TaxTMI 
TaxTMI 
2011 (8) TMI 611
X X X X Extracts X X X X
X X X X Extracts X X X X
.... questions of law : "(i) In the facts and circumstances of the case whether the Income-tax Appellate Tribunal was justified in treating the surrendered income as deemed income under section 69B and not treating it as income from business particularly in the absence of such deeming provisions in survey operations, as are available for search and seizure operation. (ii) In the facts and circumstances of the case whether the Income-tax Appellate Tribunal was justified in holding that the accounting of surrendered income in the trading account is not in consonance with any system of accounting relevant for accounting any deemed income. (iii) In the facts and circumstances of the case whether the Income-tax Appellat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der section 271(1)(c) of the Act, 1961. 6. The Assessing Officer held as under : "These credits are appearing in the books of account for which no description as regard to from whom money on account of credits have been received also there is no mention in the ledger regarding these transactions. The practice followed by the assessee is that the assessee used to issue receipts in token of having received the amount and make the entries in the register captioned as daily wage from April 1, 1997, to March 31, 1998. The entries relating to the above credits are not reflected in this register nor any receipts have been issued. During the course of assessment proceedings, the assessee was required to explain the position no explanat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der dated May 24, 2001 (annexure P/7) deleted the addition of Rs. 88,918. The relevant portion of the said order reads as under : "The total effect of enhancement of expenditure under the above heads was the reduction of net profit by Rs. 34,500. It appears that in the absence of reflection of the entire value of the excess stock found during survey in the income returned by the assessee, the Assessing Officer was under the impression the value of excess stock found during survey has not been added and shown in the return of income filed by the assessee. But the fact remains that the value of the excess stock found during survey has been duly credited to trading account with the result that the percentage of NP before depreciation....
X X X X Extracts X X X X
X X X X Extracts X X X X
....but in the trading account or the profit and loss account only. 10. We have heard learned counsel appearing for the parties, perused the pleadings, orders and the documents appended thereto. 11. It is crystal clear that the assessee had shown the surrendered income in the trading account or profit and loss account, but not in the computation of income. Thus, it cannot be held as business income, as if the income was treated as business income that must find place in the computation of income, which has not been done in the case. 12. The Income-tax Appellate Tribunal has rightly come to the conclusion that on survey the excess stock valued at Rs. 89,000 was found which was not shown in the computation of income.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion of the Assessing Officer, satisfactory, the excess amount may be deemed to be the income of the assessee for such financial year." 14. If there is undisclosed investment in bullion, jewellery of other valuable articles, which are not fully disclosed in the books of account the case would fall under the ambit of section 69B of the Act, 1961. In the case on hand, there was excess stock, which can be held as unexplained investment, not investment in bullion, jewellery or other valuable articles. In the entire survey, it was not found that any bullion, jewellery or other valuable articles has been found. The kirana articles cannot be held as other valuable articles. 15. "Valuable article" means an article which is valuab....