YUWAM EDUCATION PVT. LTD.,JAIPUR vs. DCIT, CIRCLE-6, JAIPUR, JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A” JAIPUR Jh jkBkSM+ deys'k t;UrHkkbZ] ys[kk lnL; ,o Jh ujsUnz dqekj] U;kf;d lnL; ds le{k BEFORE: SHRI RATHOD KAMLESH JAYANTBHAI, AM & SHRI NARINDER KUMAR, JM vk;dj vihy la-@ITA No.1029/JP/2024 fu/kZkj.k o"kZ@Assessment Year : 2016-17 cuke Yuwam Education Private Ltd. The DCIT, Vs. G-3 Prisom Tower, Opposite Old Circle-06, Subzi Mandi Lalkothi, Jaipur Jaipur LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAACY 5912 G vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@Assessee by : Sh. P. C. Parwal, CA jktLo dh vksj ls@Revenue by: Mrs. Anita Rinesh, JCIT-Sr. DR lquokbZ dh rkjh[k@Date of Hearing : 11/12/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 20/12/2024 vkns'k@ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM

By way of the present appeal the assessee challenges the findings of the Commissioner of Income Tax (Appeals), Jaipur - 4 [ for short CIT(A) ]recorded in order dated 07/06/2024 for assessment year 2016-17. That order of ld. CIT(A) has arisen because the assessee challenged assessment order dated 28.12.2018 passed under section 143(3) of the Income Tax Act, [ for short Act ] by DCIT, Circle-06, Jaipur [ for short AO ].

“1. The Ld. CIT(A) has erred on facts and in law in upholding the order of AO who has considered income of Rs. 46,68,283/- offered for tax by assessee as business receipt as chargeable to tax u/s 115BBE of the Act.

2. The Ld. CIT(A) has erred on facts and in law in confirming the order of AO in making addition of Rs. 1,03,32,004/-, being difference between the net profit as on date of survey worked out at Rs. 1,55,50,161/- and net profit declared in P & L A/c at Rs. 52,18,157/- as undisclosed income by not appreciating that such difference is on account of adjustment entries passed in books of accounts at the year end.

3. The appellant craves to alter, amend and modify any ground of appeal

4. Necessary cost be awarded to the assessee.”

3.1 Records reveals that in this case, a survey was conducted during the FY 2015-16 and the assessee surrendered undisclosed income of Rs. surrendered, considering the discrepancies found at the time of survey.The assessee was found to have shown the said undisclosed income as included in the revenue from operation head in the profit and loss account.

Ld. AO noted that the assessee should have shown these receipts as deemed income and the tax on such receipts was to be paid as per provisions of section 115BBE of the Act. Thus, vide note sheet entry dated 24.12.2018, the assessee was asked to show cause as to why surrendered amount be not taxed u/s 115BBE treating the same as deemed income of the assessee. In response the assessee submitted vide reply dated 24.12.2018 stating that the assessee had surrendered the amount of Rs.

40.99.696/- which was included in the revenue from operation head in the Profit & Loss account of assessee for FY 2015-16 and assessee had further paid tax and timely filed return for it.

Ld. AO considered the reply and found that same was suffering from certain infirmities. In this case, as per submission of the ld. AR made during proceedings, an amount of Rs. 40,99,696/- was disclosed by the assessee on account of undisclosed fee receipts. However, the same was in contradiction with the submission of the assessee at the time of survey undisclosed receipts of the assessee. Further, the survey was conducted in the month of February, when the assessee had already earned substantial revenue. Ld. AO observed that the aforesaid submissions voluntarily disclosing sum of Rs. 46,68,283/-, as his undisclosed receipts,were made, over and above the disclosed receipts. Thus, the undisclosed receipts clearly represented the income of the assessee not recorded in his books of accounts and wasrequired to be covered as per the provisions of section 115BBE of the Act.

Ld. AO further observed that the assessee had furnished its ITR along with profit and loss account wherein the assessee had reported gross receipts from tuition and registration fees worth Rs. 3,00,69,468/-. On the said amount the assessee had shown income of Rs. 52,18,157/-.

In this case, a survey u/s 133A of the Income Tax Act, 1961 was conducted at the business premises of the assessee on 17.02.2016. During survey, the assessee was confronted with his profit& loss account as on 17.02.2016. Same reflected tuition & registration fee of Rs. 3,02,53,105/- and net profit of Rs. 1,55,50,161/- including the surrendered undisclosed income of Rs. 46,68,283/-. These figures were also accepted by Shri Mansingh Shekhawat, Director of Yuwam Education Pvt. Ltd. in his clearly confirmed that he agreed with the figures being reflected in his own books of accounts which show gross receipts of Rs. 3,02,53,105/- and net profit of Rs. 1,55,50,161/- including the surrendered undisclosed income of Rs. 46,68,283/-.However, subsequently, the assessee retracted from his own admission made in light of his own books of accounts. On perusal of the profit and loss account, it was noticed that the assessee had shown the receipts from tuition and registration fees worth Rs. 3,00,69,468/-, but during the survey proceeding, considering the assessee's own books of accounts and entries made therein, he had confirmed the receipts as Rs.

