TaxTMI 
TaxTMI 
2021 (4) TMI 1141
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.... in law and on facts in confirming addition of Rs. 50 lakh as headless deemed income, though the appellant had disclosed the same as undisclosed stock as evident from profit & loss account, stock record etc. 2.2 That in the facts and circumstances of the case as well as in law, the Ld. CIT(A) ought not to have upheld the addition of Rs. 50 lakh as headless deemed income, though the appellant had disclosed the same as undisclosed stock as evident from profit & loss account, stock record etc. 3.1 The Ld.CIT(A) has erred in upholding that the income declared of Rs. 50 lakhs was not business income but headless income. The observations made by CIT(A) in this regard are not admitted and contrary to the facts of the case as well as law. It is, therefore, prayed [hat the addition of Rs. 50 lakh upheld by the CIT(A) may kindly be deleted." 3. All the grounds of appeal of the assessee are inter-connected to the issue of confirming the addition of Rs. 50 lacs as head less deemed income, therefore, for the sake of convenience, all these grounds of appeal are adjudicated together as follows:- 4. The fact in brief is that return of income declaring income of Rs.....
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....admitted and declared Rs. 50,00,000/- as taxable income but due to bank interest/charges of Rs. 74,63,173/- , the firm could not show Rs. 50,00,000/- as taxable income for A.Y.2015-16. The firm had G.P. of 1.28 % during A.Y. 2015-10 against accepted G.P. of 1.78% during AY 2014-15. In view of above, it is respectfully submitted that there were no excess cash or stock were found by survey team physically than books records and therefore in our opinion question of making addition to total income of the firm does not arise as not justifiable. The discrepancies of lower amount of cash and stock at the time of survey cannot be considered as unaccounted income and cannot be added to the income of the firm. Also Rs. 50,00,000/- undisclosed income admitted by the partner of the firm has been disclosed in Profit & Loss Account and hence again it cannot be added to the income of the firm." However, the Assessing Officer has not agreed with the submission of the assessee stating that during the course of survey u/s. 133A, the assessee had admitted income of Rs. 50 lacs, hence the same was added to the total income of the assessee. 5. Aggrieved assessee has filed appeal before t....
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....A of the Act was carried out on 8th December, 2014 at the business premises of the assessee. On physical verification of the stock, survey team has found stock of jewelery to the amount of Rs. 18,26,797/- as against stock shown in the books to the amount of Rs. 1,78,92,962/-, there was shortage of stock in trade to the amount of Rs. 1,60,66,165/-. The assessee has declared income of Rs. 50 lacs. During the course of assessment, assessing officer observed that assessee has not fully paid the advance tax on the income of Rs. 50 lacs declared during the survey as the cheques submitted during the course of survey were partly paid. Consequently, the Assessing Officer has added the amount of Rs. 50 lacs declared during the survey to the total income of the assessee. Subsequently, at the appellate stage, the ld. CIT(A) has sustained the addition reiterating the facts reported by the Assessing Officer and also placed reliance on the decision of Hon'ble Gujarat High Court in the case of Fakir Mhd. Hazi Hasan supra stating that assessee has not given satisfactory explanation regarding the source of undisclosed amount and the same was treated as headless income. On perusal of the material ....
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....) has not considered this specific submission of the assessee. We have gone through the provision of section 115BBE of the Act specifically pertaining to tax of income referred to in section 68 or 69 or section 69A or section 69B or Section 69C or Section 69D. The relevant provisions are produced as under:- "Tax on income referred to in section 68 or section 69 or section 69A or section 69B or section 69C or section 69D 115BBEE [Where the total income of an assessee- (a) includes any income referred to in section 68, section 69, section 69A, section 69B, section 69C,or section 69D and reflected in the return of income furnished under section 139 or (b) determined by the Assessing Officer includes any income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D, if such income is not covered under clause (a) the income-tax payable shall be the aggregate of (i) The amount of income-tax calculated on the income referred to an clause (a) and clause(b), at the rate of sixty percent; and (ii) The amount of income-tax with which the assessee would have been chargeable had his total income been reduced by th....