Question And Answer
Subject: On Money and provisions of Sec. 269SS
Querist: Manoj Jain
Answered by:
Tags: , ,
Date: April 22, 2022
Query asked by Manoj Jain

Assessee is partnership engaged in the business of real estate developers.  Survey U/sec. 133A has been conducted , where a incriminating statement giving particulars of sale of flats , name of person , agreement value and cash accepted was recorded. Partner who was not looking after accounts had accepted the amount stated in coloum cash is extra consideration received. The amount for each unit is more than 2 lakhs. At the time of assessment the said partner had retracted from the statement. However AO made this cash  as undisclosed income. Assessee later on received Notice u/Sec.269SS on the ground that assessee has received On Money more than 2 lakhs from each unit. Whether provision Sec. 269SS is applicable to such alleged receipts in cash. Pl guide

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It is a well settled position that section 269SS of the Income-tax Act, 1961 cannot be attracted for undisclosed income.

The Hon’ble Delhi High Court in the case of CIT v. Standard Brands Ltd. [2006] 285 ITR 295 (Delhi)(HC) held that when revenue had taken stand that income was undisclosed income in hands of assessee, it could not resort to proceedings under section 269SS read with section 271D of the Act.

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