|The Tax Publishers2020 TaxPub(DT) 5066 (Visakhapatnam-Trib)
INCOME TAX ACT, 1961
When two views were possible on the same issue and AO had taken one of such views and thus taxed unexplained investment in stock declared by assessee at lower rate, Pr. CIT could not be permitted to substitute his view to tax the assessee at higher rate by applying section 115BBE.
Revision under section 263 - Erroneous and prejudicial order - AO took one of the possible views as regards undisclosed investment in stock found during search -
Pr. CIT held order passed by AO as erroneous and prejudicial to the interest of revenue on the ground of AO not having taxed unexplained investment in stock declared by assessee @ 60% as per section 115BBE. Held: During the course of assessment proceedings, AO had called for explanation of assessee as to why additional income admitted by assessee should not be treated as undisclosed investment under section 69, applying provisions of section 115BBE. Assessee filed explanation, in response to notice issued under section 142(1) claiming that additional income admitted by assessee constituted business income, and same could not be assessed under section 69. Two views were possible with regard to excess stock found during the course of search in premises of assessee. Since two views were possible on assessment of excess stock as business income as well as unexplained investment as per views of Pr. CIT and assessee, AO after examining explanation took a view that excess stock required to be assessed as business income, accordingly completed assessment. Therefore, when two views were possible on the same issue and AO had taken one of such views, Pr. CIT could not be permitted to substitute his view to tax the assessee at higher rate by applying section 115BBE.
Supported by:Spectra Shares & Scrips (P) Ltd. v. CIT (2013) 36 taxmann.com 348 (AP-HC) : 2013 TaxPub(DT) 1603 (AP-HC) and G.V.R. Associates v. ITO (2017) 88 Taxmann.com 716 (Visakha-Trib.) : 2017 TaxPub(DT) 613 (Visakha-Trib).
FAVOUR : In assessee's favour.
A.Y. : 2017-18
IN THE ITAT, VISAKHAPATNAM BENCH
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