3,02,53,105.28/- as on 17.02.2016. Ld. AO observed that the receipts, as on 31.03.2016, should have been more than Rs. 3,02,53,105.28/- and not less as claimed by the assessee, that on the gross receipts the assessee claimed, a net profit of Rs. 1,55,50,161/- as on 17.02.2016, after considering all the expenses, that if it is supposed that the assessee has incurred some expenses and earned receipts for the period 17.02.2016 till 31.03.2016, the net profit should not be less than Rs. 1,55,50,161/- after adjustments of the receipts and expenses. The assessee company filed its income tax return on 08.10.2016 declaring income of Rs. 52,18,157/- showing total tuition & registration fees of Rs. 3,00,69,468/. Thus, the Therefore, addition of Rs. 1,03,32,004/- (1,55,50,161-52,18,157) was made in the total income of the assessee from business or profession.

“4.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- From the Assessment order, material on record and submissions of the appellant, it is evident that the director of the appellant Sh. Mansingh Shekhawat in his statement recorded during the survey, (inter-alia reply to question no. 21), on confrontation of the Profit & Loss Account as on the survey date on 17.02.2016 accepted and confirmed that he agrees with the figures being reflected in his own books of accounts which show gross receipts of Rs. 3,02,53,105 and net profit of Rs. 1,55,50,161 including the surrendered undisclosed income of Rs. 46,68,283. However, the appellant filed its return of income declaring net profit of Rs. 52,18,157 against which the learned Assessing Officer made addition for suppression of business profits amounting to Rs. 1,03,32,004 (1,55,50,16152,18,157) being the difference of profits accepted and confirmed by the appellant during survey statements and profits actually declared in the return of income. The appellant retracted from his own admission made in light of his own books of accounts during survey and that retraction was not by way of any letter submitted with the income-tax department but it was by way of return of income wherein profits were declared at a much lower figure than admitted during the survey proceedings. During the present appellate proceedings, the appellant submitted that the appellant was under pressure during survey proceedings and he didn't have access to books of account and documents. It was further submitted on behalf of the appellant that he had no other option but to agree to the figures placed before him during the survey. The submissions of the appellant are vague and omnibus and general. On one hand the appellant himself admitted having Yuwam Education Pvt. Ltd. Jaipur vs. DCIT engaged in the malicious activity of having unrecorded undisclosed fees receipts and on the other hand after a long delay of several months the appellant is questioning the conduct of survey team without any basis. The submissions of the appellant are just a vague afterthought in order to escape tax liability on addition made during assessment proceedings.

Section 292C of the Act provides as under -

292C. (1) Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search under section 132 or survey under section 133A, it may, in any proceeding under this Act, be presumed-

(i) that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person;

(ii) that the contents of such books of account and other documents are true: and Hence, considering section 292C presumption can validly be raised that the P&L A/c generated from the books of account etc. found from the possession of the appellant belonged to the appellant and the contents true.

The appellant has not proved the documents to be false or wrong.

EVIDENTIARY VALUE OF STATEMENT RECORDED DURING SURVEY

Statement recorded during the course of survey is not a waste piece of paper but is having evidentially value.

In the case of Bachittar Singh v. Commissioner of Income-tax [2010] 328 ITR 400 it is held by the Hon’ble Punjab & Haryana High Court as under:- X X X X

In the case of judgment in the case of Dr. S. C. Gupta vs. Commissioner of Income-tax [2001] 118 Taxman 252 (Allahabad), it is held by the Hon’ble High Court as under:- x x x x

The Hon’ble Delhi High Court in the case of Raj Hans Towers (P.) Ltd. vs. CIT-V [2015] 56 taxmann.com 67 (Delhi)/(2015) 230 Taxman 567 (Delhi)/(2015) 373 ITR 9 (Delhi)[27.01.2015] held that where the appellant had not offered any satisfactory explanation regarding surrendered amount being no bonafide and it was not borne out in any contentions raised by the appellant, additions made after adjusting expenditure were justified. The relevant para of the judgments are as under:-

In the case of Pebble Investment and Finance Ltd. vs. ITO in it is held by the Hon’ble Bombay High Court as under:- x x x x In view of the above the statement recorded during the course of survey is having evidentiary value and in the case of the appellant the same are supported by the material found during the course of survey. The appellant is bound by the same until or unless the same is proved to be wrong with the help of sterling evidences.

VALIDITY OF RETRACTION

The appellant has not filed any retraction with the income-tax department by way of any letter/communication. Appellant only filed the income-tax return at a much lower income figure. This is the approach of hiding away from coming clear in front. This further shows that there was nothing to say with the appellant to counter its own directors/employees' statement given during the course of survey. In the retraction an assessee is required to reconcile the income offered in the survey with the revised additional income, if any, or nil additional income which is now being stated through the retraction letter. The difference or the reduction in the same is required to be substantiated through evidences and not merely through self-serving statements. This is necessary to afford the opportunity to the assessing authority or the investigating authority to examine the claim of the assessee in retracting from the statements made during the course of survey on merits. It is now a settled law that retraction should be filed timely as early as possible which was not done in the present case. In the present case the declaration during the course of survey was made by the appellant on the date of 17.02.2016 whereas the return of income showing the lesser income has been filed on the date of 08.10.2016 which is after a gap of 234 days and that too without any explanatory retraction letter. This shows non-bonafide approach of the appellant.

