DCIT Vs Balaji Ramchandra Ande (ITAT Pune)
ITAT Pune held that additional income surrendered during the course of survey is taxable at normal rates and not at special rates as per section 115BBE of the Income Tax Act. Accordingly, appeal of revenue dismissed.
Facts- AO, during the course of assessment proceedings, noted that at the time of survey statement of the assessee was recorded u/sec.131 in which the assessee has declared additional income of 3,52,40,780/- for the assessment year 2018-2019 which is over and above the regular income.
Out of the total declaration, an amount of Rs.1,56,95,093/- was declared on account of URD [“Un-Registered Dealer”] purchase. Thus, AO invoked the provisions of sec.69B r.w.s.115BBE of the I.T. Act.
Similarly, AO noted that the additional income of Rs.3,52,40,780/- includes an amount of Rs.63,85,608/- which is on account of Asphalt Transportation, an amount of Rs.4,56,950/- on account of repair and maintenance, an amount of Rs.1,27,03,129/- on account of labour payments, all totaling to Rs.1,95,45,687/- as unexplained expenditure. Therefore, AO invoked the provisions of sec.69C r.w.s.115BBE to the above income.
CIT(A) allowed the appeal. Being aggrieved, revenue has preferred the present appeal.
Conclusion- Held that once the Revenue has accepted during assessment year 2017-2018 that such additional income declared by the assessee has to be taxed at normal rate and not u/sec.115BBE, the Revenue cannot change it’s stand and tax the additional amount surrendered during the course of survey by applying provisions of sec.115BBE of the Act. Although the principles of res judicata do not apply to the income tax proceedings, however, once the income is taxed in a particular manner, unless there is change in facts and circumstances of the case, the Revenue should not take a different view for the immediately next assessment year when the income for both the years are declared on the basis of the same survey action and in one year the Revenue has accepted such additional income declared on the basis of survey at normal rate treating the same as business income.
