AI Drafter 
TaxTMI 
TaxTMI 
2016 (9) TMI 260
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....ch was not recorded in the books of accounts. Assessee thereafter filed its return of income for AY 2007-08 on 25/10/2007 by declaring the total income of Rs. 1,52,96,800/-. The case was taken up for scrutiny and thereafter assessment was framed u/s.143(3) of the Act, vide order dated 30/12/2009 and the total income was determined at Rs. 1,75,00,000/- being the income that was disclosed by the partner at the time of survey. Aggrieved by the order of the Assessing Officer (AO), assessee carried the matter before the ld.CIT(A), who vide order dated 16/12/2010 (in Appeal No.CAS-II/383/09-10/197) dismissed the appeal of the assessee. Aggrieved by the order of the ld.CIT(A), assessee is now in appeal before us and has raised the following grounds:- 1. The cit(Appeals) erred in upholding the disallowance of deduction claimed by the assessee of Rs. 17,04,950/-. 1.1.The CIT(Appeals) erred in not appreciating the factual as well as the legal submissions made by the assessee at the time of hearing. 1.2.The CIT(Appeals) ought to have appreciated that the deduction claimed by the assessee were legally permissible claims under the Income Tax Act, 1961 which have been completely overloo....
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.... off Rs.1.75 crore, he admitted that the said receipts were unaccounted income of the firm for the F.Y.2006-07. All the above facts are corroborated by the fact that out of the disclosure of Rs.1.75 crores made at the time of survey, the appellant has returned income of Rs.1,57,96,800/-. The dispute is, therefore, only regarding an amount of Rs.17,04,950/- claimed as deduction against the unaccounted income of Rs.1.75 crore from undisclosed sources. The appellant's submission reproduced above in short is that in the statement recorded at the time of survey, the working partner stated that figures in pages 2,3 & 4 of the diary (Annexure BF8) related to cash amount receipt of sales for shops and offices in Green Plaza complex, during the F.Y.2006-07 and the said amount has not been recorded in the books of a/c of the firm, and the partners have withdrawn the same in cash from the firm. The appellant's contention, therefore, is that though cash amount of Rs.1.75 crore has not been accounted for in the books of a/c., it is business income and, therefore, expenses claimed against the same, including deduction u/s 40(b) of the Act, is allowable. I have duly considered the above s....
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....r section 14 of the Act, it would not be possible to classify such deemed income under any of these heads including income from "other sources" which have to be sources known or explained. When the income cannot be classified under any one of the head of income under section 14, it follows that the question of giving any deductions under the provisions which correspond to such heads of income will not arise....... The opening words of section 14 "save as otherwise provided by this Act" clearly leave scope for "deemed income" of the nature covered under the scheme of sections 69, 69A, 69B and 69C being treated separately, because such deemed is not income from salary, house property, profits and gains of business or profession, or capital gains nor is it income from "other sources" because the provisions of section 69, 69A, 69B and 69C treat unexplained investments, unexplained money, bullion etc. and unexplained expenditure as deemed income where the nature and source of investment, acquisition or expenditure, as the case may be have not been explained or satisfactorily explained. Therefore, in these cases, the source not being known, such deemed income will not fall even under the....
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....ssed in the hands of the appellant, no deduction of whatsoever in nature is allowable. I, accordingly, uphold the assessment order and dismiss the ground of appeal taken by the appellant." 3.2. Aggrieved by the order of ld.CIT(A), assessee is now in appeal before us. 3.3. Before us, ld.AR reiterated the submissions made before the AO and ld.CIT(A). He further submitted that the only business of the assessee is construction and the assessee was having no other business at the relevant time and during the course of survey, it was submitted that the cash amount was received on sale of shops and offices of Green Plaza Complex. He therefore submitted that when the assessee is having only one business and when the income from that business is declared during the course of survey, against that income the assessee can claim the remuneration and interest to partners. He further placed reliance on the decision of Hon'ble Gujarat High Court in the case of CIT vs. Shilpa Dyeing & Printing Mills (P.) Ltd. reported in (2013) 39 taxmann.com 3 (Guj.) and submitted that the Hon'ble Gujarat High Court after considering the decision in the case of Fakir Mohmed Haji Hasan Vs. CIT reported in (20....