In case of PCIT V. Roshan Lal Sancheti (ITA No. 47/2018), the Hon'ble Rajasthan High Court held that the statement recorded under section 132(4) of the Act and later confirmed in statement recorded under section 131 of the Act, cannot be discarded simply by observing that the assessee has retracted the same because such retraction has to have been made within reasonable time and by filing complaint to superior authorities or otherwise brought to notice of the higher officials by filing duly sworn affidavit or statement supported by convincing evidence. Such retraction is required to be made as soon as possible or immediately after the statement of the assessee was recorded. The retraction should be supported by convincing evidence, stating that the earlier statement was recorded under pressure, coercion or compulsion.

Yuwam Education Pvt. Ltd. Jaipur vs. DCIT Pr. CIT vs. Shri Roshan Lal Sancheti [IT Appeal No. 47 of 2018, dated 30.10.2018], Hon’ble Rajasthan High Court. x x x x CIT vs. MAC Public Charitable Trust [2022] 144 taxmann.com 54 (Madras)/[2023] 450 ITR 368 (Madras) [31-10-2022] x x x x Dr. S.C. Gupta vs. CIT [2001] 118 Taxman 252 (Allahabad) x x x x Bachittar Singh vs. CIT [2010] 328 ITR 400 (Punjab & Haryana] x x x x CIT v. Hotel Mariya [2010] 195 taxman 459 (Kerala)/[2011] 332 ITR 537 (Kerala) [26-05-2010] x x x x CIT v. Lekh Raj Dhunna [2012] 20 taxmann.com 554 (Punjab & Haryana)/[2012] 344 ITR 352 (Punjab & Haryana)/[2010] 236 CTR 414 (Punjab & Haryana) [29.09.2010] x x x x CIT vs. O. Abdul Razak [2012] 20 taxmann.com 48 (Ker.) x x x x In ManharlalKasturchand Chokshi vs. ACIT [1997] 61 ITD 55 (Ahd.) x x x x In Param Anand Builders (P.) Ltd. vs. ITO [1996] 59 ITD 29 (ITAT-Mum) x x x x

The Hon'ble ITAT held that the retraction or rather denial is not established by any material/evidence and hence the same cannot be substituted for admission made by the assessee and supported by documentary evidence found. Hence, the additions made were confirmed.

Moreover, the addition made by the learned Assessing Officer was based on the incriminating material on record which was further agreed and confirmed by the director of the appellant in his statements recorded during survey. Sh Mansingh Shekhawat in his statement recorded during the survey, on confrontation of the Profit & Loss Account as on the survey date on 17.02.2016 accepted and confirmed that he agrees with the figures being reflected in his own books of accounts which show gross receipts of Rs. 3,02,53,105/- and net profit of Rs. 1,55,50,161/- including the surrendered undisclosed income of Rs. 46,68,283/-, In view of the above discussion, valid explanatory retraction was not filed, the retraction was done through the ITR in a sneaky manner, this U turn was done by the appellant after a gap of 234 days, no evidences and no reconciliation have been filed by the appellant in support of the lower figures of profit, the presumption u/s 292C has not been proved wrong by the appellant, thus the U Turn is not a valid retraction. In the appeal, the Appellant has also not placed on record the complete facts of the issue/income and also not placed on record the copy of the statement of the Director where the issue pertaining to this income would have been discussed.

Further, in the present appellate proceedings, the appellant tried to explain the difference in the gross fees receipts declared during survey (Rs. 3,02.53,106.28) and that declared in the income tax returns filed (Rs. 3,00,69,469.67) that difference was due to service tax etc. The appellant has nowhere reconciled the figures with exact working duly supported with evidences. At the same time, surprisingly, no where the appellant tried to explain the difference of Rs. 1,03,32,004 in the profit figure declared during survey (Rs. 1,55,50,161) and the profit declared in the return of income filed (Rs. 52,18,157) which was the basis for making the addition during the assessment proceedings. It seems that the appellant made an unsuccessful attempt to deviate from the profit figure toto the gross fees receipt figure. The learned Assessing Officer made additionon the basis of profit figure of Rs 1,55,50,161 which stood accepted and confirmed by the appellant during survey proceedings which was also based on the books of account and other material on record. Any difference in the gross fees receipts as claimed by the appellant is already covered in the net profit as the net profit was the basis of making the addition during the assessment proceedings which was based on admission by appellant during survey.

Hence, the addition made by the learned Assessing Officer is correct and is hereby confirmed. The relevant part of the ground of appeal in this regard is dismissed

APPLICABILITY OF SECTION 115BBE OF THE ACT

In this case, a survey was conducted during the F.Y. 2015-16 and the assessee surrendered undisclosed income of Rs. 46,68,283/- on account of undisclosed receipts. This amount was surrendered in light of the discrepancies found at the time of survey.

