ACIT Vs Sandesh Kumar Jain (ITAT Jabalpur)
The Income Tax Appellate Tribunal (ITAT) Jabalpur Bench has partially allowed an appeal filed by the Assistant Commissioner of Income Tax (ACIT) against an order by the Commissioner of Income Tax (Appeals) [CIT(A)] concerning Sandesh Kumar Jain for Assessment Year (AY) 2017-18. The case involved two primary disputes: the head of income for a surrendered amount of excess stock found during a survey, and an addition made under Section 68 for an unexplained cash credit.
Background of the Case
Sandesh Kumar Jain, an assessee involved in real estate development and grain trading, underwent a survey under Section 133A of the Income Tax Act, 1961, on November 29, 2016. During this survey, an amount of Rs. 126.30 lacs was surrendered due to excess inventory of real estate. The assessee paid tax at a 30% rate on this surrendered income and declared it as business income in his return for the relevant year. However, the Assessing Officer (AO) treated this surrendered amount as income from an undisclosed source under Section 69B and applied a higher tax rate of 60% under Section 115BBE.
The second issue concerned an addition of Rs. 24 lacs under Section 68 for an unexplained cash credit in the name of one Shri Manish Jain. The assessee initially failed to provide supporting documents for this credit during assessment proceedings. While documents were later furnished before the CIT(A), including a bank statement of the creditor, the AO objected to the admission of this additional evidence in a remand report, citing a lack of proper justification for its late submission.
