Case Law Details
Shri Lovish Singhal Vs ITO (ITAT Jodhpur)
Facts:- Survey u/s 133A was carried out at the assessee’s premises on 09.01.2014. During the survey, assessee offered INR 10,90,000 for taxation on account of discrepancy in stock, incriminating documents and excess cash.
Assessee filed the income tax return for AY 2014-15 declaring INR 10,15,000 as total income. During the assessment proceeding, AO observed that income of INR 10,90,000 was included as business income, however, tax was calculated at normal rate instead of 30% as per provisions of section 115BBE and AO issued notice for the same.
Assessee submitted that since they disclosed the surrendered income in income tax return, it was not covered under any deeming provisions and hence section 115BBE cannot be applied. Relying on the judgment of Hon’ble Rajasthan HC in the matter of Bajargan Traders, assessee submitted that excess stock, incriminating documents and excess cash are related to business activities and the same has to be accepted as business income.
Held: In respect of excess stock found during the course of survey and surrender made thereof, Hon’ble Rajasthan HC in Bajrang Trading, held the same to be taxable under the head ‘Business and profession’. In respect of excess cash found out of sale on goods in which the assessee was dealing was also found taxable under the head ‘Business and Profession’. Relying on the same it was held that excess stock and excess cash cannot be taxed u/s 115BBE.
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