TaxTMI 
TaxTMI 
2021 (7) TMI 1171
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.... addition of Rs. 14,15,788/-. Addition confirmed is illegal & bad in law. 2. That the Appellant requests for leave to add or amend the grounds of appeal before the appeal is heard or disposed off." Brief Facts 1. That survey operation u/s 133A of Act were carried out at business premises of assessee and assessee surrendered Rs. 1,20,00,000/- out of which Rs. 83;00,000/- were on account of development cost of Kartar Estate Project, Phagwara. These facts have been incorporated in body of assessment order in para 2 of the assessment order. During the survey the statement of the assessee was recorded and the assessee agreed to surrender the amount. Out of total amount surrendered at Rs. 1,20,00,000/-, Rs. 89,05,000/-(Rs. - 83,00,000/-development cost + Rs. 6,05,000/- cash) related to Kartar Estates and balance 30,95,000/- was-on account of personal assets.(Page 7 of the paper book, statement of the assessee) 2. It is the case of the assessee that assessee brought in books of accounts amount of Rs. 89,95,000/- being business related entries by debiting Rs. 83500,000/- to development expenses surrendered during survey operations and Rs. 6,95,000/- to cash account & cred....
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....ome 89,95,000/ - 2. Under the head income from other sources 30,05,000/ - Total 1,20,00,000/- It is further seen that the debit of Rs. 83,00,000/- in the course of development has been neutralized by including same in the closing stock to the tune of Rs. 68,84,212/ - which means that the assessee had claimed additional debit of Rs. 14,15,788/- out of the disclosed amount of Rs. 83,00,000/- . This is to mean that the disclosure has been neutralized by the assessee only to the extent of Rs. 14,15,788/- and not Rs. 83,00,000/- . It is very simple to appreciate this issue as but for the sur render of Rs. 83,00,000/- included in the computation of total income, the return of income of the assessee could not have been Rs. 83,95,910/ - with operating net loss of Rs. 44,70,775/ - from business operations. The act ion of the Assessing Off icer in adding back Rs. 83,00,000/ - is erroneous whereas only an amount of Rs. 14,15,788/ - wrongly debited by assessee in P & L account has to be added back. The logic of the Assessing Officer in treating the said debit - P & L account is correct but the amount taken is erroneously taken as Rs. 83,00,000/ - where it s....
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....Officer had categorically that the amounts under during the course of survey was not done on account of normal business income the assessee during the year under consideration. It was further submitted that the expenditure cannot be allowed against the surrendered amount against any other income . It was also submitted that the amount surrendered was the income of the assessee from undisclosed sources, and the same cannot be claimed as expenses in the trading account. 12. We have considered the rival contention of the parties and perused the material available on record, including the judgments cited at bar during the course of hearing by both the parties. During the course of survey, the assessee had surrendered may amount of Rs. 1.20 crore on various heads including, cash unexplained pertaining to Kartar estate for Rs. 6,05,000/- and development cost of Kartar estate(project phagwarah) for Rs. 83,00,000/-. Assessing officer has opined that the amount of Rs. 83 lacs was income from other sources falling under the group of section 69A to 69 C and was not account of the business income. However, the assessee has claimed that the amount declared by the assessee was business inc....
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....e may rely upon the decision of the Jurisdictional High Court in the matter of Kim Pharma (P.) Ltd. [2013] 35 taxmann.com 456 (Punjab & Haryana) , wherein it was held as under:- "4. Learned counsel for the assessee submitted that the amount surrendered by the assessee was business income and assessable as such. He relied upon a decision of the Karnataka High Court in CIT v. S.K. Srigiri & Bros. [2008] 298 ITR 13/171 Taxman 264. 5. The point for determination in this appeal is, whether Rs. 5,00,000 which was surrendered by the assessee during the course of survey under s. 133A of the Act would form part of business income or was assessable under s. 69A of the Act. The AO, the CIT(A) and the Tribunal after considering the factual aspect noticed that the amount surrendered during the survey was not reflected in the books of account and no source from where it was derived was declared by the assessee and, therefore, it was, deemed income of the assessee under s. 69A of the Act. The findings recorded by the Tribunal in this regard are as under: "In the facts of the present case, we find that assessee during the course of survey had surrendered the income as in....
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....'other sources' which have to be sources known or explained. When the income cannot be so classified under any one of the heads of income under s. 14, it follows that the question of giving any deductions under the provisions which correspond to such heads of income will not arise. If it is possible to peg the income under any one of those heads by virtue of a satisfactory explanation being given, then these provisions of ss. 69, 69A, 69B and 69C will not apply, in which event, the provisions regarding deductions etc. applicable to the relevant head of income under which such income falls will automatically be attracted. The opening words of s. 14 'save as otherwise provided by this Act' clearly leave scope for 'deemed income' of the nature covered under the scheme of ss. 69, 69A, 69B and 69C being treated separately, because such deemed income 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 ss. 69, 69A, 69B and 69C treat unexplained investments, unexplained money, bullion etc. and unexplained expenditure as deemed income....