Hiralal Vijawat Vs ACIT/DCIT (ITAT Jaipur)
Income surrendered during survey and accounted as business income should not attract section 115BBE rates, clarifying application of sections 69, 69A, and 69B.
In Hiralal Vijawat vs ACIT/DCIT (ITAT Jaipur), the assessee challenged the application of section 115BBE of the Income Tax Act to income voluntarily disclosed during a survey under section 133A for AY 2019-20. During the survey on 16/01/2019, discrepancies were found between stock, cash, and the books of account, along with unrecorded transactions such as cash given to debtors and investments in construction of a shop. The assessee admitted these amounts as undisclosed income totaling ₹70,00,003 and included them in his return, paying tax at normal rates. The AO contended that certain amounts fell under sections 69, 69A, and 69B, thus attracting taxation under section 115BBE. The CIT(A) partially upheld the AO, treating excess stock as business income, but applied section 115BBE to cash given to debtors, excess cash, and shop investments. On appeal, the ITAT held that the assessee had disclosed the source of the income as business income, supported by statements recorded during the survey, and there was no evidence disputing the genuineness of debtors or the construction investment. The ITAT emphasized that the AO should have properly bifurcated income if intending to apply section 115BBE. Citing precedents, the tribunal distinguished the present case from others where income was undisclosed and unaccounted. Consequently, the ITAT allowed the assessee’s appeal, holding that the voluntarily offered income, already accounted in the books and disclosed in the return, should not be taxed under section 115BBE, thereby granting relief on the merits.
