TaxTMI 
TaxTMI 
2025 (5) TMI 2327
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.... in dismissing the appeal of the assessee and confirming the order of the Assessing Officer and wrongly treated the surrendered amount of Rs 50,00,000/- on account of business advances, building construction, stock and other misc discrepancies found during the course of survey as deemed income u/s 69 and to be taxed as per provisions of Section 115BBE of the Income Tax Act, 1961. 2. That the Ld, CIT (A) has grossly erred in charging the nature of income as unexplained investment, instead of business income, as declared during the course of survey without any basis and while doing so, he has failed to appreciate the judgments of Jurisdictional Bench of ITAT tn the case of DDK Spinning Mills in ITA bearing No, 19/Chd/2023,dated 29.11....
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....Sections 69 and 69C, on the ground that the source of the income had not been satisfactorily explained. The AO accordingly invoked Section 115BBE and taxed the surrendered amount at the enhanced rate applicable to deemed income. 5. Against the order of the Ld. AO the assessee went in appeal before the Ld. CIT(A). During the appellate proceedings, it was submitted that the surrendered amount pertained to transactions carried out in the normal course of business. The assessee asserted that it had no other source of income and that the entire surrender arose from business-related discrepancies such as stock differences, building construction, and advances traceable to business dealings. The income had been duly disclosed and accounted for i....
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....rrendered income as unexplained investment is incorrect both in fact and in law. Therefore, it is respectfully requested that the addition made under Section 69 be deleted and the income be rightly assessed as business income. 9. Per contra, the Ld. DR relied on the order of the lower authorities. 10. We have heard the rival contentions and perused the material available on record. It is an undisputed fact that the assessee is engaged in the trading of tiles and sanitary goods for several years, and the surrendered income was incorporated in the audited financial statements and declared in the return of income as part of the business income. The surrender had been made voluntarily during the survey, and the letter of surrender as well....
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....e meaning of Section 69. 10.4. In the present case, the surrendered amount was linked with building construction (godown used for business), advances for business dealings, and stock-related discrepancies, were interlinked and closely connected with the business activity of the assessee therefore the business character of these items was not rebutted. The tax auditor accepted the surrender as part of business income, and the books of account reflect the same. The AO has not brought any iota of evidence to indicate that the source of funds was from unexplained or undisclosed activity. 10.5. It is further noted that the amendment to Section 115BBE enhancing the tax rate was brought into effect from 01.04.2017, i.e., A.Y. 2018-19 onwards....