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2021 (7) TMI 1171 - AT - Income TaxAddition of development expenses - surrender made by assessee in survey operation u/s 133A - During the course of survey, the assessee had surrendered many amount on various heads including, cash unexplained pertaining to Kartar estate and development cost of Kartar estate(project phagwarah) - AO has opined that the amount was income from other sources falling under the group of section 69A to 69 C and was not account of the business income - HELD THAT:- In the present case the assessee was not able to demonstrate the source of investment made for development of Kartar estate ( s. no 4 of surrendered statement )from the books of account of the assessee or otherwise the source of investment .Instead of showing the source of cost incurred for development of project, the assessee had treated the same to be business income in the computation and it claimed set off against the same in the trading account . In our considered opinion , the initial onus is on the assessee to show the source of investment /cost incurred for development of project and thereafter only the same can be treated as business income and as per section 71 of the Act, the losses can be set off against business income only , needful was not done, hence the income disclose during the survey for the cost incurred for development appellate is required to be treated as investment made outside the books of account and is required to be held as income from any other sources. Hence the set off the business losses can not be permitted against the income from any other source.See M/S KIM PHARMA (P) LTD. VERSUS COMMISSIONER OF INCOME TAX. PANCHKULA AND ANOTHER [2013 (1) TMI 495 - PUNJAB AND HARYANA HIGH COURT] - Decided against assessee.
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