Case Law Details
DCIT Vs Tapesh Tyagi (ITAT Delhi)
In a recent appeal, the Income Tax Appellate Tribunal (ITAT) Delhi ruled on a case involving the Deputy Commissioner of Income Tax (DCIT) and Mr. Tapesh Tyagi. The dispute primarily revolved around the applicability of the special tax rate under Section 115BBE of the Income Tax Act, 1961. The ITAT’s decision, rendered on October 27, 2023, provides insights into the interpretation of tax provisions and the treatment of surrendered income during a search and seizure operation.
Background: Mr. Tapesh Tyagi, a resident individual, underwent a search and seizure operation under Section 132 of the Income Tax Act on August 11, 2016. During this operation, a document was found in Mr. Tyagi’s possession, indicating an amount of Rs. 30.20 crores with the notation “Com Trade.” In subsequent statements recorded under Section 132(4), Mr. Tyagi claimed that this amount represented profits from offline commodity trading. Consequently, he voluntarily surrendered this amount as income for the assessment year 2017-18 and duly paid the taxes.
During the assessment proceedings, the Assessing Officer characterized the surrendered income as unexplained money under Section 69A of the Act but did not alter the tax rate. In a subsequent order under Section 154, the Assessing Officer applied the higher tax rate prescribed under Section 115BBE. Dissatisfied with the elevated tax rate, Mr. Tyagi appealed to the Commissioner of Income Tax (Appeals), who ruled in his favor, stating that the income surrendered should not be treated as falling under Section 69A, and hence, the normal tax rate would be applicable.
Key Points from the ITAT Decision:
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