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2021 (5) TMI 513 - AT - Income TaxTreating additional income earned on sale of shops as income u/s.69A - whether undisclosed income is “business income” or “income from other sources” - proportionate expenses claimed in profit and loss account in relation to undisclosed income - unaccounted income from sale of shops as deemed income u/s 69A of the Act instead of Business Income and denied set off of unabsorbed business loss/depreciation of the earlier years - HELD THAT:- Ld Counsel has submitted before us that assessee does not deal into any other business except of development of market to sell textile shops. We believe on the submission of ld Counsel, as assessee himself also during survey statement affirmed this fact, that said undisclosed income belongs to business. Therefore, we treat amount as undisclosed income of business. As partner has admitted to ₹ 7,20,00,000 as net income which is over and above regular business income of the firm FY 2009-10, relevant to assessment year 2010-11 . In view of the above admission, the amount of ₹ 7,20,00,000/- must have been offered separately in the computation of income under the head business income without claiming proportionate expenses. As per assessee the said undisclosed income of ₹ 7,25,03,689/-( ₹ 7,20,00,000 by sale of shops and ₹ 5,03,689 excess cash found during survey) is net of expenses, therefore the said income would be assessable under the head business income without deducting any expenses from it, however, as noted by us above, that assessee has claimed proportionate expenses, which is not acceptable. Therefore, we remit this issue back to the file of the assessing officer to exclude the proportionate expenses from the said undisclosed income and allow the assessee the benefit of set off of business loss/depreciation in accordance with law. The assessee is directed to file the detail of proportionate expenses claimed by him in profit and loss account in relation to undisclosed income. Appeal filed by the assessee is allowed for statistical purposes.
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