The assessee has shown the said undisclosed income as included in the revenue from operation head in the P&L A/c. The assessee has not shown separate bifurcation of surrendered income and revenue from regular operations which are disclosed

Firstly, the appellant has not challenged the difference of Rs. 6 lakhs in the amount on the issue in the ground of appeal. In terms of challenge to the quantum addition, the appellant has only challenged the addition of Rs. 1,03,32,004 in the ground of appeal which has already been discussed in the earlier paragraphs, Accordingly the issue of amount of addition on the issue of Rs. 46,68,283 is not in dispute and the same stands finalised

Regarding the applicability of section 115BBE of the Act it is important at the beginning itself to note that surrender on two accounts was done during the course ofsurvey. Additional income of Rs. 1,03,32,004 has been treated as business income in the assessment order has this is pertaining to the receipts of the appellant from the business. On this addition normal rates of taxes have been Yuwam Education Pvt. Ltd. Jaipur vs. DCIT applied. The second addition in the assessment order pertains to undisclosed income of Rs. 46,68,283 on account of undisclosed sources. Only on this part of the addition in the assessment order the learned AO has applied rates of taxes as per section 115BBE of the Act.

In this regard the appellant has contended that no other source of income has been identified and all the income which accrues to assessee is on account of its regular business of coaching institute which the assessee has been carrying on for last so many years. It was accordingly submitted that the fee receipts of Rs. 40.68.283/- pertains only to the regular business of the assessee and be therefore be assessed under the head "business income". It is accordingly submitted that where the receipts itself pertains to the regular business of the assessee and has been acquired by the assessee out of its regular business income and there is no adverse findings with respect to any other source of income, the provision of section 115BBE of the Act cannot be invoked in the instant case.

In the appeal, the appellant has not placed on record the complete facts of the issue/income and also not placed on record the copy of the statement of the Director where the issue pertaining to this income would have been discussed.

First of all, the contention of the appellant is contradictory to the statements of the director of the company itself. If the contention of the appellant was to be true there was no need of having bifurcated surrendered during the course of the survey. Be that as it may, the applicability of this section 115BBE is to be seen as per the applicable law. Secondly from the contentions of the appellant itself, even though not accepting, it is clear that these receipts do not pertain to the year under appeal as the receipts for the year under appeal are already found and surrendered during the survey which issue has been dealt with in earlier part of this order.

Year of Earning

The appellant has not proved that these receipts pertain to the year under appeal. The appellant has not shown the sources for these receipts ie, name, address, PAN, purpose etc. for which these receipts were received by the appellant.

If the undisclosed income earned and accumulated over the years is taxed in the year in which it is detected by the Revenue and the same is merely taxed as per normal provisions of the law such an interpretation will place a premium on dishonesty i.e it tantamounts to rewarding the dishonesty. There is no interest burden on such taxpayer even if the income was earned over past years and there is no extra tax rate and deduction of expenses/losses will also be claimed by taxpayer if the same is taxed as per normal provisions of section 28 and onwards.

When the receipts do not pertain to the year under appeal the appellant should have declared these receipts in the appropriate year to which these receipts belong and the appellant would have paid the taxes on the same along with the penalty if Yuwam Education Pvt. Ltd. Jaipur vs. DCIT any arising due to the reopening of the case of the earlier year. By offering these receipts as business receipts of the year under appeal the appellant has unfairly tried to save on these accounts. Legally as per section 28 only the income earned during the year can be taxed. The appellant has not disclosed or clarified under which subsection or clause of section 28 the income falls on this account offered by the appellant for the year.

Only by the application of sections 68/69/69A etc. the income is even if earned in earlier year but detected during the year in the form of unexplained credit/ unexplained investment etc. is to be taxed in the year in which the application of such income is found. Once sections 68/69/69A etc. are applicable, there is no dispute regarding the applicability of section 115BBE of the Act.

Head of Income:-

Regarding the contention of the appellant regarding applicability of charge to tax under a particular head, the question arises whether the income subject matter of addition is chargeable to tax as per provisions of chapters on salary, profits and gains of business and profession Or capital gain Or income from house property Or income from other sources. If the same is chargeable to tax under these chapters as per specific provisions contained therein (even before application of provisions of section 68/69/69A etc.) then section 115BBE will not have application.

Section 28 is not an inclusive definition as the opening sentence of the section 28 reads as under:-

"The following income shall be chargeable to income-tax under the head "Profits and gains of business or profession",

Accordingly, in case the appellant claims that the income is chargeable under the head business income and nowhere else, the onus is on the appellant to show under which clause of section 28 the claimed income gets covered. Even as per judgement in the Principal Commissioner of Income-tax v. Bajargan Traders, the source of investment/expenditure is clearly identifiable Le the source must be clearly identifiable.

In this regard, as per provisions of the Act, not only the source but the year of earning of income also needs to be shown for taxing in the current year under assessment/appeal as the law provides that income for each year be taxed in the ITR/assessment of that year only. This also has ramifications on the interest payable by the taxpayer because if the income was earned in earlier year and the same is being offered to tax now in that case the taxpayer is liable to pay interest for the intervening period. Sections 68/69/69A etc. also provides for year of taxation irrespective of the actual year of earning of income in normal course.

