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Section 115BBE not applicable on voluntary surrender of income to cover discrepancy
Income voluntarily surrendered during survey & Search- No addition u/s 115BBE sustainable: Chandigarh ITAT
Bajaj Sons Ltd. v. DCIT(C), Ludhiana – Date of Judgement : 24.05.2021 (ITAT Chandigarh)
(Related Assessment Year : 2017-18) – 
Short Overview of the Case:
In a search operation carried out at the Assesee-Company’s premises and at the residence of Directors whereby the director surrendered Rs. 97.11 lacs on account of unexplained cash on which due taxes were paid by him, further additional Rs. 15 lakh was offered to tax for Assessment year 2017-18 to cover any discrepancy resultant of the search operation.
Assessee disclosed Rs. 15 lacs in the revised return filed after being show-caused by the Revenue about its non-disclosure.
Revenue treated the amount as income from unexplained sources, and charged it at a higher rate of tax under section 115BBE.
In appeal, ITAT observes that Revenue did not point out any unexplained credit, unexplained investment, money, bullion or jewellery or unexplained expenditure pertaining to Rs. 15 lacs.
Assessee offered this amount is offered to cover up an discrepancies relating to business income.
ITAT held that since provisions of section 68, and section 69 to 69D are not applicable in respect of the income, provisions of section 115BBE not attracted.
ITAT directed Assessing Officer to compute tax on surrendered income of 15 lacs under normal provisions as applicable to business income.
In short, Chandigarh ITAT allows Assessee’s appeal & sets aside Revenue’s order for applying Section 115BBE.
This is the judgement which would be relevant in all the cases where disclosure were made by the assessee during income tax survey and search cases and the same was offered for taxation.