WHETHER EVERY UNDISCLOSED INCOME EVEN IF SOURCE EXPLAINED IS TAXED AT SPECIAL REATES U/S 115BBE?
Respected Members
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Short note of today's case law for quick reference:
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[2024] 111 ITR (Trib) 46 (ITAT[Chand])
[BEFORE THE INCOME-TAX APPELLATE TRIBUNAL — CHANDIGARH "A" BENCH]
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A. P. KNIT FAB
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DEPUTY COMMISSIONER OF INCOME-TAX
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1. Excess stock found at premises of assessee.
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2. Clear nexus between excess stock and stock regularly dealt in.
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3. Nature and source of unaccounted stock was assessee’s business.
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4. Stock not having independent identity or existing independently.
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5. Deeming provisions of section 69B would not apply.
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6. Sum to be taxed at normal rates as business income.
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7. Undisclosed income if explained could be taxed as business income at normal rates.
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8. No doubt, these transactions were not recorded at the time of survey and thus qualified as unrecorded transactions satisfying one of the essential conditions.
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9. The assessee provided the necessary explanations about the nature and source of such unrecorded transactions thus it could not be said that these were unexplained transactions.
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10. Thus, it does not satisfy the second condition for invoking the deeming provisions of section 69B.
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11. The question of invoking section 115BBE does not arise.