Yuwam Education Pvt. Ltd. Jaipur vs. DCIT However in case the subject matter of addition is not expressly falling under the four chapters of income heads and for the year under assessment/appeal (before application of provisions of section 68/69/69A etc.) in that case applicability of section 68/69/69A etc. is to be seen. If the sources, genuineness etc. are explained satisfactorily ie sources are out of genuine disclosed/taxed income in that case and section 68/69/69A etc. are not applicable even in that case section 115BBE will not have application.

However if the asset/credit/expenditure/income is treated as income because of the applicability of section 68/69/69A etc. in that case section 115BBE will have application. The incomes mentioned under these sections are not specific to any head of income.

Section 69C even clearly mentions that such unexplained expenditure will not be deductible under any head of income. Loans given / stock in hand/loan received etc. are otherwise not taxable as these are in the nature of asset/liability/capital nature in the hands of the taxpayer and not in the nature of revenue income. However when these are unexplained in terms of sections 68/69/69A etc. these become income and become taxable.

Section 14 of the Income-tax Act, 1961 Heads of income - Assessment year 1984- 85-Whether opening words of section 14, 'save as otherwise provided by this Act. clearly leave scope for 'deemed income of nature covered under scheme of sections 69, 69A, 698 and 69C being treated separately, because such deemed income is not income from salary, house property, profits and gains of business or profession, or capital gains, nor is it income from other sources' Held, yes. [Fakir Mohmed Haji Hasan v. Commissioner of Income-tax [2002] 120 Taxman 11 (Gujarat)/[2001] 247 ITR 290 (Gujarat)/[2001] 165 CTR 111 (Gujarat) [10-08-2000]]

These are the special provisions dealing with the situation and the incomes which are the subject matter of the contention in the appeal and being the specific provisions they are preferred and override the general provisions.

Sections 68/69/69A etc. also provides for year of taxation of asset/credit/expenditure irrespective of the year of earning of the source revenue income (if any).

Sections 68/69/69A etc. and Section 115BBE: Complete code:-

The opening words of section 14 'Save as otherwise provided by this Act' clearly leave scope for 'deemed income' of the nature covered under the scheme of sections 69, 69A, 698 and 69C being treated separately, because such deemed income is not income from salary, house property, profits and gains of business or profession, or capital gains, nor is it income from 'other sources' because the provisions of sections 69, 69A, 698 and 69C treat unexplained investments, unexplained money, bullion, etc., and unexplained expenditure as deemed income Yuwam Education Pvt. Ltd. Jaipur vs. DCIT where the nature and source of investment, acquisition or expenditure, as the case may be, have not been explained or satisfactorily explained.

Section 69C even clearly mentions that such unexplained expenditure will not be deductible under any head of income. Loans given / stock in hand/loan received etc. are otherwise not taxable as these are in the nature of asset/liability/capital nature in the hands of the taxpayer and not in the nature of revenue income. However when these are unexplained in terms of sections 68/69/69A etc. these become income and become taxable.

These are the special provisions dealing with the situation and the income which are the subject matter of the contention in the appeal and being the specific provisions they are preferred and override the general provisions. Once the income is as per these sections, there cannot be any dispute regarding the applicability of section 155BBE of the Act. These sections are in the nature of complete code in itself. In this regard it is held by Hon’ble Gujarat High Court in Fakir Mohmed Haji Hasan v. CIT [2002] 120 taxman 11 (Gujarat)/[2011] 247 ITR 290 (Gujarat)/[2001] 165 CTR 111 (Gujarat) [10.08.2000] x x x x The appellant has placed reliance on the judgment in the case of PCIT v. Bajargan Traders [2017] 86 taxmann.com 295 (Rajasthan) [12.09.2017]. In this judgment of Hon’ble High Court, inter-alia, the following paras of the order of Hon’ble ITAT have been extracted:- x x x x Hon’ble ITAT in the case of Shri Ramnarayan Birla (in dated 30.09.2016) x x x x In the case of Roshan Di Hatti vs. CIT [1997] 107 938 (SC) [08.03.1977] it is held by the Hon’ble Supreme Court as under:- x x x x In the case of Kale Khan Mohammad Hanif v. CIT [1963] 50 ITR 1 (SC) [08.02.1963] it is held by the Hon’ble Supreme Court as under:- x x x x Referring to the above judgments of Hon’ble Supreme Court, it is held by the Hon’ble ITAT in the case of Navin Shantilal Mehta v. ITO, Ward 32 (2) (4), Mumbai [2018] 90 taxmann.com 16 (Mumbai-Trib.) as under:- x x x x Suraj Bhan Oil (P.) Ltd. vs. DCIT [2022] 138 taxmann.com 19 (Madhya Pradesh)/[2022] 286 Taxman 680 (Madhya Pradesh)/[2022] 446 ITR 539 (Madhya Pradesh) [18.02.2022] x x x x SLP against the above judgment Suraj Bhan Oil (P.) Ltd. vs. DCIT [2022] 138 taxmann.com 19 (Madhya Pradesh) was dismissed by Hon’ble Supreme Court. Reported at [2022] 141 taxmann.com 477 (SC/[2022] 288 taxmann 635 (SC) [25.07.2022] x x x x Yuwam Education Pvt. Ltd. Jaipur vs. DCIT PCIT vs. Deccan Tobacco Company [2022] 137 taxmann.com 470 (SC)/[2022] 286 Taxman 558 (SC)/[11.03.2022] [Hon’ble Supreme Court] x x x x SVS Oil Mills vs. ACIT, Non Corporate Circle-6(1), Chennai [2020] 113 taxmann.com 388 (Madras)/[2020] 269 taxman 508 (Madras)/(2019) 418 ITR 442 (Madras) [26.03.2019] x x x x The Hon’ble Supreme Court in the case of CIT vs. Devi Prasad Vishwanath [1969] 72 ITR 194 (SC) [01.08.1968] has held as under:- x x x x As per the headnotes "Section 145 of the Income-tax Act. 1961 (Corresponding to section 13 of the Indian Income tax Act, 1922] Method of accounting System of accounting Assessment year 1946-47 Whether where there is an unexplained cash credit it is open to ITO to hold that it is income of assessee and no further burden lies on ITO to show that income is from any particular source - Held, yes"

