TaxTMI 
TaxTMI 
2014 (12) TMI 928
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....itted to have unaccounted income of Rs. 1,25,00,000/- on the basis of entries recorded on page Nos. 59 & 60 found during the survey and offered the same for taxation of the assessee firm as additional income for the year. He also stated that deduction u/s 80IB(10) would not be claimed on this unaccounted income. But, this income was claimed by the assessee as deduction u/s 80IB(10) in the return of income on the ground that the said income has been earned from the project undertaken by the assessee and therefore, it was business income entitled for deduction u/s 80IB(10) of the Act. During the course of assessment, the assessee could not give details of persons such as names, addresses, amounts received, PANs, dates of payments etc. from whom the amounts of Rs. 1,25,00,000/- were received by the assessee and consequently, the Assessing Officer treated the said receipts as income from other sources and disallowed the claim u/s 80IB(10) of the Act. 4. On appeal, the CIT(A) observed that it is an admitted fact that the disclosure of Rs. 1,25,00,000/- was made by the assessee on account of undisclosed receipts from the project and the evidence of these undisclosed receipts was found....
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....CIT Vs. Usha International Ltd., has held that when the assessee is cornered by the evidence or material collected by the Revenue Authorities, even by filing by revised return, the assessee can gain nothing from it and he is liable for penal provisions u/s. 271(1)(c) of the Act. The CIT(A) further observed that similarly, different Hon'ble Courts, including Apex Court, have opined that if it is gathered by Revenue that the omission was attributable to a intention or desire on the part of the assessee to hide or conceal the income so as to avoid the imposition of tax thereon, penalty for concealment is leviable on assessee. In the case of the assessee, it is claiming not even liable to paid regular taxes on the undisclosed income detected by the Department which it was forced to disclose when cornered by departmental authorities with the evidence and material collected during survey proceeding. As per admission of the assessee, undisclosed receipts of Rs. 1,25,00,000/- were not recorded in the regular books of account with the intention of not disclosing it to the Department. Thus, on one hand the appellant hides its receipts and conducts in conscious disregard to its obligation....
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....ome from other source was not justified. In the case of Deputy CIT v. Radhe Developers India Ltd., (2010) 329 ITR 1(Guj.), this Court while distinguishing the decision in the case of Fakir Mohmed Haji Hasan (supra), observed as under: "The decisions of this Court in the case of Fakir Mohmed Haji Hasan (supra) and Krishna Textiles (supra) are neither relevant nor germane to the issue considering the fact that in none of the decisions the Legislative Scheme emanating from conjoint reading of provisions of sections 14 & 56 of the Act have been considered. The Apex Court in the case of D.P.Sandu Bros. Chembur P. Ltd.,(supra) has dealt with this very issue while deciding the treatment to be given to a transaction of surrender of tenancy right. The earlier decisions of the Apex Court commencing from case of United Commercial Bank Ltd.Vs. CIT (1957) 32 ITR 688 (SC) have been considered by the Apex Court and, hence, it is not necessary to repeat the same. Suffice it to state that the Act does not envisage taxing any income under any head not specified in section 14 of the Act. In the circumstances, there is no question of trying to read any conflict in the two judgments of this Court....
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....(2) CIT vs. Suman Paper & Boards Ltd, reported in (2009) 314 ITR 119 (Guj.), wherein the Hon'ble Gujarat High Court held as under:- "The assessee claimed deduction under section 80-1 / 80-IA of the Income-tax Act, 1961,in respect of the total undisclosed income for the block period commencing from 1986-87 to January 6, 1996. The Assessing Officer rejected the claim of the assessee, The Tribunal on an interpretation of the provisions of sections 158BB(1) , 158BB(4) and 158BH as applicable to the facts and circumstances of the case held that the assessee was entitled to deduction under section 80- I or section 80-IA in respect of the undisclosed income assessed by the Assessing Officer under the block period since the undisclosed income declared in Form No. 2B was under the head "Business income" from industrial undertaking as the only activity of the assessee was that of manufacture and sale of board paper and craft paper which had been all along assessed as business income and in all the assessment years falling within the block periods. On a reference contending the Tribunal was required to consider the amended provisions and decide about availability of relief under section 80....
