Sec. 115BBE not applicable on income surrendered by assessee if AO didn’t find unexplained credit in books: ITAT

Case details: Bajaj Sons Ltd. v. DCIT - [2021] 128 taxmann.com 406 (Chandigarh - Trib.)

Judiciary and Counsel Details

• Sanjay Garg, Judicial Member and Ms. Annapurna Gupta, Accountant Member.
• Sarbjit Garg, CA for the Appellant. 
• Smt. C. Chandra Kanta , CIT for the Respondent.

Facts of the Case

A search & seizure action was carried out at the premises of the assessee-company as well as the residential premises of its Directors. The Director of assessee-company surrendered a certain amount on account of unexplained cash. Further, an additional sum of Rs. 15 lakhs was also surrendered.

Assessing Officer (AO) treated said additional income as income from unexplained sources and invoked provisions of section 115BBE and charged tax at a higher rate. Aggreived-assessee preferred the appeal before the CIT(A) but remained unsuccessful.
Before the Tribunal, assessee submitted that neither any incriminating material nor any unexplained expenditure was found during the search action in respect of surrendered income. Thus, invocation of the provisions of section 115BBE was not justified.
The Tribunal held that the AO had not pointed out any unexplained credit in the books of account, any unexplained investment, any unexplained money, or any amount of loan repaid in respect of additional income.

ITAT Held

Therefore, the provisions of sections 68, 69, 69A, 69B, 69C, and 69D are not attracted on the surrendered amount of Rs. 15 lacs. The said amount of Rs. 15 lacs was offered in case any discrepancy is found in the books of account. However, in actual, neither any unexplained investment nor any unexplained expenditure was found during the search action. Thus, the provisions of section 115BBE were not attracted in this case.