE ! / COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #$' / THE RESPONDENT 3. % ( ) / THE CIT(A) 4. % / CIT CONCERNED 5. &'#( ) , ) , / DR, ITAT, JODHPUR 6. '+,- / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, JODHPUR.