2013 (1) TMI 495

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....89/CHD/10, for the assessment year 2006-07, claiming the following substantial questions of law:- "A. Whether the impugned orders passed by the ld. Authorities below are legally sustainable in the eyes of law? B. Whether the action on the part of the ld. Authorities below to segregate the surrendered income from business income and treat it as deemed income and taxing the same after refusing set off u/ss 70 and 71 of the Act is legally sustainable in the eyes of law? C. Whether the action on the part of the ld. Authorities below not to treat the income surrendered during survey as "income from business" and adjustable against the business losses determined for the year, is legally sustainable in the eyes of law?" 2. Briefly stated, the ....

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.... S.K. Srigiri and Bros. [2008] 298 ITR 13 (Karn). 5. The point for determination in this appeal is, whether Rs.5,00,000/- which was surrendered by the assessee during the course of survey under Section 133A of the Act would form part of business income or was assessable under Section 69A of the Act. The Assessing Officer, the CIT(A) and the Tribunal after considering the factual aspect noticed that the amount surrendered during the survey was not reflected in the books of account and no source from where it was derived was declared by the assessee and, therefore, it was deemed income of the assessee under Section 69A of the Act. The findings recorded by the Tribunal in this regard are as under:- "In the facts of the present case, we find ....

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....e assessee or the nature and source of acquisition of money, bullion etc., owned by the assessee or the source of expenditure incurred by the assessee are not explained at all, or not satisfactorily explained, then, the value of such investments and money or the value of articles not recorded in the books of account or the unexplained expenditure may be deemed to be the income of such assessee. It follows that the moment a satisfactory explanation is given about such nature and source by the assessee, then the source would stand disclosed and will, therefore, be known and the income would be treated under the appropriate head of income for assessment as per the provisions of the Act. However, when these provisions apply because no sources ....