TMI Blog2020 (10) TMI 1199X X X X Extracts X X X X X X X X Extracts X X X X ..... situation, in which both the source and destination are business inasmuch as the source of the income is business and the destination of such income is again in the nature of business assets, that is, stock, cash and receivables. As a fortiori, such an income will be considered as `Business income covered under Chapter IV-D of the Act forming part of book-profit for the purposes of allowing remuneration to partners. As the assessee offered ₹ 50,25,997/- in the return of income by treating the same as part of business profit, in our view, the AO was obliged to consider it the same way at the time of computation of book profit by allowing claim of remuneration etc. We, therefore, overturn the impugned order and restore the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee claimed deduction towards remuneration to partners on the business income consisting of such declaration of ₹ 50.25 lakh. The Assessing Officer (AO) held that the excess cash and stock amounting to ₹ 21,27,997/- were taxable as Unexplained money etc. u/s. 69A and undisclosed advances receivable of ₹ 28,98,000/- were in the nature of Unexplained investment u/s.69 of the Act. He, therefore, did not allow deduction on account of salary to the partners on such amounts by holding it to be outside the purview of book profit . The ld. CIT(A) partly agreed with the assessee s contention. He treated excess stock of ₹ 13,12,907/- as Business income . However, the remaining amounts of excess cash and undisclosed adva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income offered by the assessee is covered u/ss 69/69A of the Act as held by the AO or can be classified as `Business income as claimed by the assessee. 6. Section 69 provides that: `Where in the financial year immediately preceding the assessment year the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year. . Section 69A is also almost similarly worded to this extent by providing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any separate head under which such incomes are to be covered. On a conjoint reading of section 14 por una parte and sections 69/69A por otra parte , it turns out that such incomes have to be classified under one of the five heads. This proposition of law has been judicially recognised in certain decisions including CIT VS. Shilpa Dyeing Printing Mills (P.) Ltd. (2013) 219 Taxman 279 (Gujarat). 8. It is observed that the survey was conducted at the business premises of the assessee. Excess cash, stock and unrecorded advances were found from the business premises only. The AO has not referred to any other source of income of the assessee-firm apart from the business carried on by it. In such circumstances, the only circumstantial i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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