TMI Blog2015 (12) TMI 1801X X X X Extracts X X X X X X X X Extracts X X X X ..... tch of imagination, any of these incomes apart from cash can be considered as income under any head other that the business income . Nowhere in his order the AO has been able to bring on record the fact that the income surrendered during the course of survey was not out of the business of the assessee. Also nowhere he has objected to the heads under which the assessee had surrendered these amounts, i.e. cash, construction of building, discrepancy in stock and discrepancy in advances and receivable. Even the survey team has not found any source of income except the business income. Now, following the judgment of Jurisdictional High Court, in the background of the facts of the present case, we can safely infer that apart from cash all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Briefly, the facts of the case are that the assessee is in the business of manufacturing of Steel Round in coil, scrap and trading of HMS, iron and steel. Survey under section 133 of the Income Tax Act, 1961 (in short the Act ) was carried out at assessee s premises as on 5.10.2010. During the course of survey, an amount of ₹ 1.25 crores was surrendered by the assessee. The Assessing Officer noted that the assessee had shown this surrendered income as business income under the Profit Loss Account. Referring to the case of I.T.A.T., Chandigarh Bench in the case of Kim Pharma (P) Ltd. Vs. ITO, ITA No.189/Chd/2010 for assessment year 2006-07, the Assessing Officer considered the surrendered income as deemed income. The as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised by the assessee. 4. Aggrieved by this order, the assessee has come in appeal before us. 5. Ground Nos.1 to 4 relate to the issue of taxability of surrendered income. The learned counsel for the assessee on this issue relied on the order of the I.T.A.T., Chandigarh Bench in the case of Gaurish Steels Pvt. Ltd. in ITA No.1080/Chd/2014 dated 17.9.2015, whereby it has been held that apart from the cash, surrender made on account of sundry receivables is to be treated as business income. 6. The learned D.R. relied on the judgment of Punjab Haryana High Court in the case of Home Tex Vs. CIT, 243 CTR 81 (P H) and that of the I.T.A.T., Chandigarh Bench in the case of Mansarovar Forgings Pvt. Ltd. Vs. ACIT, ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered income is assessed not under any of the heads provided under section 14 of the Act, then the assessee would have to pay tax on surrendered income, as the business losses are not allowed to be set off against the surrendered income It is pertinent to mention here that it was stated at the Bar that the assessee was suffering losses even at the time of survey, a copy of trading account prepared at the time of survey is placed on record. Further, during the assessment proceedings, the Assessing Officer has not been able to bring on record any evidence or material to prove that the losses were inflated by the assessee. Even the books of accounts of the assessee are not rejected. In this background, now, we see that the reliance placed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness losses incurred by the assessee. The books have not been rejected. It was stated at the Bar that even at the time of survey, in the trading account prepared by the survey team, there were losses incurred by the assessee. All these facts have not been disputed by the Assessing Officer. Further, the surrender made by the assessee was on account of cash found during the course of survey, discrepancy in the cost of construction of building, discrepancy in stock and discrepancy in advances and receivables. By no stretch of imagination, any of these incomes apart from cash can be considered as income under any head other that the business income . 14. Nowhere in his order the Assessing Officer has been able to bring on recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/Chd/2014 for Asstt.Year 2011-12, it is submitted that the deemed income as assessed by the Assessing Officer U/s 69 and confirmed by the Commissioner of Income Tax (Appeals) is to be adjusted against the unabsorbed depreciation, which has been determined by the Assessing Officer in the order passed u/s 154, dated 18.02.2015. The cases relied on by the learned D.R. have all been dealt in the case of Gaurish Steels Pvt. Ltdc.(supra) 10. Respectfully following the order of the Coordinate Bench, we hereby direct the Assessing Officer to allow business losses suffered by the assessee out of surrendered income on account of sundry receivables only and not out of surrendered cash. 11. During the course of hearing, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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