2006 (9) TMI 100

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....ection 80HHC of the Income Tax Act, 1961 on its own presumption, is legally sustainable in the eyes of law ? (ii) Whether the action of the Tribunal in confirming that stock surrendered under survey is income from in other sources and not eligible for deduction under section 80HHC claimed by appellant/assessee without appreciating the ration of judgments laid down by the appellant/assessee in its correct perspective, is legally sustainable in the eyes of law ?" 2. The facts noticed in the order of the Tribunal are that the assessee filed a return declaring its income of Rs.6,67,850/- on December 29, 1999. The case was selected for scrutiny as a survey operation under section 133A of the Act was conducted on March 20, 1999. The assesse....

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....submitted that the surrender of Rs.12 lakhs made by him over and above his normal business income represents business income since this is on account of stock surrendered during survey operations at the business premises on February 30, 1999. Stocks were calculated by applying fix GP whereas during the year under consideration GP was higher. Miscellaneous income which represent excess stocks is eligible for deduction under section 80HHC of the Act since it is business income". 4. The Assessing Officer did not accept the stand of the assessee and held that the excess stocks available at the premises were not recorded in the books of account on which deduction under section 80HHC of the Act was being claimed. Mere surrender by the assessee....