Case Law Details
Bal Krishan Vs PCIT (ITAT Chandigarh)
ITAT Chandigarh held that the income so surrendered by way of account receivables cannot be brought to tax under the deeming provisions u/s 69 r/w section 115BBE of the Income Tax Act.
Facts- A survey operation u/s. 133A was conducted at the business premises of the assessee on 31/08/2016. During the course of survey proceedings, certain discrepancies were noticed and confronted to the assessee and the assessee offered a sum of Rs. 2,02,00,000/- as additional income over and above the normal income and in the return of income so filed by the assessee, the assessee has declared the said income as additional business income and tax thereon was calculated at normal rate. Subsequently, the assessment was completed u/s. 143(3) dt. 30/12/2018 at an assessed income of Rs. 1,99,81,908/- accepting the returned income so filed by the assessee and making an adjustment of Rs. 2,00,000/- to the returned income.
Thereafter, the assessment records were called for by the Ld. Pr. CIT(Central), Ludhiana and a show cause u/s. 263 dt. 26/03/2021 was issued and thereafter, after considering the submissions of the assessee, the assessment order passed by the AO was held as erroneous in so far as prejudicial to the interest of the Revenue and the same was set aside to be made afresh in accordance with the findings and the directions in the impugned order and which are under challenge before us.
Conclusion- In the instant case, the factum of the matter is that the surrender was made and accepted by the Survey team in the hands of the assessee, being the partner of the concern for reasons best known to both the parties, the same will however not change the nature of surrendered income being on account of account receivables generated out of book sales undertaken by the concern in which the assessee was a partner.
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