02 July 2009
Sir, Kindly enlighten us on following matter:
A) During the financial year 2006-07 Income tax department made a survey of business premises of one of my client. In the survey My client has surrendered Income of Rs. 2756278.61/- (including the normal net profit of Rs. 256278.61) and claimed Deduction of Rs. 100000/- u/s 80C. Now my client’ case is selected for scrutiny u/s 143(3)
Sir, As per guidelines issued by CBDT regarding selection of cases for scrutiny u/s 143(3) for the financial year 2006-07 apart from other points clearly bears a point no.4 regarding selection in survey cases which is as follows:
1) Assessment in survey cases for the financial year in which survey was carried out. Exclude if following condition is fulfilled. a) Declared income, excluding any disclosure made during the survey, is not less than the declared income of the preceding assessment year.
Now In view of above criteria for selection of scrutiny u/s 143(3) in survey case we would like to enlighten whether our case fall within the preview of u/s 143(3) if following conditions are complied :-
1) That there are no impounded books or documents during the year. 2) That there is no retraction of disclosure made during the year. We have filed our income tax return to the amount of Rs. 25 Lacs of disclosure made during the survey 3) That we have filed our Income Tax Return as follows:
Financial Year 2005-06 2006-07 Asstt. year 2006-07 2007-08 Normal Business Income 256278.61 222010.00 Surrender Income 2500000.00 ------ Total Income 2756278.61 222010.00 Less: Deduction u/s 80C 100000.00 ------- Taxable Income 2656280.00 222010.00
Hence the declared income of Rs. 2.56 Lacs excluding disclosure made during the survey, is more than the declared income of the preceding assessment year Rs. 222010/-.
B) Sir, Kindly also Provide us the Definition of ‘Declared Income’
02 July 2009
Hi, As per my opinion the AO can select the case for scrutiny assessment. Generally the scrutiny assessment is compulsory for the year in which survey has been conducted. So far as impounding of books of accounts or retraction or not from the income declared during the course of survey are irrelevant from the point of view that whether a case should be selected for scrutiny assessment or not. A particular case was fit or not for scrutiny assessment as per the CBDT circular , this issue can be raised before CIT( appeals ) or higher authorities. Declared Income means the income what the assessee has declared in his return of income. Experts plz clarify if any divergent views are there.
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