ACIT Vs Naresh Jain (ITAT Jaipur)
In the case ACIT vs Naresh Jain before the ITAT Jaipur, the primary issue involved the applicability of Section 115BBE of the Income Tax Act, which imposes special tax rates on income assessed under Sections 68 to 69C as “Income from Other Sources.” The Assessing Officer (AO) had invoked Section 115BBE based on additions amounting to ₹2.46 crore, which were later scrutinized by the Commissioner of Income Tax (Appeals) [CIT(A)]. After partial modifications and some additions being sustained, a total of ₹1.07 crore remained under scrutiny at the ITAT stage. However, after considering the benefit of telescoping (offsetting unexplained income against disclosed income), the sustained additions amounted to ₹28.72 lakh. Upon reviewing the case, the ITAT found that there were no grounds for invoking Section 115BBE, as the alleged unexplained income stemmed from Jain’s advertising business, with no other identified sources of undisclosed income. Therefore, the invocation of Section 115BBE was quashed.
Additional grounds raised by the revenue, such as the deletion of an addition of ₹9.5 lakh for unrecorded land investments and unexplained agricultural expenses of ₹55,490, were also addressed. The ITAT upheld the CIT(A)’s findings, affirming that the relevant payments had occurred in the subsequent financial year. Furthermore, the revenue’s challenge to the benefit of telescoping was also dismissed. The ITAT recalculated the sustained additions, considering income already settled in prior years under the Vivad se Vishwas Scheme (VSV), leaving no further income uncovered for the year under consideration.
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