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2023 (8) TMI 1069 - ITAT PUNE‘Head of income’ under which the income declared during the course of survey proceedings to be assessed - Quantum of deduction allowable u/sec. 40(b) - remuneration paid to the partners - As per AO excess income declared should be assessed under the head “Income from other sources” which does not qualify for book profits as defined under the provisions of Sec. 40(b) for the purpose of computing the quantum of allowable remuneration to the partners - HELD THAT:- AO failed to note that once the income is credited to the P & L A/c, the presumption is that income is derived from business only and there is no evidence on record by the Assessing Officer to show that the assessee-appellant firm had derived this excess income under the head other than the business carried on by the assessee-appellant. Further once the income is credited to P & L A/c, it cannot be said that the source of the excess income is unexplained. The decisions relied on of Kim Pharma Pvt. Ltd. [2013 (1) TMI 495 - PUNJAB AND HARYANA HIGH COURT] and SVS Oils Mills [2019 (5) TMI 1392 - MADRAS HIGH COURT] have no application to the facts of the present case, inasmuch as, those cases are relates to ‘where no explanation as to the source of the excess stock was found and not shown in the P & L A/c. Whereas in the present case the excess income was credited to the P & L A/c and, therefore, it cannot be said that excess income is derived from income from other sources. We derive strength from the ratio of decision of Bajargan Traders [2017 (11) TMI 388 - RAJASTHAN HIGH COURT] is squarely applicable to the facts of the present case and, therefore, excess income declared during the course of survey proceedings cannot be treated as unexplained income of the assessee-appellant since credited to P & L A/c and cannot be assessed as income from other sources, but, under income from business. Appeal of assessee allowed.
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