As per the above judgement, the observations of the Hon'ble Allahabad High Court that because the amount was entered in the books of account of the business, there was some material to hold that the amount was income of the assessee from the business and not from some other source, were not approved by the Hon'ble Supreme Court and was reversed, as it was held by the Hon'ble Supreme Court that it assumed it was for the Income-tax Officer to indicate the source of the income which was not the correct legal position and that where there is an explained cash credit, it is open to the Income-tax Officer to hold that it is income of the assessee and no further burden lies on the Income-tax Officer to show that that income is from any particular source. It is for the assessee to prove that even if the cash credit represents income it is income from a source which has already been taxed.

Conclusion:

The appellant has neither been able to explain the year of earning of undisclosed/unexplained income, nor the source of such income. In case it is claimed that it is from business income the appellant is required to show how the same is from business sources and not from any other sources with positive evidences and appellant is also required to show the year during which such income was earned. It has also not been proved with sources details that it is only the earlier earned (during the same year) business income (manner of earning and source of earning of such income).

Unexplained income cannot be presumed to be business income. If the assessee claims so, the assessee is required to prove the same with positive evidences and not through presumptions. [Ratio of judgement in the case of Hon'ble Supreme Court in the case of Commissioner of Income-tax v. Devi Prasad Vishwanath [1969] 72 ITR 194 (SC) [01-08-1968)

Yuwam Education Pvt. Ltd. Jaipur vs. DCIT Accordingly, respectfully following the judgements of Hon'ble Supreme Court in the cases of Commissioner of Income-tax v. Devi Prasad Vishwanath [1969] 72 ITR 194 (SC) [01-08-1968), Suraj Bhan Oil (P.) Ltd. v. Deputy Commissioner of Income-tax [2022] 141 taxmann.com 477 (SC)/[2022] 288 Taxman 635 (SC)[25- 07- 2022] and Principal Commissioner of Income-tax v. Deccan Tobacco Company [2022] 137 taxmann.com 470 (SC)/[2022] 286 Taxman 558 (SC) [11-03-2022], and also in the cases of Roshan Di Hatti v. Commissioner of Income-tax [1977] 107 ITR 938 (SC) [08-03-1977], Kale Khan Mohammad Hanif v. Commissioner of Income- tax [1963] 50 ITR 1 (SC) [08-02-1963], CIT v. M.Ganapathi Mudaliar [1964] 53 ITR 623 (SC), A. Govindarajulu Mudaliar v. CIT [1958] 34 ITR 807 (SC), there can be no dispute in the facts of the present case regarding the applicability of sections 115BBE of the Act. Accordingly, the part of the ground of appeal pertaining to applicability of section 115BBE is hereby dismissed. Thereby, this ground of appeal is hereby dismissed.”

5. As the assessee did not find any favour in the appeal so filed before ld. CIT(A)/NFAC, it preferred present appeal before this Tribunal on the grounds as reproduced hereinabove.

To support the various grounds so raised, ld. AR of the assessee has filed written submissions in respect of the various grounds raised by the assessee and the same are reproduced herein below:

Submission:-

1. It is submitted that section 115BBE is attracted where the total income of the assessee includes any income referred to in section 68, 69, 69A, 69B, 69C or 69D. These sections can be invoked when assessee fails to explain the nature and source of credit in the books of accounts or there is any investment/money/expenditure which is not recorded in the books of accounts. In the present case what is found in survey is some unrecorded receipt of fees which is recorded in the books of accounts during the course of survey itself. Such receipt is business receipt. It is not unexplained cash credit or unexplained investment/expenditure. Even the AO has accepted that such receipt is included Yuwam Education Pvt. Ltd. Jaipur vs. DCIT in the P&L A/c when he reduced the amount of Rs.46,68,283/- from the profit & gains from business and separately added it for taxation u/s 115BBE of the Act in computing the total income at Pg 5 of the order. Thus when such receipt is admittedly the business receipt, section 115BBE is not applicable. Reliance in this connection is placed on the following decisions:-

