TMI Blog2019 (11) TMI 410X X X X Extracts X X X X X X X X Extracts X X X X ..... tion either as expenditure or to be capitalized on which depreciation will be allowed. The assessee might have earned income from the business which has not been accounted and used for constructing the business asset, though specific details have not been discussed either in the impugned order about the nature of evidence found during the course of survey. We also need not to ponder on this aspect because the assessee has admitted this unexplained expenditure on construction of building. This admission has to be accepted as given by the assessee, wherein it was alleged that it is for the purpose of the business. Therefore, to the extent the expenditure incurred for construction of the building, out of unexplained source is concerned, it is to be construed as earned from the business and it will take character of the business income. Once this income is to be assessed under the business income , then all incidental benefits for set off from brought forward loss or any other expenditure is to be given to the assessee. In the judgments relied upon the ld.counsel for the assessee, similar treatment has been given on the amounts which were admitted as trade receivable during the cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment order on 19.2.2015. He made addition of ₹ 40 lakhs after giving credit of brought forward loss. He determined income of the assessee as under: Returned income ₹ 21,34,700 Less: Income disclosed during survey to be assessed separately as per parano.4.0 ₹ 40,00,000 Add: Addition as per para no.5.0 ₹ 368 Balance loss allowed to be c/f (-)₹ 18,64,932/- Deemed income u/s.69,69A,69B 69C as discussed above ₹ 40,00,000/- Total taxable income ₹ 40,00,000/- 4. Appeal to the CIT(A) did not bring any relief to the assessee. 5. Short question for our adjud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f set off of losses w.e.f. 1.4.2017 was retrospective in nature being curative in character. Alternatively it was contended that the issue was covered by the decision of the Jurisdictional High Court in the case of Kim Pharma Ltd. (supra), as per which these incomes could not be assessed under any heads as provided under the Act and therefore were not eligible to set off any losses against the same. 11. We have heard the rival contentions, perused the orders of the authorities below and have also considered various case laws referred to by both the parties before us. 12. The issues to be addressed in the present case can be summarized as relating to the categorization/characterization of income surrendered by the assessee during survey proceedings, whether from disclosed or undisclosed sources, and the allowability of claim of set off of losses ,both current and brought forward, against the same. 13. The controversy arises on account of the scheme of the Act which mandates incomes to be categorized under specific heads depending on their nature/source, for computation purposes under chapter IV and thereafter provides for sett ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the [2018][Assessing Officer], satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee of such financial year.] SECTION 69B [2019][Amount of investments, etc., not fully disclosed in books of account. Where in any financial year the assessee has made investments or is found to be the owner of any bullion, jewellery, or other valuable article, and the [2020][Assessing Officer] finds that the amount expended on making such investments or in acquiring such bullion, jewellery or other valuable article exceeds the amount recorded in this behalf in the books of account maintained by the assessee for any source of income, and the assessee offers no explanation about such excess amount or the explanation offered by him is not, in the opinion of the [2021][Assessing Officer], satisfactory, the excess amount may be deeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 69, section 69A, section 69B, section 69C or section 69D, at the rate of thirty per cent; and (b) the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the amount of income referred to in clause (a). (2) Notwithstanding anything contained in this Act, no deduction in respect of any expenditure or allowance [3052a][ or set off of any loss ] shall be allowed to the assessee under any provision of this Act in computing his income referred to in clause (a) of subsection (1).] [3052] Omitted the words, figures and letters for the previous year relevant to the assessment year beginning on the 1st day of April, 2012 or beginning on the 1st day of April, 2013 or beginning on the 1st day of April, 2014 by Finance (No. 2) Act, 2014 (w.e.f. 1-4-2015). Ins. by Finance Act, 2016 (w.e.f. 1-04-2017). [3052a] Ins. by Finance Act, 2018 (w.e.f. 1-04-2017). 15. As is evident from a bare reading of the above sections any investments, moneys and expenditure which are not disclosed in the books of the assessee, if any, maint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is pertinent to bear in mind that expenditure laid out for the purpose of business is to be allowed deduction either as expenditure or to be capitalized on which depreciation will be allowed. The assessee might have earned income from the business which has not been accounted and used for constructing the business asset, though specific details have not been discussed either in the impugned order about the nature of evidence found during the course of survey. We also need not to ponder on this aspect because the assessee has admitted this unexplained expenditure on construction of building. This admission has to be accepted as given by the assessee, wherein it was alleged that it is for the purpose of the business. Therefore, to the extent the expenditure incurred for construction of the building, out of unexplained source is concerned, it is to be construed as earned from the business and it will take character of the business income. Once this income is to be assessed under the business income , then all incidental benefits for set off from brought forward loss or any other expenditure is to be given to the assessee. 8. In the judgments relied upon the ld.couns ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
