2015 (1) TMI 392

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....ses of four working Partners having equal share in remuneration. On 14.12.1994 the assessee furnsihed the Return of Income for the A.Y. 1994-95 declaring total income at Rs. 9,89,947/-. Assessment scrutiny was undertaken and ultimately, the Assessing Officer passed the order u/s.143(3) of the Act on 27.03.1995. Aggrieved by the order of Assessing Officer, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee, vide order dated 30.06.1995. Against the order of CIT(A), the Revenue filed appeal before the Tribunal. After hearing both the sides, the Tribunal partly allowed the appeal of the Revenue, vide impugned judgment and order dated 29.11.2002. Hence, this appeal by the assessee. 3. Mr. RK Patel ....

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....es that method of accounting for the purpose of ascertaining net profit should be the only income from business alone and not from other sources. Section 29 provides how the income from profits and gains of business or profession should be computed and this has to be done as provided under section 30 to 43D. By virtue of Section 5 of the said Act that total incomes of any previous years includes all income from whatever source derived. Thus for the purpose of Section 40(b)(v) read with Explanation there cannot be separate method of accounting for ascertaining net profit and / or bookprofit. The said section nowhere provides as rightly pointed by Mr. Khaitan, learned Senior Advocate that the net profit as shown in the profit and loss account....

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....e sources of income, it had no other alternative but, to offer the amount to taxation. Learned counsel Mr. Parikh, therefore, submitted that the present appeal deserves to be dismissed. 5. The appeal was admitted on 16.06.2003 in respect of the following two questions of law;       "1. Whether on the facts and in the circumstances of the case, the Tribunal is right in confirming disallowance of Rs. 4,50,000/made by the Assessing Officer under Section 40(b) of the Incometax Act, 1961?       2. Whether on the facts and in the circumstances of the case, the Tribunal is justified in treating undisclosed income offered during survey u/s.133A as "income from other sources" and not an income fro....

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....ibunal is erroneous and deserves to be quashed and set aside. Our view is buttressed by the principle rendered by the Calcutta High Court in the case of Md. Serajuddin & Bros. v. Commissioner of Incometax (supra). In view of the above, the question no.1 as to whether the Tribunal is right in confirming disallowance of Rs. 4,50,000/- made by the Assessing Officer under Section 40(b) of the Income tax Act, 1961 is answered in the negative in favour of the assessee and against the Revenue. 8. Insofar as question no.2 is concerned, it is a matter of fact that the assessee has no other source of income except income from business, as discussed in the foregoing paragraphs. Learned Standing Counsel appearing for the Revenue was not in a position ....