Taxation - Income TaxQuestion 5604 of 146
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8. On 18th June, 2024, unexplained money of ` 30 lakhs u/s 69A was detected of Mr. Mahesh. Expenses of ` 10 lakhs were incurred to earn the income. He has also a brought forward business loss of ` 4,00,000. Amount of income tax payable by Mr. Mahesh on such income shall be -

Options

A` 23,40,000
B` 19,36,000
C` 12,48,000
D` 15,60,000 (1 Mark) Case Scenario-III Sandeep, a registered person in Pune, Maharashtra, is engaged in the business of providing training services to various registered and unregistered persons. During the month of October, 2024, he conducted training camps at different cities in Uttar TAXATION Pradesh for general public and received ` 3,45,000 from such camps. He was hired by Arihant Pharma Limited, registered in Goa, to provide training to its employees for total consideration of ` 2,25,000. The training was given to 20 employees at Mumbai, Maharashtra. Sandeep also gave his residential property in Mumbai to Arihant Pharma Limited for the stay of employees who joined the training. ` 10,000 per person was additionally charged by Sandeep for period of stay of 30 days. Sandeep hired a bus from Ravi (Registered in Maharashtra) at ` 50,000 for 30 days to transport trainees. The bus has enough seating capacity to transport 20 trainees. Cost of fuel is included in the consideration paid to Ravi. Sandeep also received security services from Protect You Security Limited for ` 35,000. All the amounts given above are exclusive of tax, wherever applicable. Rates of GST are 9%, 9% and 18% for CGST/SGST/IGST respectively. Subject to the information given above, all other conditions for availing ITC are complied with. Based on the above information, choose the most appropriate answer for the questions 9 to 11:
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Correct Answer

✅ Option A — ` 23,40,000

All Options:

  • A` 23,40,000 ✓
  • B` 19,36,000
  • C` 12,48,000
  • D` 15,60,000 (1 Mark) Case Scenario-III Sandeep, a registered person in Pune, Maharashtra, is engaged in the business of providing training services to various registered and unregistered persons. During the month of October, 2024, he conducted training camps at different cities in Uttar TAXATION Pradesh for general public and received ` 3,45,000 from such camps. He was hired by Arihant Pharma Limited, registered in Goa, to provide training to its employees for total consideration of ` 2,25,000. The training was given to 20 employees at Mumbai, Maharashtra. Sandeep also gave his residential property in Mumbai to Arihant Pharma Limited for the stay of employees who joined the training. ` 10,000 per person was additionally charged by Sandeep for period of stay of 30 days. Sandeep hired a bus from Ravi (Registered in Maharashtra) at ` 50,000 for 30 days to transport trainees. The bus has enough seating capacity to transport 20 trainees. Cost of fuel is included in the consideration paid to Ravi. Sandeep also received security services from Protect You Security Limited for ` 35,000. All the amounts given above are exclusive of tax, wherever applicable. Rates of GST are 9%, 9% and 18% for CGST/SGST/IGST respectively. Subject to the information given above, all other conditions for availing ITC are complied with. Based on the above information, choose the most appropriate answer for the questions 9 to 11:

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Detailed Solution & Explanation

Correct Answer: Option **A** **Explanation:** 1. **Applicability of Section 115BBE:** Under the provisions of Section 115BBE of the Income-tax Act, 1961, income tax is payable on unexplained money detected under Section 69A at a flat rate of 60%\displaystyle 60\%.
2. **Surcharge and Cess:** - A surcharge of 25%\displaystyle 25\% on such tax is levied. - Health and Education Cess is levied at 4%\displaystyle 4\% on the aggregate of tax and surcharge. - Thus, the effective rate of tax on unexplained money is: Effective Tax Rate=60%×(1+0.25)×(1+0.04)=78%\text{Effective Tax Rate} = 60\% \times (1 + 0.25) \times (1 + 0.04) = 78\%
3. **Disallowance of Deductions and Set-offs:** Under Section 115BBE(2), no deduction in respect of any expenditure or allowance or set-off of any loss is allowed to the assessee in computing their income under Section 69A. - Therefore, the expenses of ₹ 10 lakhs incurred to earn this income cannot be claimed as a deduction. - The brought forward business loss of ₹ 4,00,000 cannot be set off against this unexplained money.
4. **Tax Calculation:** Tax Payable=Unexplained Money u/s 69A×Effective Tax Rate\text{Tax Payable} = \text{Unexplained Money u/s 69A} \times \text{Effective Tax Rate} Tax Payable=₹30,00,000×78%=₹23,40,000\text{Tax Payable} = ₹ 30,00,000 \times 78\% = ₹ 23,40,000 Hence, **Option A** is the correct answer.

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