INDER KUMAR NIGOTIYA,JAIPUR vs. ITO WARD,1 (1), JAIPUR

Facts

The assessee declared a sum of Rs. 1,50,00,000 under the Income Declaration Scheme (IDS), 2016, described as "Market Lending along with interest". The assessee later earned interest of Rs. 11,01,370 on this market lending. The Assessing Officer treated this interest income as unexplained money under Section 69A of the Income Tax Act, 1961, and sought to tax it at a higher rate under Section 115BBE.

Held

The Tribunal held that the assessee was granted immunity under the IDS scheme for the disclosed market lending, and this immunity extends to the interest earned on that lending. Therefore, the interest income is to be considered explained. The Tribunal also ruled that since the income is considered sourced and disclosed, it cannot be subjected to tax under Section 115BBE.

Key Issues

Whether the interest income earned on a market lending declared under the Income Declaration Scheme (IDS) can be treated as unexplained income, and if it is subject to higher tax rates under Section 115BBE when immunity was granted under IDS.