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....ther source of income and whatever income arising to the assessee-firm is business income and hence, computation is in accordance with Chapter-IV_D. Even otherwise, this issue is covered by the decision of Hon'ble jurisdictional High Court in the case of ACIT v. Prabhudas Parekh case No.18759/2001 decided on 27.06.2001 has dismissed the appeal of the Revenue filed against the order of the Tribunal and in this case the Tribunal in ITA No.2408/Ahd/1993 vide order dated 19.12.1999 while dismissing the appeal of the Revenue held as follows:- "... .... Therefore, as laid down by Hon'ble Supreme Court in the case of mentioned above, the practical noting must be applied to find out the head of income. The head of income has to be determined from the nature of the business the assessee was carrying on at the time of search. In this particular case, the assessee was not carrying on any other activity for earning the income. Therefore, the income disclosed by the assessee u/s 132(4) has to be assessee under business income from the common notion of a practical man. The head "income from other sources" is a residual head and the income has to be assed under that head only if the same is no....
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....c.132(4) of the Act on 25-8- 1990 and 4-9-1990 confessed unrecorded business income of Rs. 8,50,000 under Explanation 5 to sec. 271(1)(c) read with sec.132(4) of the Act and offered the same for taxation. The main issue before us for decision is whether the income of Rs. 8,50,000/- disclosed by the respondent under sec. 132(4) of the Act is income from business or the same is to be treated as income from other sources. Sec.14 of the Act defines various heads of income and all the heads are mutually exclusive. Income earned from business cannot ipso facto be taken as income from some other source. During the course of search, the assessee explained in his statement recorded under sec.132(4) that the undisclosed income was from business because his only source of income is business in sale and export of gold and silver ornaments. This statement has been accepted by the department. Therefore, the department cannot take a different view during the course of regular assessment that the income invested in Jewellery was income of the assessee from other sources. During the course of search the department could not find out any evidence to rebut the statement of the assessee that the incom....
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....orders of the lower authorities. 7. We have heard the rival submissions and perused the orders of the lower authorities and material available on record. In the instant case, we find that the Assessing Officer observed in respect of activities of the assessee during the year under consideration as follows:- "3. The assessee is a partnership firm, engaged in the activity of developing and building housing projects approved by the local authority. The assessee-firm commenced its residential project in FY 2009-10 called Nilkanth Heights, Block A, B & C at Dumbhal, Surat. During the year under consideration the assessee has not completed the said project but booked receipt from sale of flats during the year for which sale documents have been executed and shown net profit at Rs. 78,870/- after claiming deduction 80IB of the Act." 8. A survey operation u/s 133A of the Act was conducted on 27.08.2009. During the course of survey, loose documents marked as "BF-44" was found. During the course of survey, the assessee explained that in the file there are expense vouchers alongwith receipts of amounts received which is already recorded in the books of accounts. Besides, the amounts r....
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....f the said document. During the course of survey, the assessee explained that the same represents an additional income of the business of the assessee which was accepted by the survey officials. As the assessee's business was solely of 'Nilkanth Heights, Block A, B & C at Dumbhal, Surat Project', it was not open to the Department to not allow statutorily allowable deduction after accepting the same as additional income of the said business. The AR of the assessee has relied upon following decisions:- (i) Order of Hon'ble Gujarat High Court in the case of CIT vs. Mhaskar General Hospital (Guj), in Tax Appeal No.1474 of 2009, order dated 09.08.2011; (ii) CIT v. Suman Paper & Boards Ltd., (2009) 314 ITR 119; (iii) ITAT, Ahmedabad Bench order dated 19.11.2010 in the case of ACIT v. M/s. Virat Gems passed in ITA Nos.3541 & 3756/Ahd/2008. (iv) ITAT, Ahmedabad Bench order dated 21.09.2012 in the case of CIT v. M/s. Shree Padmavati Developers passed in ITA No.268/Ahd/2010. (v) ITAT, Rajkot Bench order dated 15.12.1999 in the case of ACIT v. Prabhudas S. Parekh passed in ITA No.1408/Ahd/1993. 12. We find that this Bench of the Tribunal in the case of CIT v. M/s. Shree Padm....