TMI Blog2010 (10) TMI 686X X X X Extracts X X X X X X X X Extracts X X X X ..... the alternate contention of the learned counsel for the assessee - The above grounds by the assessee are accordingly dismissed. depreciation on motorcar and vehicle expenses - absence of maintenance of log book - Disallowance of 20% depreciation on motorcar for probable personal use appears to be on higher side and, therefore, restrict such disallowance of depreciation to 15% - Similarly, the disallowance of Rs.50,000 out of the vehicle expenses also appears to be on higher side - Therefore, restrict such disallowance to Rs.40,000 - Thus, appeal of the assessee is accordingly partly allowed. levy of interest u/s. 234B and 234D - Since, charge of interest u/s. 234B is mandatory and consequential in nature - Similarly, since provisions of sec. 234D were bought to the statute book by the Finance Act, 2003 w.e.f 1.6.2003 and since the assessment year involved is 2005-06, therefore, the same, in our opinion, is also mandatory and consequential - Therefore, this ground by the assessee is dismissed. - ITA No. 2422/Mum/2009 - - - Dated:- 15-10-2010 - D. Manmohan, R.K. Panda, JJ. S.C. Tiwari for the Appellant Jitendra Yadav for the Respondent ORDER R.K. Pand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f readymade garments" in the last many years and since the income disclosed during survey was estimated on the basis of trial balance generated during survey, the disclosure should be treated as business income only. 4. However, the Assessing Officer was not satisfied with the explanation given by the assessee. He noted that the assessee no doubt was declaring income from the activity from the manufacture of garments for the last many years and during the course of the survey offered an additional income of Rs.50 lakhs from its garments business which was credited in the cashbook of the assessee. However, no notional amount can be credited or debited to the cashbook. The assessee has not made any disclosure on account of unexplained cash during the course of the survey. No excess cash was found during the survey operations. The disclosure was on account of excess profit of the firm during the year which was quantified on the basis of the trial balance prepared during the course of survey on the basis of regular books of account maintained. Nothing was found during the survey to suggest that the assessee has accumulated cash to the tune of Rs.50 lakhs from the manufacturing and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of account. Referring to the order of the CIT(A), he submitted that by holding that it is not the business income of the assessee, the CIT(A) is arguing differently from that of the Assessing Officer. According to the Assessing Officer it is disclosure of income and not disclosure of unexplained cash during the course of survey. Referring to the copy of the statement recorded during the course of survey, a copy of which is placed at Paper Book page 20, he drew the attention of the Bench to the reply given by the assessee to question No.7 and submitted that the assessee in its reply had stated that he undertakes to pay advance tax on the additional income of Rs.50 lakhs. Referring to pages 36 to 38 of the new compilation, he drew the attention of the Bench to the Profit and Loss A/c. for the year ending 31st March, 2005 and submitted that the disclosure is quite clear and, therefore, it cannot be said that it is not business profit. He submitted that ordinarily disclosure of business income by a businessman is to be treated as business income in normal course. Referring to the decision of Hon'ble Calcutta High Court in the case of Daulatram Rawatmull vs. CIT reported in 64 ITR 593, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nner of earning of this undisclosed income, it has not furnished the names of the parties, nature of transaction, the date and amount of receipt, etc. There is no co-relation between the foreign exchange and export turnover vis- -vis the income declared. He submitted that the two decisions relied on by the learned CIT(A) are directly on this issue, therefore, the order of the CIT(A) should be upheld. 9. We have considered the rival submissions made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various decisions relied on by both the sides. There is no dispute to the fact that the assessee during the course of survey has offered additional income of Rs.50 lakhs. We find the assessee in reply to question No.7 in his statement recorded during the course of survey has stated as under: Q.No. 7 As you have stated that all the accounts are being maintained in the computer, you are, therefore, requested to submit the copy of trial balance and P and L account as on 07.03.2005. You are also requested to submit the details of quantum of advance tax paid till date in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med up: In the business accounts of the appellant we find certain sums credited. The explanation given by the appellant as to how the amounts came to be received is rejected by all the IT authorities as untenable. The credits are accordingly treated as business receipts which are chargeable to tax. In Govindarajulu Mudaliar vs. CIT (1958) 34 ITR 807 (SC), this Court observed: "There is ample authority for the position that where an assessee fails to prove satisfactorily the source and nature of certain amounts of cash received during the accounting year, the ITO is entitled to draw the inference that the receipts are of an assessable nature." 11. That is precisely what the IT authorities have done in the present case, and we do not find any grounds for holding that their finding is open to attack as erroneous in law. (3) Lastly, the question was sought to be raised that even if the credits aggregating to Rs.2,30,346 are held to be concealed income, no levy of ex cess profits tax can be made on them without a further finding that they represented business income, and that there is no such finding. When an amount is credited in business books, it is not an unreasonable in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout the accounting period. The assessee's main activity was the cultivation, manufacture and sale of tea. For the asst. yr. 1974-75, the Tribunal on an identical set of facts upheld the view of the CIT(A) that, in such circumstances, the amount included as undisclosed income under s.68 of the Act should be treated as business income. The principles laid down by this Court in Daulatram Rawatmull's case (supra) will apply to the facts of the case too." 14. The two decisions relied on by the CIT(A) and supported by the ld DR are not applicable to the facts of the present case. In the case of National Legguard Works (supra) it was held that income surrendered by the assessee during survey following detection of unexplained stock cannot be presumed to be income from export and therefore, such income is not eligible for deduction u/s. 80HHC. Similarly in the case of Sarla Handcrafts Pvt. Ltd. (supra) it was held that the amounts surrendered during the survey on account of shortage of stock was not qualified for deduction u/s. 80HHC. However, in the instant case the issue is not relating to deduction u/s. 80HHC being income derived from export activity and the issue is treatment of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as provided in the amended provisions of Finance Act applied retrospectively. The remaining expenditure to the extent of Rs.58,48,912/- is admitted by the assessee as disallowable. The assessee has filed copies of TDS deduction certificates in form No.16 but has not filed proof regarding payment of TDS to the Government as per the requirement of the amended provisions applied retrospectively by the Finance Act, 2008. The Assessing Officer is, therefore, directed to verify the contention of the assessee and allow the expenditure credited/paid and related to the month of March, 2005 on which TDS was deducted and paid within time limit as provided in the amended provisions applied retrospectively by the Finance Act, 2008. The remaining expenditure which does not fall in the amended provisions should be disallowed and is to be treated as confirmed after verification. The ground of appeal is decided accordingly." 20. The learned counsel for the assessee referring to the amendment to section 40(a)(ia) submitted that addition can be made on account of any expenditure or professional fee paid on which tax is deductible at source and such tax has not been deducted or after deduction ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alance amount of Rs.19,46,589 he directed the Assessing Officer to verify the contention of the assessee that tax has been paid before the due date as provided in the amended provisions of Finance Act applicable retrospectively. It is the submission of the learned counsel for the assessee that in view of amendment to provisions of section 40(a)(ia) by the Finance Act, 2010 no disallowance is called for since the amendment will be applicable to all pending proceedings in view of the decision of the Hon'ble Supreme Court in the case of Allied Motors (supra). It is the submission of the learned DR that the same is applicable w.e.f. 1.4.2010 only since this is not curative in nature; therefore, it cannot be applied with retrospective effect. 22.1 The Hon'ble Supreme Court in the case of Keshavji Ravji and Co vs CIT (1990) 183 ITR 1 has held that as long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent become impermissible. The supposed intention of the legislature cannot then be applied to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words used, it is nowh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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