TaxTMI 
TaxTMI 
TaxTMI 
2024 (6) TMI 215
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....ssessee supplied financial statement as called for by Ld. AO. It transpired that the assessee family was subjected to survey u/s 133A on 26-09-2016 wherein assessee admitted certain income which was also offered in the return of income as 'Business Income'. Due taxes were also paid on the same. 2.2 The assessee had deposited sum of Rs. 104 Lacs in 4 bank accounts as tabulated on page no.2 of the assessment order. The assessee attributed the cash deposit to earlier income and cash balance available with him. During survey, the assessee offered additional income of Rs. 190 Lacs which would be sufficient enough to cover the stated cash deposits. 2.3 During survey, the statement was recorded from the assessee's son wherein it was submitted that the assessee and his family members carried out money lending business. The assessee family was directed to furnish the details of outstanding debtors' balances. The list of outstanding balances as on 15.09.2016 was furnished by the assessee family which has been extracted in the assessment order. The same aggregated to Rs. 1231 Lacs. It was submitted that the family was not maintaining any books of accounts. However, the family members reflec....
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....ncome would be assessable as undisclosed investments u/s 69 which would be subjected to rate of tax as specified u/s 115BBE. Finally, business income was reduced to the extent of Rs. 190 Lacs and the same was brought to tax as 'income from other sources'. Similar assessment was framed in the case of assessee's son Shri Rameshlal Kailash. Appellate proceedings 3.1 During appellate proceedings, the assessee drew attention to the reply given by him to Question No.11 during survey proceedings and submitted that the income was offered as unaccounted income only and not as income from undisclosed sources. The assessee furnished list of debtors to whom the advances were made. The assessee confessed that the income received in earlier year was utilized for lending further money to debtors. It was clearly stated that excess debtors found during survey were out of income generated from money lending business itself. The assessee also furnished confirmation letters from the borrowers who repaid the advances during the years. The assessee also furnished Tax Audit Report u/s 44AB to prove the genuineness. The assessee, thus, submitted that the nature and source of such investments was explain....
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....oans against promissory notes which were found during the course of survey on the basis of which it transpired that there was change in debtors' balances as on 31-03-2016 and debtor's balances as on 15-09-2016. The promissory notes constitute current asset for assessee's money lending business. During the course of survey on 26-09-2016, the assessee furnished list of debtors to whom the advances were given and it was found that during this year, there was increase in advances to the extent of Rs. 4.90 Crores. Since the assessee could not explain the same, it agreed to offer the same in his return of income to the extent of Rs. 1.90 Crores whereas the balance sum of Rs. 3 Crores was offered in the hands of the assessee's son. The assessee treated the same as interest income and offered the additional income as business income and paid due taxes thereon. 5. We are of the considered opinion that sundry debtors would keep on changing continuously in view of the fact that certain advances would be given and certain advances would be received back by the assessee at any given point of time. Nevertheless, the assessee family has already offered the differential of debtors between two dat....
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....e physical stock vis-àvis book stock. The assessee brought the same into books of account by way of credit to partners' capital account with corresponding increase in book-stock. The excess stock was included in the stock register. Accordingly, the differential was separately offered to tax in the return of income as 'Business Income'. Naturally, the excess stock was acquired out of excess income regenerated from business activity only since the assessee do not have any other source of income since its inception. The entire stock was accumulated out of income from jewellery business. The undisclosed business income was ploughed back into business to acquire further stock. In such a case, the excess stock could be said to have arisen out of normal business activity only and therefore, the same would be assessable as 'business income' only in terms of decision of Hon'ble Rajasthan High Court in the case of CIT vs Bajargan Traders (supra) wherein it was held that with respect to such excess stock found during the survey, it could be said that the investment in procurement of such stock was clearly identifiable and related to regular business stock of the assessee. Therefore, th....