Vasantrao Jayavantrao Mugale, Osmanabad V. The Deputy Commissioner of Income Tax , Circle-1, Aurangabad

ITA 95/PUN/2023

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The case involves Vasantrao Jayavantrao Mugale, an individual engaged in the medical profession, who appealed against the decision of the Commissioner of Income Tax (Appeals)-12, Pune. The appeal was related to the assessment year 2019-20, where the appellant had declared additional income during a survey operation under section 133A of the Income Tax Act, 1961. The primary contention was whether the excess cash found during the survey should be taxed under section 115BBE as 'other sources' or could be considered as part of 'business income'. The Tribunal referenced decisions from the Rajasthan, Madras, and Punjab & Haryana High Courts to support its conclusion that the income should be classified under 'business income'.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 137457 (ITAT-PUNE)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 25-06-2023
• Assessment Year: 2019-2020
• Appeal Filed On: 24-01-2023
• Other Referred Cases: CIT vs. Bajargan Traders, M/s. SVS Oils Mills vs. ACIT, Kim Pharma Pvt. Ltd. vs. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income
• Section: 133A; 113; 153

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER आयकर अपील सं. / ITA No.95/PUN/2023 िनधाᭅरण वषᭅ / Assessment Year : 2019-20 Vasantrao Jayavantrao Mugale, 1 Mugle Hospital, Highway Road Omerga Osmanabad- 413606. PAN : AAVPM0306N Vs. DCIT, Circle-1, Aurangabad. Appellant Respondent आदेश / ORDER PER INTURI RAMA RAO, AM: This is an appeal filed by the assessee directed against the order of ld. Commissioner of Income Tax (Appeals)-12, Pune [‘the CIT(A)’] dated 14.12.2022 for the assessment year 2019-20. 2. Briefly, the facts of the case are that the appellant is an individual engaged in the business of medical profession under the name and style of “M/s. Mugale Hospital”. The appellant had filed Assessee by : Shri Bhupendra Shah Revenue by : Shri M. G. Jasnani Date of hearing : 26.06.2023 Date of pronouncement : 12.07.2023 ITA No.95/PUN/2023 2 the Return of Income for the assessment year 2019-20 on 31.10.2019 declaring total income of Rs.92,37,140/-. The survey operations were conducted under the provisions of section 133A of the Income Tax Act, 1961 (‘the Act’) on 14.02.2019. During the course of such survey operation, the appellant had declared a sum of Rs.65,19,385/-. Out of which, a sum of Rs.7,73,885/- was declared on account of excess cash found and a sum of Rs.57,45,500/- was declared as unrecorded receipts and the same was shown in the regular return of income filed by the assessee. The Assessing Officer subjected in case of Rs.7,73,885/- under the provisions of section 115BBE of the Income Tax Act, 1961 (‘the Act’) by holding that the appellant had failed to offer explanation as to source of excess cash funds. Even on appeal before the ld. CIT(A), the same was confirmed. 3. Being aggrieved, the appellant is in appeal before us in the present appeal. 4. We heard the rival submissions and perused the material on record. The undisputed position is that the appellant had shown the ITA No.95/PUN/2023 3 income offered during the course of survey operation in the return of income. In answer to question no.10, the appellant clearly stated that he is willing to offer a sum of Rs.57,45,500/- on account of unrecorded professional receipts and the same was offered to tax. Even the excess cash found of Rs.7,73,885/- can be telescoped against the unrecorded receipts of Rs.57,45,500/-. Therefore, it cannot be said that the source for the excess cash was not explained, as the source is clearly explained to be regular business professional receipts. Therefore, the income can be brought to tax under the head “business income” not under the head “other sources”. The ratio of Hon’ble Rajasthan High Court in the case of CIT vs. Bajargan Traders, 86 taxmann.com 295 (Rajasthan) is clearly applicable to the facts of the present case. The decision of the Hon’ble Madras High Court in the case of M/s. SVS Oils Mills vs. ACIT, 113 taxmann.com 388 (Madras) and the decision of the Hon’ble Punjab & Haryana High Court in the case of Kim Pharma Pvt. Ltd. vs. CIT, 216 Taxman 153 (P&H) have no application to the facts of the present case. Therefore, we direct the Assessing Officer not to tax the excess cash found under the provisions of ITA No.95/PUN/2023 4 section 115BBE of the Act. Thus, the grounds of appeal filed by the assessee stand allowed. 5. In the result, the appeal filed by the assessee stands allowed. Order pronounced on this 12 th day of July, 2023. Sd/- Sd/- (PARTHA SARATHI CHAUDHURY) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 12 th July, 2023. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A)-12, Pune. 4. The Pr. CIT (Central), Nagpur. 5. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “B” बᱶच, पुणे / DR, ITAT, “B” Bench, Pune. 6. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.