Case Law Details
Parmod Singla Vs ACIT (ITAT Chandigarh)
The case of Parmod Singla Vs ACIT revolves around a survey conducted under Section 133A at the business premises of the assessee, Parmod Singla, on 8th July 2016. During this survey, Parmod Singla surrendered an additional income of Rs. 84.80 lakhs, which was subsequently included in his income tax return filed on 23rd March 2018. The Assessing Officer (AO) initiated manual scrutiny to examine whether this surrendered income was correctly accounted for and whether the provisions of Section 69, 69A, and 115BBE of the Income Tax Act applied to tax this income.
The primary contention in this case was whether the surrendered income should be taxed under the deeming provisions of Section 69 and 69A, and consequently, under Section 115BBE due to its nature as undisclosed income. The AO argued that since the income was surrendered during a survey and fell within the ambit of undisclosed investments and assets not recorded in the books of accounts, it should be taxed under these provisions.
However, Parmod Singla’s defense, represented by his authorized representative (AR), was that the surrendered income was fully disclosed and related to business activities. The AR contended that the provisions of Section 69, 69A, and 115BBE were not applicable because the surrendered income was not undisclosed; rather, it was a voluntary disclosure during the survey and was accounted for in the subsequent tax return.
The Income Tax Appellate Tribunal (ITAT), Chandigarh, analyzed the provisions of Sections 69 and 69A, which deal with deemed income from undisclosed investments and assets, respectively. It noted that for these provisions to apply, there must be evidence that the investments or assets were not recorded in the books of accounts and that the assessee failed to provide a satisfactory explanation regarding their nature and source.
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