TaxTMI 
TaxTMI 
2015 (12) TMI 1801
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....steel. Survey under section 133 of the Income Tax Act, 1961 (in short 'the Act') was carried out at assessee's premises as on 5.10.2010. During the course of survey, an amount of Rs. 1.25 crores was surrendered by the assessee. The Assessing Officer noted that the assessee had shown this surrendered income as business income under the Profit & Loss Account. Referring to the case of I.T.A.T., Chandigarh Bench in the case of Kim Pharma (P) Ltd. Vs. ITO, ITA No.189/Chd/2010 for assessment year 2006-07, the Assessing Officer considered the surrendered income as deemed income. The assessee contended before the Assessing Officer that the excess cash and the receivables from the parties as per the loose papers on the basis of which surrender was m....
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....rrendered income. The learned counsel for the assessee on this issue relied on the order of the I.T.A.T., Chandigarh Bench in the case of Gaurish Steels Pvt. Ltd. in ITA No.1080/Chd/2014 dated 17.9.2015, whereby it has been held that apart from the cash, surrender made on account of sundry receivables is to be treated as business income. 6. The learned D.R. relied on the judgment of Punjab & Haryana High Court in the case of Home Tex Vs. CIT, 243 CTR 81 (P&H) and that of the I.T.A.T., Chandigarh Bench in the case of Mansarovar Forgings Pvt. Ltd. Vs. ACIT, ITA No.873/Chd/2012, dated 6.12.2012 and Smt.Promila Jain Vs. DCIT, ITA No.1449/Chd/2010 dated 25.9.2012. 7. We have heard the learned representatives of both the parties, perused th....
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....tated at the Bar that the assessee was suffering losses even at the time of survey, a copy of trading account prepared at the time of survey is placed on record. Further, during the assessment proceedings, the Assessing Officer has not been able to bring on record any evidence or material to prove that the losses were inflated by the assessee. Even the books of accounts of the assessee are not rejected. In this background, now, we see that the reliance placed by the assessee on the order of the I.T.A.T., Chandigarh Bench in the case of Gaurish Steels Pvt. Ltd.. (supra) is not out of place. In exactly the same facts as that of the present case, the I.T.A.T., Chandigarh Bench held as under : "11. These facts have not been disputed by....
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....fficer. Further, the surrender made by the assessee was on account of cash found during the course of survey, discrepancy in the cost of construction of building, discrepancy in stock and discrepancy in advances and receivables. By no stretch of imagination, any of these incomes apart from cash can be considered as income under any head other that the 'business income'. 14. Nowhere in his order the Assessing Officer has been able to bring on record the fact that the income surrendered during the course of survey was not out of the business of the assessee. Also nowhere he has objected to the heads under which the assessee had surrendered these amounts, i.e. cash, construction of building, discrepancy in stock and discrepancy in adv....
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....d u/s 154, dated 18.02.2015." The cases relied on by the learned D.R. have all been dealt in the case of Gaurish Steels Pvt. Ltdc.(supra) 10. Respectfully following the order of the Coordinate Bench, we hereby direct the Assessing Officer to allow business losses suffered by the assessee out of surrendered income on account of sundry receivables only and not out of surrendered cash. 11. During the course of hearing, the learned counsel for the assessee raised an additional ground, which reads as under : 1. "Notwithstanding the other grounds of appeal as already taken in ITA No. 1018/Chd/2014 for Asstt.Year 2011-12, it is submitted that the depreciation of Rs. 41,70,733/- being the current year depreciation be set off....