TaxTMI 
TaxTMI 
2023 (6) TMI 1332
X X X X Extracts X X X X
X X X X Extracts X X X X
..../2023 3. The assessee has taken the following grounds: "1. That the order passed by the Hon'ble CIT(A) dated 04.01.2023 is against the law and facts of the case. 2. That having regard to the facts and circumstances of the case, Hon'ble CIT(A) has erred in law and on facts in confirming the action of Ld. AO in framing the impugned assessment order u/s 143(3) of the Act and without complying mandatory conditions u/s 143/143(2) as envisaged under the Income Tax Act, 1961. 3. (a) That having regard to the facts and circumstances of the case, Ld. AO has erred in law and on facts in treating the surrendered income u/s 69 of the Act and taxing the same u/s 115BBE of the Act, without considering the facts of the case and without observing the principles of natural justice. (b) That having regard to the facts and circumstances of the case, Hon'ble CIT(A) has erred in law and on facts in confirming the action of Ld. AO in charging income tax as per provisions of section 115BBE i.e. @ 60% plus surcharge @ 25% on the assessed income, without considering the facts of the case and without observing the principles of natural justice. 4. That the app....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the case where assessee had shown cash surrender under the head income from other sources has held that cash found during survey, which was not reflected in Books of account, no source was declared by the assessee and in absence of nature of source of cash being proved; the same is not assessable to as income from business. Accordingly, the Hon'ble Punjab & Haryana High Court has uphold the order of the Id. CIT(A) in including the additional income as deemed income u/s 69A of the I.T.Act. This case is identical to the case of M/s Kim Pharma (P) Ltd. where assessee has shown surrender amount of Rs.49,89,638/- under the head " Income from other sources" as any other income." 7. The assessee in the submission placed that the addition was made on basis of the order of Hon'ble High Court of Punjab And Haryanain the case of M/s Kim Pharma P. Ltd vs CIT[2013] 35 taxmann.com 456 (Punjab & Haryana). Held "Where amount surrendered during survey was not reflected in books of account and no source from where it was derived was declared by assessee, it was assessable as deemed income of assessee under section 69A and not business income" The ld. AO fully relied on the orde....
X X X X Extracts X X X X
X X X X Extracts X X X X
....npati Mudaliar (supra).Accordingly, the addition made u/s 69A amount to Rs. 49,89,638/- is liable to be deleted and the calculation of tax u/s 115BBE is liable to be quashed. The income of the assessee will be treated as business income. 9. As noted at the beginning of this order, the facts and issue in both these appeals are common. So, our observations qua in ITA No.65/Asr/2023 are, mutatis mutandis, equally applicable to ITA No.66/Asr/2023and follows accordingly. 10. In the result, the appeals of the assessee bearing ITA No. 65/Asr/2023 & ITA 66/Asr/2023 are allowed. Order pronounced in the open court on 14.06.2023 ============= Document 1 Contentions put-forth by the assessee and AO as stated in the order and in the CIT(A) is as under : Adverse remarks against assessee by AO During the course of survey action cash of Rs. 9,53,000/- was found whereas cash as per Books of account, as on date of survey i.e. Dt. 15.02.2019 was Rs. 65,220/-. Thus, excess cash of Rs. 8,87,780/- was found. On being confronted, assessee had stated that he was unable to explain the difference and stated that he will explain it later. Counter comments of the asses....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed business receipts over the years. During the course of assessment proceedings, assessee was asked to explain the source of additional undisclosed income offered with supporting documents and to explain why entire investment of Rs. 50,00,000/- in the form of cash, purchase of stock and investment in construction of house should not be treated as investment from unexplained sources and be taxed as per provisions of Section 115BBE of the I. T. Act. But, assessee has failed to furnish any explanation even after providing repeated opportunities. As per AO, the assessee had shown surrender amount of Rs. 49,89,638/- under the head "Income from other sources" as any other income. Sir survey was incurred on the business premises of assessee, then it is a fact that cash relates to business of assessee only. Further, during the year assessee deposited cash of more than Rs.50,00,000/- in his bank accounts, this fact itself justifies the claim of assessee that the cash found was business receipts only and the expense incurred on the contruction was in cash which was earned from the business of assessee only. There is no other ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he as regard to said contention, it is stated that the said case decisions of the High court In the case of PCIT vs. M/s. Khushi Ram & Sons Pvt. Ltd., the Hon'ble High Court of Punjab & Haryana in ITA No. 126 of 2015 dated 21.07.2016 is not necessary that the surrendered amount is from business income. It could be could be on account of any other transaction legal or otherwise. Merely because an assessee carries on certain business, it does not necessarily follow that the amounts surrendered by him are on account of its business transactions. There is по presumption that absent anything else an amount surrendered by an assessee is his business income. It is for the assessee to establish the source of such surrendered amount." cannot be applicable to the assessee as: The assessee files his return u/s 44AD The assessee is not required to get his accounts audited. In the case as referred by Ld. AO of PCIT vs. M/s. Khushi Ram & Sons Pvt. Ltd., the Hon'ble High Court of Punjab & Haryana in ITA No. 126 of 2015 dated 21.07.2016the books of the assessee is being audited during the year. That in order to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the bills and documents found during survey and is evident from page 2 para 3.1 of the assessment order which reflects the undisclosed receipts of assessee out of which cash was also earned and expenditure on construction as also incurred Sir, further the Ld. AO relied upon the following The as regard to said contention, it is stated that the said case decisions of the High court In the case of The Hon'ble Supreme Court in the cases of Roshan Di Hatti vs. CIT [1977] 107 ITR 938 (SC) and Kale Khan Mohammad Hanif vs. CIT [1963] 50 ITR 1 (SC) held that the law is well- settled that the onus of proving the source of a sum of money found to have been received by an assessee is on him. Where the nature and source of a receipt, whether it be of money or other properly, cannot be satisfactorily explained by the assessee, it is open to the revenue to hold that it is the income of the assessee and no further burden lies n the revenue to show that the income is from any particular source. cannot be e applicable to the assessee as: As per case Law "The assessee is a trader carrying on two businesses, namely, manihari (general ....