|Income declared in return as other income. Can it be covered under section 115BBE though neither found recorded in any book (section 68) nor investment (Section 69)?
|Section 115BBE(1) reads as under:
"(1) where the total income of an assessee –
a) includes any income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D, and reflected in the return of income furnished u/s. 139, or
b) determined by the Assessing Officer includes any income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D, if such income is not covered under clause (a)
the income tax payable shall be aggregate of –
i) the amount of income tax calculated on the income referred to in clause (a) and clause (b) at the rate of sixty percent; and
ii) the amount of income tax with which the assessee would have been chargeable had his total income been reduced by the amount of income referred to in clause (i)”
Thus, section 115BBE as amended by the Finance Act, 2016 w.e.f. April 1, 2017 i.e., from assessment year 2017-18 prescribes a flat rate of 60% for all income brought to tax for lack of proof as to the source under sections 68, 69, 69A, 69B, 69C and 69D, or when the Assessing Officer is unable to link the unexplained investment to real owner. The flat rate now applicable would neutralise the advantage of such disclosures in benami names in the year in which the amount is surfaced.
It would mean such income would be taxed on standalone basis, so as to be taxable even in the hands of the person, whose aggregate income including such income falling under the provisions falls below taxable limit.
Therefore, irrespective of the “head” under which it is assessable such income would be taxed at flat rate of 60%.
|CA. H. N. Motiwalla
|or section 69 or section 69B or section 69C or section 69D-Applicability of S. 115BBE, Tax on income referred in section 68
Opinion Of Eminent Legal Luminaries On Controversial Issues
Tax on income referred in section 68, or section 69 or section 69B or section 69C or section 69D-Applicability of S. 115BBE
Credit: Several of the queries and answers are reproduced with permission from the AIFTP Journal. We thank AIFTP for generously allowing us to host their research material.
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