YASHUDEV ENTERPRISES,AMLOH V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE, MANDI GOBINDGARH, MANDI GOBINDGARH

ITA 775/CHANDI/2025

AI Insights

The case involves M/s Yashudev Enterprises, which appealed against the decision of the Commissioner of Income Tax (Appeals) confirming the Assessing Officer's application of a higher tax rate on additional income surrendered during a survey. The survey, conducted under section 133A of the Income Tax Act, revealed discrepancies in stock, cash, and unaccounted investments, leading the assessee to surrender additional income of Rs. 33 Lacs, which was offered as income from normal business activities. The dispute centered on the tax rate applicable to this surrendered income. The Tribunal's decision was based on the timing of the tax rate notification, which occurred after the income was surrendered.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 793013 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Appeal Filed On: 28-05-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANJIT KAUR LD.
• Assessee Lawyers: ASHWANI KUMAR LD
• Keywords: Business income; Unexplained investment
• Section: 143(3); 133A

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHANDIGARH HYBRID HEARING BEFORE HON’BLE SHRI LALIET KUMAR, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपीलसं./ ITA No. 775/CHANDI/2025 (िनधाŊरणवषŊ / Assessment Year: 2017-18) M/s Yashudev Enterprises Bye Pas Road, Amloh Fatehgarh Sahib (Punjab) 147310 बनाम/ Vs. DCIT-Circle Mandi Gobindgarh New Libra Kothi Railway Road, Sirhind ̾थायीलेखासं./जीआइआरसं./PAN/GIR No. AAAFY-7590-H (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) अपीलाथŎकीओरसे/Appellant by : Shri Ashwani Kumar (CA) – Ld. AR ŮȑथŎकीओरसे/Respondent by : Dr Ranjit Kaur (Addl. CIT) – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 03-09-2025 घोषणाकीतारीख /Date of Pronouncement : 22-09-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2017-18 arises out of an order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 20-05-2025 in the matter of an assessment framed by Ld. AssessingOfficer [AO] u/s. 143(3) of the Act on 06-11-2019. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under. 2. The assessee was subjected to survey u/s 133A on 21-10-2016 wherein the assessee offered additional income of Rs.33 Lacs. The Printed from counselvise.com 2 assessee honored the surrender and offered additional income to tax in its return of income. The surrender was on account of discrepancy in stock / cash & unaccounted investment in construction. The assessee offered the surrendered income as income arising out of normal business activities and accordingly, credited the same to its Profit & Loss Account. The dispute arose on account of rate of taxation. The assessee applied normal rate of tax whereas Ld. AO held that the surrender of Rs.33 Lacs would be subjected to higher rate of tax of 60% u/s 115BBE. The Ld. CIT(A) confirmed the stand of Ld. AO against which the assessee is in further appeal before us. 3. It emerges that the survey has happened on the assessee on 21-10- 2016 whereas notification prescribing higher rate of tax has come into force vide Taxation Laws (Second Amendment) Bill, 2016, notification dated 28-11-2016. In other words, the higher rate has been prescribed later on whereas the surrender has been made for income arising to the assessee prior to that date. Secondly, Ld. AO has not disturbed the head of income in the assessment order and there is no discussion in this respect. For both the reasons, the application of higher tax rate of 60% as prescribed u/s 115BBE could not be held to be justified. The Ld. AO is directed to accept the surrender as normal business income only. 4. The appeal stand allowed. Order pronounced on 22-09-2025. Sd/- Sd/- (LALIET KUMAR) (MANOJ KUMAR AGGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Printed from counselvise.com 3 Dated: 22-09-2025. आदेश की Ůितिलिप अŤेिषत /Copy of the Order forwarded to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF ASSISTANT REGISTRAR ITAT CHANDIGARH Printed from counselvise.com "