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2023 (11) TMI 386 - AT - Income TaxApplicability of Higher Rate of Tax u/s 115BBE - assessee disclosed the surrendered income as business income with explanation of source during the survey and assessment proceedings - HELD THAT:- As the expenditure incurred for creating a business asset must have been generated through the business carried out by the assessee and that expenditure laid out for the purpose of business is to be allowed deduction either as expenditure or to be capitalized on which depreciation will be allowed. In the present case, to the extent of the expenditure incurred for construction of the building, out of unexplained source is concerned, it is to be construed as income earned from the business and it will take character of the business income. The case law relied upon by the CIT(A) is distinguishable on the facts as in that case the amount surrendered during survey was not reflected in the books of account and the source from where it was derived was not declared/explained whereas in the present case the amount surrendered during survey was duly reflected in the books of account and the source it was declared/explained as business activity with due payment of Tax liability and the authorities below failed to prove the contrary to disprove source of income other than Business income. Respectfully following the order of the Co-ordinate Bench, Chandigarh in the case of M/S. ARORA ALLOYS LTD [2019 (11) TMI 410 - ITAT CHANDIGARH] we direct the Assessing Officer to treat surrendered income to the extent of expenditure on building as business income.
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