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2023 (8) TMI 143 - ITAT CHANDIGARHAddition u/s 69 - income surrendered during the course of survey - Tax on surrendered income disclosed by the assessee towards business stock applying provisions of Section 115BBE @ 60% - HELD THAT:- In the instant case, we find that through various questions raised during the course of survey, the partner of the assessee firm has been asked about the nature and source of partnership’s income and various discrepancies so found during the course of survey. The stock physically found was valued and then, compared with stock as recorded in the books of accounts, thus, there was clear nexus of stock with the assessee’s business. There is no finding that the difference in stock so found out by the authorities has any independent identity and the same was thus part and parcel of entire stock, therefore, it cannot be said that there is an undisclosed asset which existed independently and thus, what is not declared to the department is receipt from business and not any investment as it cannot be co-related with any specific asset and the difference should therefore be treated as undeclared business income rather than deemed income. What is equally relevant is that though the excess stock has been found and valued but whether the investment in the excess stock has happened during the year or the same has been carried over from the earlier years is not emerging from the findings of the AO which is also a prerequisite condition before invoking the deeming provisions of section 69 of the Act. Thus the income surrendered during the course of survey cannot be brought to tax under the deeming provisions of section 69 and the same has been rightly offered to tax under the head “business income”. In absence of deeming provisions, the question of application of section 115BBE doesn’t arise for consideration. Decided in favour of assessee.
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