TMI Blog2018 (3) TMI 1872X X X X Extracts X X X X X X X X Extracts X X X X ..... A of the Act resulted in the discovery of the said excess cash and there is no dispute about it. Further, it is also undisputed that the assessee failed to explain the manner of earning of the said excess cash linked to the unaccounted sales of the ITC products. Assessee failed to explain the modus-operandi of earning of such excess cash from business sources of any kind. We are of the opinion that it is reasonable to presume that assessee failed to discharge the onus on this aspect of establishing the business nature of the excess cash. This view is fortified by the legal proposition laid down in the case of Kim Pharma Pvt. Ltd. [ 2013 (1) TMI 495 - PUNJAB AND HARYANA HIGH COURT]. Where assessee failed to explain the nature and sour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This appeal is filed by the assessee against the order of CIT(A)-1, Nashik, dated 02-09-2015 for the Assessment Year 2010-11. 2. Grounds raised by the assessee read as under : 1. On the facts and in the prevailing circumstances of the case and the Ld. Assessing Officer and CIT(A) has erred in drawing, the conclusion and inference that income declared during survey action, is a deemed income u/s.69A and 69B of the I.T. Act, instead of business income as claimed by the appellant, as appellant do not any other source of income. The aforesaid finding and inference may please be vacated. 2. On the facts and in the prevailing circumstances of the case and the CIT(A) has erred in not following the binding principles laid do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act on 08-09-2009 and the same resulted in discovery of various discrepancies. Assessee disclosed the income against each of the discrepancy and the details of which are given as under : Sr.No. Nature in respect of which discrepancies noticed Amount disclosed (Rs.) 1 Vimal Pan Masala GP 6,700/- 2 Excess Cash 4,93,290/- 3 GP on unrecorded sales 34,652/- 4 Unrecorded purchase of Vimal Pan Masala 4,39,900/- 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the assessment, AO denied the claim of set off of losses against the disclosed deemed income of ₹ 14,74,542/-. However, he restricted the set off claim to the extent of income from other sources, i.e. ₹ 1,50,497/-. Net current year s loss carry forward to subsequent years is ₹ 2,65,457/- (current year loss of ₹ 4,15,951 (-) income from other sources of ₹ 1,50,497/-). In effect, AO denied the claim of set off of current year business loss of ₹ 2,65,457/-against the said deemed income of ₹ 14,74,542/- and also the entire brought forward loss of ₹ 4,82,585/- for the A.Y. 2009-10. Thus, AO proceeded to tax the disclosed amount of ₹ 14,74,542/-, the deemed income offered in the survey acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disclosed in the survey action amounting to ₹ 14,74,542/-. Bringing our attention to item No.1, 3 and 4, Ld. Counsel submitted that the items 1, 3 and 4 amounting to ₹ 4,81,252/- (i.e. ₹ 6,700/-, ₹ 34,652/- and ₹ 4,39,900/- respectively) constitutes business income and therefore, they should be available for set off of the said losses. 9. We heard both the parties on these 3 items. On going through the facts and considering the details available on record, we find the said items at Sl.Nos.1, 3, and 4 of the table being gross profits and the unrecorded purchases, we are of the opinion that the same should constitute business income and they should be available for set off of the losses in question. To t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such excess cash from business sources of any kind. Therefore, we are of the opinion that it is reasonable to presume that assessee failed to discharge the onus on this aspect of establishing the business nature of the excess cash. This view is fortified by the legal proposition laid down by the Hon ble Punjab Haryana High Court in the case of Kim Pharma Pvt. Ltd. Vs. CIT 35 taxmann.com 456 (Punjab Haryana). The said judgment is relevant for the following ratio : where amount surrendered during survey was not reflected in the books of account and no source from where it was derived was declared by the assessee, it was assessable as deemed income of the assessee u/s.69A and not as business income 12. Further, we find the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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