Satisfaction of AO u/s 69C should be Subjective: ITAT deletes Income Tax Addition [Read Order]
![Satisfaction of AO u/s 69C should be Subjective: ITAT deletes Income Tax Addition [Read Order]](https://www.taxscan.in/wp-content/uploads/2022/10/ITAT-Income-Tax-Addition-taxscan.jpeg "Satisfaction of AO u/s 69C should be Subjective: ITAT deletes Income Tax Addition [Read Order]")
The Income Tax Appellate Tribunal (ITAT), Bangalore Bench, has recently in an appeal filed before it, while deleting the Income Tax Addition, held that satisfaction of Assessing Officer (A.O), under section 69C of the income tax act should be subjective. The aforesaid observation was made by the Tribunal when an appeal was preferred before it by an assessee as against the order of...
The Income Tax Appellate Tribunal (ITAT), Bangalore Bench, has recently in an appeal filed before it, while deleting the Income Tax Addition, held that satisfaction of Assessing Officer (A.O), under section 69C of the income tax act should be subjective.
The aforesaid observation was made by the Tribunal when an appeal was preferred before it by an assessee as against the order of the Commissioner of Income Tax (Appeals)-11, Bengaluru dated 18.03.22 the assessment year 2018-19.
The grounds of the assessee’s appeal being that the Commissioner of Income Tax (A) erred on facts and the circumstances of the case in dismissing the Appeal filed by the Appellant against the order passed under section143(3) of the Income Tax Act, and further that he was wrong to treat the income in question as separate income, bringing the same to tax at higher percentage as underreported income, the Tribunal observed as follows:
“In the present case, the assessee is in the business of running a diagnostic centre and the only source of income is the receipts from patients which is stated to be the source for unexplained expenditure. That being the case the AO has not brought any contrary material on record to state that the source for the expenditure was other than from business income and has formed the opinion based on conjectures and surmises.”
“While exercising the quasi-judicial functions, the administrative authorities have to reach satisfaction on the basis of material available and not on conjectures and surmises. The test of reasonableness has to be satisfied which in our view failed in the case under consideration”, the Bench added.
Thus, finally drawing its conclusion, it ruled:
“Therefore, we are of the view that the additional income offered cannot be taxed u/s. 115BBE and the impugned addition is hereby deleted. Accordingly, the assessee is allowed to set off the current year loss against the additional income offered to tax as business income.”
To Read the full text of the Order CLICK HERE
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