Smt. Rekha Shekhawat Vs. PCIT (2022) 218 DTR 161 (Jaipur) (Trib.) In view of the fact that the unrecorded trade advances and cash in hand admitted during the course of survey u/s 133A emanated from and related to the real estate business carried on by the assessee and the same were later incorporated in the regular books of accounts, the additional income was in the nature of business income and did not fall u/s 68 and/or sec. 69 and therefore, Principal CIT was not justified in invoking the provisions of sec. 263 by holding that the assessment order was passed without considering that such additional income fell under the purview of ss. 68 and 69 and that tax was chargeable u/s 115BBE as against normal rates.

DCIT Vs. Adarsh Industrial Estate (P) Ltd. (2021) 190 ITD 878 (Mum.) (Trib.) Where assessee builder had received certain on-money receipts from buyers of flats, since nature and source of same being duly accepted by AO in remand report, same would construe only as business receipts and not as cash credit u/s 68.

PCIT Vs. Krishna Kumar Verma (2024) 8 NYPCTR 331/ 237 DTR 258 (MP) (HC) The head note of this decision reads as under:-

Appeal (High Court)—Substantial question of law—Income surrendered during search whether assessable under normal rates or as per s. 115BBE—Upholding the order a CIT(A), the Tribunal held that the AO without making any addition under s. 69A or other provisions of the Act, has accepted the returned income wherein the assessee has included the surrendered amount on account of excess stock and excess cash as business income and successfully explained the source from where the said surrendered amount was earned, which was the business activity of the assessee of trading in jewellery and gems—There was no application of s. 115BBE—In the instant case no substantial question of law arises from the order of the Tribunal as the Revenue has raised all the question of facts and have disputed the fact findings of the Tribunal in the garb of substantial questions of law which is not permitted by the statute itself—There is no perversity in the order passed by the Tribunal since the Tribunal has dealt with all the grounds raised by the appellant in the order impugned and has passed a well

2. The Ld. CIT(A) has incorrectly observed that the statement of director is not placed on record and that the alleged receipt of Rs.46,68,283/- do not pertain to the year under consideration. It may be noted that assessee has specifically pointed out before the Ld. CIT(A) (PB 3) with reference to Q. No.19 & 20 of the statement of Sh. Mansingh Shekhawat that amount of Rs.5,68,283/- is part of Rs.41,00,000/- but inspite of this the Ld. CIT(A) has not required the assessee to file the copy of this statement though it is a part of assessment record and the Ld. CIT(A) has the availability of the statement. The assessee has further explained that the receipt of Rs.79,52,475/- comprising of receipt of October 2015- Rs.31,63,135/-, November 2015- Rs.25,55,010/- & December 2015- Rs.22,34,330/- against which difference of Rs.41,00,000/- was found and surrendered by the assessee is duly incorporated in the books of accounts and thus it was incorrect on the part of Ld. CIT(A) to observe that the amount surrendered do not pertain to the year under consideration. Thus when the surrendered receipt is of the year under consideration and is a business receipt, the various case laws relied upon and the discussion made by CIT(A) on this issue is irrelevant. Hence such amount cannot be taxed u/s 115BBE of the Act.

Ground No.2 The Ld. CIT(A) has erred on facts and in law in confirming the order of AO in making addition of Rs.1,03,32,004/-, being difference between the net profit as on date of survey worked out at Rs.1,55,50,161/- and net profit declared in P&L A/c at Rs.52,18,157/- as undisclosed income by not appreciating that such difference is on account of adjustment entries passed in books of accounts at the year end.

Facts:-

1. The AO by referring to the reply to Q. No.21 of the statement of Sh. Mansingh Shekhawat, Director of the assessee observed that the gross receipt admitted in the statement is Rs.3,02,53,105/- whereas in the P&L A/c the receipt from tuition & registration fees declared is Rs.3,00,69,468/-. Further the net profit as on 17.02.2016 after taking into account all the expenses was shown at Rs.1,55,50,161/- whereas the net profit declared is Rs.52,18,157/-. Thusassessee has retracted from his own admission. Accordingly he made addition of Rs.1,03,32,004/- (1,55,50,161- 52,18,157) under the head income from business & profession.

2. The Ld. CIT(A) at Para 4.2, Pg 14 to 31 after discussing the evidentiary value of the statement recorded during survey, validity of the retraction and the various case laws with reference to the same, at Pg 30 of the order held that retraction made from the statement recorded during survey is not valid retraction and assessee has not explained the difference of Rs.1,03,32,004/- in the profit declared during survey and that declared in the return of income filed. Accordingly he confirmed the addition made by the AO.

