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TMI Blog2023 (12) TMI 1325X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld. Asstt. Commissioner of Income Tax, Central Circle, Amritsar (in brevity the AO) order passed u/s 143(3) of the Act. 2. The assessee has taken the following grounds: "1) The learned Assessing officer has erred both in law and as per facts in making an addition of Rs. 7,12,805/- under section 69A of the Income Tax Act 1961 on account of availability of excess cash is not directly relatable to the business. The assessee during the course of proceedings have fully substantiated that the excess cash represents the sale of medicine in normal course of business not recorded in the books of accounts. The Worthy Commissioner of the Income Tax (Appeals) has further erred both on facts and in laws in upholding the action of the learned Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. Aggrieved assessee filed an appeal before the ld. CIT(A). But the ld. CIT(A) upheld the order of the ld. AO related to imposing of section 115BBE on the excess cash. Being aggrieved assessee filed an appeal before us. 4. The ld. AR for assessee filed written submissions, which arekept in the record. The ld. AR vehemently argued and invited our attention in the statement recorded by the assessee in APB page 47 and 51 which are reproduced as below: "Q No. 12- Whether you have purchased any immovable property during the last 6 years in your name or in the name of your family member? Ans.- No, I have not purchased any immovable property in my name or in the name of my family members during the last 6 years". Q No. 23- Cash a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of the assessee or accumulated from non-recognising source. Hence, when all the incomes earned by the assessee are only from the business income of the assessee, there do not arise any question as to application of provisions of section 69A of the Act and hence taxing such income at special rate as per section 115BBE is improper. It is a settled principle in law that when there is no other/separate source of income identified during the course of survey or during the course of assessment proceedings, any income arising to the assessee shall be treated to be out of the normal business of the assessee only. During survey proceeding the assessee filed surrendered letter dated 27-2-2019 and in statement assessee also recorded and income wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was derived was not declared/explained whereas in the present case the amount surrendered during survey was duly reflected in the books of account and the source it was declared/explained as business activity with due payment of Tax liability and the authorities below failed to prove the contrary to disprove source of income other than Business income." 4.4 The ld. AR respectfully relied on the CIT vs. Smt. Sudarshan Gupta (2008) 10 DTR (P & H) 184 "So in the light of the judgment passed by the Hon'able jurisdictional High Court as stated above if department has agreed to the surrender they should also assess the surrender amount as business Income and taxed the Income at Normal rate of Tax as per surrender letter & provision of Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 107 ITR 938 (SC) (6) Hon'bie ITAT Cochin Bench, Cochin in the case of M/s. Bhima Jewellers vs. PCIT Kozhikode in ITA No. 208/Coch/2018, Assessment Year 2013-14 also bring out a clear legal position that for any income to be treated as business income, the nexus/the source, has to be established. Hence, the action of the AO in applying the rate as prescribed u/s 115BBE on the surrendered income included in the ITR, treated by the AO as income u/s 69A in the assessment order, is found sustainable. Keeping in view the above facts and discussion, it is held that the AO has rightly treated the surrender of Rs. 7,12,805/- on account of excess cash found during the survey as deemed income u/s 69A and to be taxed as per provisions of Section 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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