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2016 (7) TMI 1100 - PUNJAB & HARYANA HIGH COURT

2016 (7) TMI 1100 - PUNJAB & HARYANA HIGH COURT - TMI - Income surrendered during survey - whether is to be taxed u/s 69-A - whether set off losses u/s 70 and 71 is not permissible against such income? - Held that:- This is not an admission on the appellant’s part that the surrendered amount is from the assessees business income. This observation is in respect of the GP rate of 10.85%. The appellant by this observation accepted that the surrendered amount is from business income. The observation .....

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rrendered by an assessee is his business income. It is for the assessee to establish the source of such surrendered amount. - Income Tax Appeal No. 126 of 2015 (O&M) - Dated:- 21-7-2016 - S. J. Vazifdar, ACJ And Deepak Sibal, JJ. Mr. Rajesh Katoch, Advocate, for the appellant Mr. Akshay Bhan, Senior Advocate with Mr. Alok Mittal, Advocate, for the respondent ORDER S. J. Vazifdar, Acting Chief Justice This is an appeal against the order of the Income Tax Appellate Tribunal dated 28.10.2014 allowi .....

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order of Hon ble ITAT is perverse in law in quashing the order under section 263 ignoring the decision of Hon ble Punjab and Haryana High Court in case of CIT v. M/s Abhishek Industries Limited, ITA No. 312 of 2011 dated 20.12.2012 and CIT v. Assam Tea House 344 ITR 507 (O&H) wherein in the similar circumstances, Hon ble Court has upheld the invoking of revisional power by the CIT. ii) Whether in the facts and circumstances of the case, the order of Hon ble ITAT is perverse in law in quashin .....

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rcumstances of the case, the order of Hon ble ITAT is perverse in law in quashing the order under section 263 ignoring that assessment order is erroneous in so far is prejudicial to the interest of the revenue as the assessee had failed to maintain the quantity wise details and as such it was not possible to compare the input with output and therefore books of account were liable to be rejected in the light of decision of Hon ble Punjab and Haryana in the case of Hargopal Singh proprietor, Gopal .....

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w even in the previous assessment years namely 2008-09 and 2009-10. In the assessment year 2010-11 the G.P. rate was only 10.85%. Further if the amount surrendered was excluded there would be a loss. It was further held that the Assessing officer had failed to ascertain whether the G.P. rate shown by the assessee was appropriate keeping in view the nature of the business. It was further observed that the Assessing Officer could have gathered the necessary data by recording the statements of the .....

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cer to make a fresh assessment. 4. The Tribunal on the other hand considered this issue in considerable detail. The respondent succeeded in demonstrating before the Tribunal that the Assessing Officer had made a detailed enquiry at the assessment stage with regard to the fall in the G.P. rate. The Assessing Officer sought complete details with regard to the manufacturing process, month-wise production, consumption, quantitative sale and justification of major expenses. It was not contended that .....

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the earlier assessment orders. In this view of the matter it was relevant that the assessee continued with the same business which in the earlier years had not been doubted. It is difficult to hold as perverse or unreasonable the Tribunal s acceptance of the respondent s explanation for the fall in the G.P. The reason furnished was that in the earlier year the purchase price of the items used in manufacturing the products was lower and in the year under consideration the purchase prices had inc .....

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eturn of income on 24.09.2010 declaring an income of ₹ 63,42,650/- which was processed under section 143(1) of the Act. The case was selected for scrutiny and a notice under section 143(2) of the Act was issued on 28.09.2011. The assessment was completed under section 143(3) by making an addition of ₹ 1,00,620/-. A survey was conducted under section 133(A) of the Act at the respondent s business premises during the course of which a sum of ₹ 80 lacs were surrendered as addition .....

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der the head "Profits and gains of business or profession" is a loss to the assessee, not being a loss sustained in a speculation business, and such loss cannot be or is not wholly set off against income under any head of income in accordance with the provisions of section 71, so much of the loss as has not been so set off or, where he has no income under any other head, the whole loss shall, subject to the other provisions of this Chapter, be carried forward to the following assessmen .....

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he C.I.T. under section 263 of the Act is of no assistance. The respondent had surrendered a sum of ₹ 80 lacs. The order merely records the assessee s contention that it had surrendered a sum of ₹ 50 lacs, ₹ 15 lacs and ₹ 15 lacs towards building renovation, office equipments and sundry receivable respectively. This, however, is not an admission on the respondents part regarding the source of the respondent s income. Infact the order records that an analysis of the facts .....

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