Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (3) TMI 1872 - AT - Income TaxIncome declared during survey action - deemed income u/s.69A and 69B or business income as claimed by the appellant - appellant submitted do not any other source of income - HELD THAT:- The items at Sl.Nos.1, 3, and 4 of the table being gross profits and the unrecorded purchases, we are of the opinion that the same should constitute business income and they should be available for set off of the losses in question. To that extent, the order of CIT(A) and the AO are required to be reversed and therefore, the AO is directed to grant set off of benefit accordingly. Excess cash - we find this is a case where survey action u/s.133A of the Act resulted in the discovery of the said excess cash and there is no dispute about it. Further, it is also undisputed that the assessee failed to explain the manner of earning of the said excess cash linked to the unaccounted sales of the ITC products. Assessee failed to explain the modus-operandi of earning of such excess cash from business sources of any kind. We are of the opinion that it is reasonable to presume that assessee failed to discharge the onus on this aspect of establishing the business nature of the excess cash. This view is fortified by the legal proposition laid down in the case of Kim Pharma Pvt. Ltd. [2013 (1) TMI 495 - PUNJAB AND HARYANA HIGH COURT]. Where assessee failed to explain the nature and source of the cash received by that assessee and the same was treated as income u/s.68 of the Act and taxed under the head “income from other sources”. The Tribunal did not allow the benefit of set off against the business losses of the assessee against the said income. Excess cash of ₹ 4,93,290/- being deemed income is not to be treated as “business income” of the assessee. Further, regarding the investment in the residential house, we find it is the case of appropriation of income earned by the assessee. Thus, the claim of the assessee is unsustainable. Therefore, these parts of the claim of the assessee are dismissed. Only amount which is available for set off against the current year is brought forward loss amounts to ₹ 4,81,252/-, i.e. sum of 3 items of income mentioned at Sl.Nos. 1, 3 and 4 of the table above. AO is directed to grant the benefit of set off of the balance of current year loss of ₹ 2,65,457/- and the brought forward business losses to the extent of ₹ 2,15,795/- (i.e. ₹ 4,81,252 – ₹ 2,65,457). The balance of brought forward business loss is allowed to be carried forward to the subsequent assessment years for set off. Accordingly, the grounds raised by the assessee are partly allowed.
|