Suresh Kumar Vs DCIT (ITAT Delhi)
Survey Income of 2016, Tax Rate of 60%: Delhi ITAT Directs Normal Taxation
The surrender during survey
Suresh Kumar, proprietor of Shiv Shakti Trading Co., carried on a business trading in edible oils, sugar, rice and other goods. A survey under Section 133A was conducted at his business premises on 11 August 2016. During the survey, he surrendered additional income of ₹50.20 lakh. His return for assessment year 2017–18 declared total income of ₹55,84,170.
The Assessing Officer (AO) considered that including the surrendered amount in the return did not prevent an enquiry into its nature and source. On the footing that it remained unexplained, the AO charged tax at 60% under Section 115BBE. The CIT(A) upheld the assessment.
Before the Delhi ITAT, the assessee challenged both the assessment procedure and the special rate of tax. The outcome, however, turned entirely on the rate applicable to the additional income connected with the 2016 survey.
The issue before the Tribunal
The assessee’s argument was that the transaction belonged to August 2016, when, according to him, the rate under Section 115BBE was 30%. He objected to applying the subsequently enhanced 60% rate to income surrendered in connection with an earlier transaction.
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