Submission:-

3. It is further submitted that the variation in the net profit as per the P&L A/c drawn during survey and that as per audited accounts is for the reason that expenditure incurred for the month of January 2016 & February 2016 were not incorporated in the P&L A/c drawn during survey. Further certain expenditure like depreciation (Rs.26,63,677/-), audit fees (Rs.80,500/-), etc. are accounted for only at the end of the year. The statement showing the expenditure incurred for the entire year vis a vis that recorded till 17.02.2016 is at PB 47- 66 & PB 67- 94. The AO has not pointed out any discrepancy in the expenditure recorded in the books of accounts. The main reason for difference of Rs.1,03,32,004/- in profit is on account of salary (Rs.18,57,340), directors remuneration (Rs.9,75,000), RSLDC expenses (Rs.30,35,793), advertisement expenses (Rs.5,70,793), depreciation (Rs.26,63,677) and other expenses. Infact the counsel of the assessee CA Parag Pareek wanted to explain the difference in the net profit by personally attending the hearing before CIT(A) but because of mouth surgery of the counsel, only partial reply was filed on 24.05.2024 but the CIT(A) passed the appellate order without providing adequate opportunity of hearing. In any case the observation of Ld. CIT(A) that assessee has retracted from the statement is not correct in as much as assessee in the statement surrendered only Rs.46,68,283/- for the year under consideration which after rectification of mistake is duly incorporated in the books of accounts. Therefore considering the facts of the case as explained herein above, addition of Rs.1,03,32,004/- confirmed by Ld. CIT(A) is unjustified and the same be deleted.” 6. To support the contention so raised in the written submissions, reliance has been placed on the following evidence / records :

S. No. Particulars Page Filed before No. AO/ CIT(A) 1. Copy of reply filed before Ld. CIT(A) dt. 07.03.2024 1-6 CIT(A) Copy of reply filed before Ld. CIT(A) dt. 24.05.2024 7-14 CIT(A) 2. Copy of Profit & Loss account for AY 2016-17 15-16 Both 3. 4. 17-20 Both Copy of Exhibit A-5 dt.17.02.2016 21-32 Copyof statementdt.17.02.2016 recorded u/s131of 5. Both ShriMaansingh Shekhawat Yuwam Education Pvt. Ltd. Jaipur vs. DCIT 6. Copy of statement dt. 17.02.2016 recorded u/s 131 of Shri Anand 33-45 Both Joshi 7. Copy of Tuition & registration fees as per books of accounts. 46 Reference 8. 47 Copy of direct expenses as per books of accounts vis a vis expenses recorded on date of survey and the difference thereof along with ledger account as under:- - Ledger account of Salary 48-54 Reference - Ledger account of Director Remuneration 55 - Ledger account of Newspaper expenses 56 - Ledger account of Online Test Paper expenses 57 - Ledger account of Staff Welfare expense 58-66 9. 67 Copy of indirect expenses as per books of accounts vis a vis expenses recorded on date of survey and the difference thereof along with ledger account as under:- - Ledger account of Advertisement expense 68-69 - Ledger account of Electricity expense 70 Reference - Ledger account of Legal & Professional expense 71 - Ledger account of Rent 72-73 - Ledger account of RSLDC expenses 74-88 - Ledger account of RSLDC Kushalgarh 89-94 _

Ground no. 3 being general in nature and does not require adjudication. Ground no. 4 has not been raised at the time of hearing and also not dealt with in the written submission. Therefore, said ground is considered to have not been pressed.

As regards ground no 1 & 2 we note that both the parties are in agreement that issue raised requires verification on the part of the ld. AO so as to enquire into as to whether the income is of the year under consideration and if same is undisclosed income or not. Even the part of the claim of expenditure requires clarification on the part of the assessee and it has been submitted before us that assessee was not given proper opportunity of being heard. In the light of the overall contentions raised we find that the issue raised in Ground no. 1 & 2 require enquiry afresh on the part of the ld. AO. Thus, taking a liberal view of the matter on both the issues and for effective adjudication of the matter is restored to the file of the Assessing Officer who will provide one memo opportunity of being heard, to the assessee to enable the assessee to place on record all the relevant material related to the issues. Since the assessee failed to produce relevant material even before Ld. CIT(A), we deem it a fit case to impose cost on the National Relief Fund”. Assessee to produce the receipt of above costs deposit, before Ld. AO.

Resultantly, the appeal filed by the assessee is disposed for, statistical purposes.

Order pronounced in the open court on 20/12/2024.

Sd/- Sd/- ¼ujsUnz dqekj½ ¼jkBkSM+ deys'k t;UrHkkbZ½ (NARINDER KUMAR) (RATHOD KAMLESH JAYANTBHAI) U;kf;d lnL;@Judicial Member ys[kk lnL; @Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 20/12/2024 *Ganesh Kumar, Sr. PS आदेश की प्रतिलिपिअग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- Yuwam Education Pvt. Ltd., Jaipur 2. izR;FkhZ@ The Respondent- DCIT, Circle-6, Jaipur 3. vk;djvk;qDr@ The ld CIT vk;dj vk;qDr¼vihy½@The ld CIT(A) 4. विभागीय प्रतिनिधि] आयकरअपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZQkbZy@ Guard File (ITA No. 1029/JP/2024) 6. vkns'kkuqlkj@ By order,

सहायकपंजीकार@Aेेज. त्महपेजतंत