Survey surrender recorded as business income was not a cash credit, so section 115BBE could not be applied.

Income surrendered during survey for excess stock, when recorded in the books as additional business income and reflected in the trading account, did not constitute a cash credit under section 68. As section 68 was not attracted on these facts, the enhanced tax rate under section 115BBE could not be applied. The amount was therefore assessable at the regular rate in favour of the assessee.

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Issues: Whether income surrendered during survey for excess stock, when shown by the assessee as business income in the trading account and return, could be brought to tax under section 68 of the Income-tax Act, 1961 and consequently subjected to the higher rate under section 115BBE.

Analysis: The surrender was made during the relevant financial year in progress and related to excess stock found in survey. The amount was entered in the books as additional income and shown in the trading account. On these facts, the amount did not represent a cash credit within the meaning of section 68. Since section 68 was not attracted, the consequential application of section 115BBE could not be sustained.

Conclusion: The income of Rs. 13,83,663/- was not liable to taxation under section 115BBE and was correctly assessable at the regular rate in favour of the assessee.

Ratio Decidendi: Income surrendered during survey and recorded as business income in the books does not constitute a cash credit for section 68 purposes and cannot, without more, be taxed at the enhanced rate under section 115BBE.

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