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2020 (10) TMI 1199 - AT - Income TaxIncome declared in the survey carried out u/s 133A - Disallowance of salary to partners claimed u/s.40(b) - income declared in the survey and also offered for taxation - whether the income offered by the assessee is covered u/ss 69/69A of the Act as held by the AO or can be classified as `Business income’ as claimed by the assessee? - HELD THAT:- Amount of investment is only a measure for quantifying the amount of addition. Raison d’etre for the addition is not giving any satisfactory explanation about the source of income, which was used for investment. If source is explained, there can be no addition on account of investment. We are confronted with a situation, in which both the source and destination are business inasmuch as the source of the income is business and the destination of such income is again in the nature of business assets, that is, stock, cash and receivables. As a fortiori, such an income will be considered as `Business income’ covered under Chapter IV-D of the Act forming part of book-profit for the purposes of allowing remuneration to partners. As the assessee offered ₹ 50,25,997/- in the return of income by treating the same as part of business profit, in our view, the AO was obliged to consider it the same way at the time of computation of “book profit” by allowing claim of remuneration etc. We, therefore, overturn the impugned order and restore the assessee’s calculation of remuneration to partners etc. - Decided in favour of assessee.
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