Income Tax Appellate Tribunal

Saket Chakor Shah and Ors. Vs. DCIT, Central Circle 2(2)

MANU/IP/0040/2022

31.01.2022

Direct Taxation

Once the income was offered in the return, the same could not have been treated as cash credit under Section 68 or unexplained investment under Section 69 of the IT Act

The assessee is an individual who filed his return consisted of income from conducting tuitions and also carrying out the work of accounts writing. The AO completed the assessment with the income of Rs. 48.73 lakhs declared in the return in response to notice under Section 148 of the Income Tax Act, 1961 (IT Act) but treating the additional income as the one under Section 68 of the Act attracting higher rate of tax. The assessee challenged the assessment order before the learned CIT(A) urging that, re-assessment was invalid and also the treatment of cash deposits as unexplained income under Section 68 was not valid. The learned CIT(A) dismissed the assessee's appeal.

Present is a case in which the assessee earlier filed revised return, which was declared as non est. Thereafter, the assessee again filed a return pursuant to notice under Section 148 and suo motu offered additional income of Rs. 47 lakhs. Once the income was offered in the return, the same could not have been treated as cash credit under Section 68 or unexplained investment under Section 69 of the Act. The position would have been different, if the assessee had not offered additional income in his return and the AO had made the addition. That case would have justified roping in of sections 68 or 69 etc.

Since the assessee admittedly offered the income in his return pursuant to notice under Section 148 of the Act, which has been accepted by the AO as such, the learned CIT(A) was not justified in countenancing the action of AO in treating additional income as unexplained cash credit or unexplained investment attracting sections 68 or 69 of the Act and consequently, charging higher rate of taxation. The impugned order is set aside. Addition is ordered to be deleted. Appeals are allowed.

Tags : Assessment Additions Legality

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