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2019 (8) TMI 438 - ITAT CHANDIGARHTreatment of income surrendered during the survey - deemed income u/s 69 & 69B - whether in the nature of Business Income or deemed income - whether eligible to set off of losses against the same - HELD THAT:- The I.T.A.T. in the case of Famina Knit Fabs [2019 (5) TMI 8 - ITAT CHANDIGARH] has further held that besides the nature of income, the Act also recognizes certain incomes which are deemed to be so on account of fact that any investment asset, income or expenditure incurred by the assessee is not disclosed in its books and the source of which is also not explained. These deemed incomes are subjected to tax u/ss 69, 69A, 69B, 69C & 69D and the I.T.A.T. further held that such incomes are subjected to tax at a special rate as per the provisions of section 115BBE without allowing set off of expenses or any allowance against the same and w.e.f. 1.4.2017 without allowing set off of losses also against the same. The I.T.A.T. held this amendment to section 115BBE as prospective in nature and not applicable to earlier years. In the facts of the present case, it is not disputed that the surrender had been made on account of undisclosed debtors. Since the facts are identical to that in the case of Famina Knit Fabs (supra) and no distinguishing facts have been brought to our notice by the Ld.DR, the decision rendered in that case will also apply to the present case, following which we hold that the Ld.CIT(A) had rightly treated the surrendered income as in the nature of business income of the assessee and accordingly, allowed the benefit of set off of losses against the same. The order of the Ld.CIT(A) is accordingly, upheld. The ground raised by the Revenue is dismissed. Disallowance u/s 36(l)(iii) on investment made in the sister concern - HELD THAT:- We have gone through the order in the case of Reliance Industries Ltd. [2019 (1) TMI 757 - SUPREME COURT] and we find that it is now settled law that where sufficient own funds are available, the presumption is that the same were used for the purpose of making the investment calling for no disallowance of interest u/s 36(1)(iii)- CIT(A) in the present case, we find, has given factual findings of there being sufficient own interest free funds with the assessee in the form of share capital and reserves amounting to ₹ 1.49 crores against the investment of ₹ 10 lacs in relation to which disallowance of interest expenses was made. The factual findings of the CIT(A) have not been controverted by the Ld. DR before us. Therefore, in view of the settled position of law as above and the uncontroverted factual findings of the Ld.CIT(A) regarding the sufficiency of own funds available with the assessee, we find no reason to interfere in the order of the CIT(A) in deleting the disallowance of interest made u/s 36(1)(iii) - Decided against revenue.
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