SIMRITA KAUR,RAJPURA vs. ACIT, PATIALA
In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.
What did the Tribunal hold?
The Tribunal held that the source of income is the relevant factor for determining its head. Since the additional income was offered over and above normal business profits and not from unknown sources, it should be accepted as normal business income.
What were the facts?
During a survey, the assessee offered additional income of Rs. 25 Lacs, claiming it as business income, to cover excess cash, construction expenditure, and gifts. The AO treated this income under Section 69A, taxable at higher rates under Section 115BBE, which was upheld by the CIT(A).
What were the issues?
Whether the additional income surrendered by the assessee during survey proceedings should be treated as business income or income from undisclosed sources under Section 69A.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH, CHANDIGARH
Before: HON’BLE SHRI RAJPAL YADAV & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
(िनधा�रणवष� / Assessment Year: 2018-19) Dr. Simrita Kaur ACIT 69, Dalima Vihar Patiala, Punjab. बनाम/ Vs. Rajpura-140401 �थायीलेखासं./जीआइआरसं./PAN/GIR No. ABYPK-2113-R (अपीलाथ�/Appellant) : (��थ� / Respondent) अपीलाथ�कीओरसे/ Appellant by : Sh. Parikshit Aggarwal (CA) – Ld. AR ��थ�कीओरसे/Respondent by : Dr. Ranbir Kaur (Addl. CIT) – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 01-04-2025 घोषणाकीतारीख /Date of Pronouncement : 04-04-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2018-19 arises out of an order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 09-12-2022 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 21-09-2021. The short issue to be adjudicated by us to determine the head of additional income as surrendered by the assessee during survey proceedings. The assessee is stated to be running a nursing home in the name and style of M/s Simrita Nursing Home, Rajpura. The registry has noted delay of 432 days in the appeal which stand condoned keeping in mind the guiding principles laid down by Hon’ble Apex Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (1987; (2) TMI 61 SC).
Pursuant to survey u/s 133A on the assessee on 20-07-2017 at assessee’s premises, the assessee declared additional income to make up for deficiencies and honoring the same, offered additional income of Rs.25 Lacs in her return of income as filed on 09-10-2018. The same was offered as business income. The additional income was offered to make up for excess cash, construction expenditure and gifts as stated to be made by the assessee. However, Ld. AO rejected the same and assessed additional income u/s 69A which would be taxable at higher rates as specified u/s 115BBE. The Ld. CIT(A) confirmed the same against which the assessee is in further appeal before us.
From the computation of income, it clearly emerges that the substantial source of income for the assessee is business income only. The statement as recorded from the assessee during survey has been placed on Page Nos. 31 to 37 of the paper-book. Upon perusal of replies to Q. Nos.12, 13 and 14, it could be seen that the additional income has been offered over and above the normal business profits only but not out of unknown sources. The usage of additional income, in our considered opinion, is not a relevant factor but it is the source which is relevant factor to determine the head of income. On these facts, the assessee’s claim is to be accepted. The Ld. AO is directed to accept the additional income as normal business income only.
The appeal stand allowed in terms of our above order. Order pronounced on 04-04-2025.
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