Harjot Singh v. Principal Commissioner Income Tax-Central, Ludhiana

Neutral Citation No:|TA-58-2024(O0&M |- IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH 164|TA-58-2024(O0&MDecided 0n:25.07.2024 Harjot Singh .... Appellant Versus Principal Commissioner Income Tax-Central, Ludhiana ....Respondent CORAM:HON'BLE MR. JUSTICE SANJEBEEV PRAKASH SHARCORAM:HON'BLE MR. JUSTICE SANJAY VASHISTH Present:Ms. Aakriti, Advocate for the appellant.SANJEEV PRAKASH SHARMA, J.(Oral)CM-11859-C[[-2024 1)In compliance of the order dated 10.07.2024 passed by thisCourt, present application has been filed under Section 151 C.P.C. prayingfor replacing the illegible annexures i.e. Annexure A-7 and A-13 and to placeon record the legible copies of the aforesaid annexures, 11)For the reasons enumerated in the application, same is allowedand the documents i.e. Annexures A-7 and A-13 are taken on record. [TTA-58-202 '+Present appeal has been filed by the assessee against the orderdated 21.08.2023 (Annexure A-13), passed by Income Tax AppellateTribunal, Amritsar Bench, Amritsar (for short, ‘TTAT’) confirming the orderpassed by the Principal Commissioner of Income Central, Ludhiana underSection 263 of the Income tax Act, 1961 (for short, the Act of 1961’) ) whereby it was held that the order passed by the Assessing Officer in favourof assessee to be erroneous and prejudicial to the interest of the revenue. 2.Learned counsel for the petitioner submitted that the petitionerhad surrendered during search operation an additional income ofRs.15,11,555/- on account of excess stock, construction of residential houseand renovation of business premises. The AO after hearing, considered theSaid aspect and had assessed the income from professional usage beforedepreciation and interest apart from income under Section 44 AD of the Actoft 1961 and reached to the conclusion of overall income to beRs.39,15,840/- for assessment year 2018-19. 4+There was no occasion to interfere with the order passed by the AO byexercising powers under Section 263 of the Act of 1961 and power underSection 263 of the Act of 1961 can only be invoked where the order of theAO is erroneous and prejudicial to the interest of the revenue and not in cases where there can be two opinion related to the assessment. 4.We have carefully considered the submissions that AO hasreached to the aforesaid conclusion giving the benefit and considering theincome in terms of Section 44AD of the Act. The said aspect was consideredby the PCIT under Section 263 of the Act of 1961 and it was noticed asunder: “TAIn so far as professional receipts of Rs.13,38,500/- and thecorresponding expending expenses of Rs.22,858,492/- as well as irespect of retail sale of medicine, It was seen that the assessee hadneither got his accounts audited from the accountant nor furnished Neutral Citation No:|TA-58-2024(O0&M report of such audit as per provisions of section 44AB. Theassessee's case, prima facie was covered u/s 44ADA of the Act butthe return ofIncome filed was not in accordance with the provisionsofsection 44ADA ofthe Act. It is made clear that there is no adverseInference with regard to Income from Salary, House Property ordeduction under chapter VIA. Briefly stated, it was observed thatsurrendered Income of Rs.15,11,555/- was to be assessed under thehead incomefrom other sources at special rate u/s II5BBE, Further,taxability of professional receipts were required to be assessed inaccordance with provisions of section 44ADA of the Act @ 50%. Inview of the aforesaid order of the AO wasfound to be erroneous andprejudicial to the interest ofthe revenue.7 Thus, we find that the assessment under the head income fromother sources was to be done under Section 115 BBE, which is reproducedas under: cLTISBBETax on income referred to in section 68 or section 69or Section 69A or section 69B or section 69C or section 69D. (D)Where the total income ofan assessee,— Thus, we find that the assessment under the head income fromother sources was to be done under Section 115 BBE, which is reproducedas under: cLTISBBETax on income referred to in section 68 or section 69or Section 69A or section 69B or section 69C or section 69D. (D)Where the total income ofan assessee,— (a)includes any income referred to in section 68, section69, section 69A, section 69B, section 69C or section 69Dand reflected in the return of income furnished undersection 139; or (b)determined by the Assessing Officer includes anyincome referred to in section 68, section 69, section 69A,section 69B, section 69C or section 69D, if such incomeis not covered under clause (a), the income-tax payableshall be the aggregate of— (i) the amount of income-taxcalculated on the income referred to in clause (a) andclause (b), at the rate of sixty per cent; and (il) the Neutral Citation No:|TA-58-2024(O0&M amount of income-tax with which the assessee wouldhave been chargeable had his total income been reducedby the amount ofincome referred to in clause (1). (2)Notwithstanding anything contained in this Act, nodeduction in respect ofany expenditure or allowance or Set offofany loss shall be allowed to the assessee under any provisionof this Act in computing his income referred to in clause (a) andclause (b) ofsub-section (1).” 5.In view of above, we find that the assessment in accordancewith provisions of Section 44 ADA of the Act of 1961 has to be @ 50 % andthus, the AO has erred in making its assessments and consequently, theorder is prejudicial to the interest of the revenue. Therefor, the order underSection 263 of the Act of 1961, has rightly been passed and same has beenupheld by the Income Tax Appellate Tribunal. Accordingly, this Court doesnot deem it fit to interfere with the said orders and the present appeal ishereby dismissed. BSANJEEV PRAKASH SHARMA]JUDGE 25.07.2024rashmiWhether speaking/reasonedWhether reportable? ISANJAY VASHISTH]JUDGE Yes/NoYes/No