2018 (3) TMI 1872

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....is a deemed income u/s.69A and 69B of the I.T. Act, instead of business income as claimed by the appellant, as appellant do not any other source of income. The aforesaid finding and inference may please be vacated. 2. On the facts and in the prevailing circumstances of the case and the CIT(A) has erred in not following the binding principles laid down in the following decision of the Hon. Jurisdictional ITAT Pune, without assigning any reasons. * Radha Traders, Sangli V/s. Asst. CIT, Sangli (ITA 193/PN/03 - A.Y. 1999-2000 Dt. 31-08-2006) reported in PCAJ Journal of Feb, 2007... Copy enclosed (Ann.A) * Prakash Vastu Bhandar V/s. ITO reported (ITA 602/PN/04-A.Y. 2000-2001 Dt. 28-02-2006 reported in PCAJ Journal of June/July-2006 ..Co....

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....asala 4,39,900/- 5 Investment in house property Uss galli 5,00,000/-   Total 14,74,542/-  In the return, the assessee determined the current year business loss of Rs. 4,15,951/- and brought forward losses of Rs. 4,82,585/- for A.Y. 2009-10 and reduced the disclosed income by the said losses. Assessee reported earning of income from other sources. 4. During the assessment proceedings, assessee submitted that the above referred items of disclosed income or discrepancy are wholly linked to the business activities of the assessee. Explaining the same, the assessee submitted that the various gross profits mentioned at Sl.Nos. 1, and 3 of the table or the unaccounted sales or the excess cash at Sl.No.2 and unrecorded pur....

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....- was agitated by the assessee before the CIT(A). 5. CIT(A) discussed each of the items of discrepancy-linked undisclosed income and its nexus to the business activities of the assessee in her order. Eventually, the CIT(A) relied on the decision in the case of M/s. Kim Pharma Pvt. Ltd., Vs. CIT - ITA No.106 of 2011, dated 27-04-2011 and Liberty Plywood Pvt. Ltd. - ITA No.727/Chd/2012, dated 01-05-2012 for the proposition that surrendered income has to be assessed separately as deemed income without granting the benefit of setting off against the losses u/s.70 and 71 of the Act. 6. Aggrieved with the same, the assessee is in appeal before us with the grounds raised above. 7. In the Ground No.1, assessee reasoned that the deemed income ....

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....arding the excess cash of Rs. 4,93,290/- mentioned at Sl.No.2 of the table, it is the case of the assessee that the same was found at the business premises of the assessee, which was surveyed by the Revenue. The said cash was offered by the assessee during the survey action as the business income of the assessee. The same was shown in the return of income as additional income in the profit and loss account. However, the assessee could not demonstrate by explaining the sources and the manner of earning of the same from the business activities of the assessee who deals with the ITC products. He merely stated that the said income constitutes business income and should be available for set off against the business losses of the assessee in the ....

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....ibunal reads as under : "Where assessee received certain amount in cash, since he failed to explain nature and source of said receipt, same was to be treated as income under section 68 assessable under head "income from other sources and as per provisions of section 71, business losses of assessee could be set-off against said income." This is also a case where assessee failed to explain the nature and source of the cash received by that assessee and the same was treated as income u/s.68 of the Act and taxed under the head "income from other sources". The Tribunal did not allow the benefit of set off against the business losses of the assessee against the said income. Considering the above legal propositions, we are of the opinion th....