Case Law Details
Jadhav Kangralkar Builders Vs ACIT (ITAT Pune)
We find that there is no dispute regarding the business of assessee and earning Rs.200/- extra over and above regular income for selling 37,752 sq. ft. in Aayodhya Nagari project. From the day one i.e. from date of survey as discussed above, the assessee was contended the amount disclosed during the course of survey as additional income is part and parcel of its regular trading receipts and cannot be deemed as unaccounted money u/s. 69 of the Act. We note that the assessee incurred expenditure of Rs.80,00,000/- on account of partners salary which is reflected in profit and loss account as on 31-03-2013 at page 30 of Paper Book. Therefore, the nature and source of said amount disclosed during the course of survey is established as business income as the assessee does not have any other business activity except business income from construction of housing project. Therefore, we hold the entire disclosed amount Rs.75,50,400/- are attributable to the business activity and consequently is eligible for all allowances u/s. 40(b) of the Act. We find a similar issue arose in the case of Rashtriya Leather Works in ITA No. 253/PN/2003 for A.Y. 1999-2000 before this Tribunal and vide order dated 23-06-2006 this Tribunal held unexplained excess stock found during the course of the survey is to be treated to be a part of book profits and were chargeable to tax under the head „profits and gains of business or profession‟.
FULL TEXT OF THE ORDER OF ITAT PUNE
This appeal by the assessee against the order dated 09-05-2017 passed by the Commissioner of Income Tax (Appeals)-4, Pune [CIT(A)] for assessment year 2013-14.
2. The only issue is to be decided as to whether the CIT(A) justified in confirming the order of AO in treating the additional income declared in survey as income from other sources as against the business income claimed by the assessee in the facts and circumstances of the case.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
