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Sh. Satish Kumar Goyal Versus The JCIT, Agra

2016 (5) TMI 486 - ITAT AGRA

Unexplained credit under section 68 - taxation under the hear income from other sources - whether the loss under the head ‘business’ can be denied to be set off against the income assessable under the head ‘income from other sources’ - Held that:- Denial of such set off brought by section 115BBE was brought on the statute by Finance Act, 2012 w.e.f. 01.04.2013 i.e. for and from the A.Y. 2013-14. Therefore, when the specific denial of the set off was brought prospectively by the legislature in se .....

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In effect, we hold that the impugned amount received by the assessee is to be treated as income under section 68 of the Income Tax Act, assessable under the head “Income from other sources” and accordingly as per the provision of section 71, Business losses of the assessee are to be set off against the same. The separate addition is therefore deleted - ITA No. 143/Ag/2014 - Dated:- 4-5-2016 - Shri Bhavnesh Saini , Judicial Member And Ms. Annapurna Mehrotra, Accountant Member For the Appel .....

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y the assessee for taxation under the hear income from other sources within the meaning of Chapter IV of the Income Tax Act. 1961 as unexplained credit under section 68 of the Income Tax Act, 1961. 2. On the facts and in the circumstances of the case as well as in law the learned Commissioner of Income Tax (Appeals) grossly erred in upholding the action of learned Assessing Officer of invoking section 68 of the Income Tax Act, 1961 on the income already offered for taxation and treating the inco .....

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cumstances of the case as well as in law the learned Commissioner of Income Tax (Appeals) grossly erred in upholding the action of learned Assessing Officer in not appreciating that in deeming income under section 68, a legal fiction has been created under certain circumstances because they are actually not income but loan / gift etc. whereas under section 56(2)(vi)/(vii) read with section 2(24)(xiv)/(xv), a specific provision exists treating the receipt of sum of money without consideration as .....

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g Officer. 6. On the facts and in the circumstances of the case as well as in law the learned Commissioner of Income Tax (Appeals) grossly erred in upholding the action of learned Assessing Officer in not appreciating that even deemed income under section 68 can only be taxed under the relevant head of income in terms of provisions of section 14 of the Income Tax Act, 1961. 7. On the facts and in the circumstances of the case as well as in law the learned Commissioner of Income Tax (Appeals) gro .....

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of learned Assessing Officer of alleging that- (i) The income amounting to ₹ 4,51,29,000 declared in the return by assessee is undisclosed income of the assessee: and (ii) The assessee has concealed his income and furnished inaccurate particulars of income. 9. On the facts and in the circumstances of the case as well as in law the learned Commissioner of Income Tax (Appeals) grossly erred in upholding the action of learned Assessing Officer of- (i) Charging interest under sections 234B, an .....

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. Facts of the case relevant to the disposal of the present appeal are that assessee received cash aggregating to ₹ 4,51,29,000/- on various dates from 10.4.2009 to 07.03.2010 and treated such cash receipts as his Miscellaneous Income . Such miscellaneous income was included in the total income under the head income from other sources . 3. In fact the computation of income offered by the assessee alongwith the return of income is reproduced at page no. 2 of the assessment order as under:- .....

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e assessee, the above said misc. income was disclosed u/s 56 under the head income from other sources . However, according to the A.O., neither the names of persons from whom such cash were purportedly received nor the specific activities / details in respect of which such alleged income was received, were disclosed by the assessee during the course of assessment proceeding. The A.O. was not satisfied as to the nature and source of the purported miscellaneous income of ₹ 4,51,29,000/- and .....

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peal has been filed by the assessee before us on the above mentioned grounds of appeal. 4. At the time of hearing , Ld. Counsel for the assessee submitted that income by way of miscellaneous income was offered by the assesee on his own in the computation u/s 56 under the head income from other sources and the income so offered was thus not chargeable as deemed income u/s 68. It was further submitted by Ld. Counsel for the assessee that in any event, even the deemed income is taxable under the he .....

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. and by Ld. CIT(A) and prayed that the action of the authorities below may be confirmed. 6. After having gone through the orders passed by the lower authorities and after hearing the parties and taking into account the submissions made before us we proceed to decided the appeal as under:- Though several grounds of appeal have been raised but the dispute is in narrow field. The first issue that arises for our consideration is as to whether misc. income of ₹ 4,51,29,000/- offered by the ass .....

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me of the assessee of that previous year. A plain reading of section 68 and the jurisprudence developed in this regard clearly suggest that if any sum is found credited in the books of an assessee, it is the onus of the assessee to explain about the nature and source thereof and in case such explanation is not satisfactory, such sum may be charged to income tax as income of the assessee. 7. In the present case, it is more than evident that though assessee offered an aggregate cash receipt of  .....

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ike that merely for the reason that assessee seeks to term it as casual income. Explanation offered in this regard was too general, scanty and without reference to any basis, material or evidence. Explanation given by the assessee does not inspire any confidence. No evidence has been led, not even before us, to explain about the nature and source of such alleged receipts. Explanation given by the assessee is thus unsatisfactory & assessee failed to discharge the initial onus contained in sec .....

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Income Tax Act, 1961. We do not find any infirmity in this regard and we uphold such finding of the A.O. which was confirmed by the first appellate authority. 8. Having so held, the next question which arises for our consideration is as to under which head of income, such income is assessable. In other words, whether income covered u/s 68 is beyond the five heads of income as given in section 14 including the head income from other sources . Section 14 of the Income Tax Act, provides that unless .....

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(1) of the Income Tax Act, provides income of every kind, which is not to be excluded from the total income shall be chargeable to income tax under the head income from other sources, if it is not chargeable to income under any of the head specified in section 14 items A to E. Conjoint reading of section 14 and section 56(1) read with section 68 suggests that income referred u/s 68 would be assessable under the head income from other sources. This is so for the reason that all incomes are to be .....

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would be that such deemed income u/s 68 would be assessable under the head income from other sources and we thus so hold. In fact, Hon ble Punjab & Haryana High Court in the case of Kim Pharma P. Ltd. vs. CIT 258 CTR 454 held that deemed income u/s 69, 69A, 69B & 69C are not assessable under the head income from other sources. Hon ble Punjab & Haryana High Court relied upon Gujarat High Court decision in the case of Fakir Mohmed Hazi Hasan vs. CIT 247 ITR 290. It is important to sub .....

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hile deciding the treatment to be given to the transaction of surrendered tenancy right, following the earlier decision of the Apex Court in the case of United Commercial Bank Ltd. vs. Commissioner Of Income Tax 32 ITR 688. Hon ble Gujarat High Court held that it would be sufficient to state that the Income Tax Act, envisages taxing every income under any of the heads specified in section 14. Thus, it is evident that on this issue at least there are divergent views. It has not been brought to ou .....

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