TaxTMI 
TaxTMI 
TaxTMI 
2024 (8) TMI 1669
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....pellate proceedings and documents impounded during the course of survey and taxed the difference of cash from books of accounts amounting Rs. 550760/- as per provisions of sec 69A read with sec 115BBE of Income Tax Act which is against the provisions of law, so the demand created by A.O. and confirmed by CIT(A) on this account should be deleted and the same should be taxed as normal business income as shown by assessee while filling his ITR. 3. The provisions of sec 69A and 115BBE are not applicable to facts of our case specially when the surrender was made in the business income only and assesses is not doing anything else other than this business, so demand created by A.O. is against the provisions of law and should be deleted. 4. That the Assessee seeks the permission to alter, add, amend any of the grounds of appeal. 3. The only issue involved in this appeal is against the confirmation of Assessing Officer's action by the ld. CIT(A) in invoking the provisions of section 69A of the Income Tax Act, 1961 (in short 'the Act') on the difference of cash found during the Survey amounting to Rs. 5,50,760/- and taxing the same as per the provisions of sectio....
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....d by the AR have gone through. It is important to emphasize here that in all the judgments quoted by the AR in his support, the Hon'ble High Courts / Ld. Tribunal Benches have very clearly held out that the AO shall give an opportunity to the assessee to establish a linkage between the surrendered income with the business income, if any. If the assessee is able to do that then the income can be considered as from business. In the case of the assessee, the AO gave an opportunity to the assessee to establish a linkage between the surrendered income under the head of 'cash' and the business income but the assessee could not establish a direct nexus between the two. Hence, from above discussion, it is clear that in all the cases discussed above, the settled position of law is that the nexus between the surrendered income and business needs to be established before the same can be treated as income from business. 5.3.2 Merely having a known business activity will not, per se, render any unexplained asset/ income as business/profession income u/s 14, unless the burden of proving the source u/s 68 to 69D is also discharged. The onus of proving that such receipts are f....
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....amounting Rs 5,50,760/- were related to business only and were duly explainable, but just to purchase piece of mind and avoid litigation, assessee made the surrender to the tune of Rs 16,42,460/- on account of Trade Recoveries and Rs 5,50,760/- excess Cash in hand, as per surrender letter dated 10/10/2018 which is read as: "During survey a Pads Containing 12 Slips totaling to Rs 16,42,460/-, was found, this pad containing 12 slips are the amount of receivables / trade recoverable and these relates to our business. These arc the recoverable pertaining to the financial year 2018-19 and are yet to be updated in our books of accounts. Further there is also difference in cash as per physical verification and the cash in hand as per hooks amounting to Rs. 5,50,760/-. The said cash also relates to our business and is vet to be updated in our account books. However to avoid any dispute and litigation, I hereby declare that the said amounts are in any case to be included in the income for the current financial year and I hereby undertake to repot the same as income for the current financial year in the Income Tax return for the assessment year 2019-20 over and above my normal Incom....
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....er. It has been held by the Hon'ble Jurisdiction High Court of Punjab and Haryana that "The statement of surrender has to be accepted in TOTO or it has get to be ignored." For that I would like to draw your kind attention to :- CIT V/s Suit. Sudarshan Gupta (2008) 10 DTR (P&H) 184 So in the light of the judgment passed by the Hon'ble jurisdictional High Court as stated above if department has agreed to the surrender they should also assessee the surrender amount as business Income and taxed the Income at Normal rate of Tax as per surrender letter & provision of Sec 115BBC read with Sec 69 should not be invoked Same was brought to the knowledge of A.O as well as CIT(A), Both of them Just ignored surrender letter and invoked provisions of Sec 115BBE which is against the principle of law settled by Hon'ble Jurisdictional High Court in ease stated above. b) Further, During Assessment proceedings Assessing officer has verified all the documents related to our business, our books of accounts along with the documents Impounded during survey proceedings, she find all the documents as well as books of accounts, along with clo....
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....filed during assessment proceedings and mealy on surmises and conjectures invoked the provisions of See 69A of Income Tax Act and taxed the Income as per provisions of Sec 115BBE, if A.O. had any doubt about the transaction, i.e., the transaction related to business or not she must have rebutted us with the same, but she failed to do so. The same was brought to the knowledge of the CIT(A), but CIT(A) also did not give any weightage to same and confirmed the order of Assessing officer. So invoking the provisions of Sec 115BBE read with Sec 69A on account of difference in cash found during survey for which explanation is duly filed by the assessee and which is not doubted by A.O is against the provisions of law. So difference of cash found during survey should be assessed as Business Income only as offered by Assessee in Surrender letter as well as in Income Tax return filed." 7. During the proceedings before us, the ld. DR relied on the orders passed by the authorities below. 8. We have considered the finding of the ld. CIT(A) on this issue in his appeal order and the arguments made by the ld. DR during the proceedings before us. As requested by the ....