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2013 (1) TMI 495 - HC - Income TaxSegregation of the surrendered income from business income - treatment as a deemed income - whether taxing it after refusing set off u/s 70 and 71 is legally sustainable in the eyes of law? - survey u/s 133A - Held that:- As decided in Fakir Mohmed Haji Hasan v. CIT [2000 (8) TMI 44 - GUJARAT HIGH COURT] opening words of section 14 clearly leave scope for “deemed income” of the nature covered under the scheme of sections 69, 69A, 69B and 69C being treated separately, because such deemed income is not income from salary, house property, profits and gains of business or profession, or capital gains, nor as it income from “other sources” because the provisions of sections 69,69A, 69B and 69C treat unexplained investments, unexplained money, bullion etc. and unexplained expenditure as deemed income where the nature and sources of investment, acquisition or expenditure, as the case may be, have not been explained or satisfactorily explained. Therefore, in these cases, the source not being known, such deemed income will not fall even under the head “income from other sources”. Therefore, the corresponding deductions which are applicable to the incomes under any of these various heads, will not be attracted in the case of deemed incomes which are covered under the provisions of sections 69,69A, 69B and 69C of the Act in view of the scheme of those provisions - Thus surrendered income can be taxed as deemed income without setting off of the losses u/s 70 & 71 - Decided against assessee.
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