Case Law Details
Shri Lovish Singhal Vs ITO (ITAT Jodhpur)
Facts:- Survey u/s 133A was carried out at the assessee’s premises on 09.01.2014. During the survey, assessee offered INR 10,90,000 for taxation on account of discrepancy in stock, incriminating documents and excess cash.
Assessee filed the income tax return for AY 2014-15 declaring INR 10,15,000 as total income. During the assessment proceeding, AO observed that income of INR 10,90,000 was included as business income, however, tax was calculated at normal rate instead of 30% as per provisions of section 115BBE and AO issued notice for the same.
Assessee submitted that since they disclosed the surrendered income in income tax return, it was not covered under any deeming provisions and hence section 115BBE cannot be applied. Relying on the judgment of Hon’ble Rajasthan HC in the matter of Bajargan Traders, assessee submitted that excess stock, incriminating documents and excess cash are related to business activities and the same has to be accepted as business income.
Held: In respect of excess stock found during the course of survey and surrender made thereof, Hon’ble Rajasthan HC in Bajrang Trading, held the same to be taxable under the head ‘Business and profession’. In respect of excess cash found out of sale on goods in which the assessee was dealing was also found taxable under the head ‘Business and Profession’. Relying on the same it was held that excess stock and excess cash cannot be taxed u/s 115BBE.
With respect to surrender of income on account of incriminating documents, since there was no clarity whether it was out of business transaction, the matter was restored to AO to find out nature of such income.
FULL TEXT OF THE ITAT JUDGMENT
These are the appeals filed by the different assessees against the separate orders of the ld. CIT(A), Bikaner dated 14/11/2017 and 15/11/2017 respectively for the A.Y. 2014-15 in the matter of order u/s 143(3) of the Income-tax Act, 1961 [hereinafter referred to as ‘the Act’, for short].
2. In all these appeals, a common issue has been taken, therefore, all the appeals are being heard together and the Bench decided to dispose off all these appeals by a consolidated order.
3. The issue involved in all the appeals pertains to upholding the provisions of Section 69 of the Act while calculating the tax rate as per provisions of Section 115 BBE of the Act.
4. At the outset, the ld AR of the assessee has contended that the issue is covered by the decision of Hon’ble Rajasthan High court.
5. I have considered the rival contentions and gone through the orders of the authorities below. From the record, I found that a survey u/s. 133A was carried out at assessee’s business premises on 09-01-2014. During the course of survey proceedings, the assessee offered an amount of Rs. 10,90,000/- for taxation on account of discrepancy in stock, incriminating documents and excess cash found. Subsequently, the assessee filed his return of income for AY 2014-15, declaring the total income at Rs. 10,15,000/-. During the course of assessment proceedings, the AO noted that though the assessee in his return filed for AY 2014-15 included the surrendered amount of Rs. 10,90,000/- as income from business, however, while calculating the tax on this income, it had calculated / paid tax at normal rate instead of 30% as per the provisions of sec. 115BBE of the Act. Accordingly, the AO issued a show-cause notice on 23-11-2016 requiring the assessee as to why tax may not be calculated @30% as per provisions of sec. 115BBE of the Act. The assessee filed his reply dated 29-11-2016, the AO reproduced this reply at page no. 3 of the assessment order. The assessee’s main contention before the AO was that since he had disclosed the surrendered income in its return of income, it was not covered by any deeming provisions viz. 68, 69, 69A, 69B, 69C or 69D, the provisions of sec. 115BBE could not be applied in. respect of this surrendered income. The AO however, did not accept this reply of the assessee and levied taxes @ 30% in respect of income so surrendered.
6. By the impugned order, the ld. CIT(A) has confirmed the action of the Assessing Officer for charging tax @ 30% in respect of income so surrendered, against which the assessee is in further appeal before the ITAT.
7. It was argued by the ld AR that the assessee is individual and was earning income out of trading as well as interest income from M/s M.R. Seeds Pvt. Ltd. That during the year under consideration, a survey was conducted on 09.01.2014 at the business premises of the assessee. During survey, the assessee has offered an amount of Rs. 10,90,000/- for taxation on account of incriminating documents, excess cash found and stock discrepancies. During the assessment proceeding the assessee has explained before the ld AO that the surrender amount was in relation to business activities and there are direct nexus with business and accordingly he has treated same as business income. The ld AO has not brought on record any evidence or material to establish that the assessee was involved in any other activities and as such the income disclosed as business income by the assessee is accordance with law and also supported from judicial decisions.
8. Reliance was placed on the decisions of Hon’ble Rajasthan High Court in the case of CIT of CIT v/s Bajargan Traders D.B. I.T. No. 258/2017 dated 12/09/2017 the Hon’ble Rajasthan High Court held as under:-
“2.10. We have heard the rival contentions and perused the material available on record. During the course of survey, the assessee has surrendered an amount of Rs. 70,04,814/- towards investment in stock of rice which had not been recorded in the books of accounts. Subsequently, in the books of accounts, the assessee has incorporated this transaction by debiting the purchase account and crediting the income from undisclosed sources. In the annual accounts, the purchases of Rs. 70,04,814/- were finally reflected as part of total purchases amounting to Rs. 33,47,19,658/- in the profit and loss account and the same also found included as part of the closing stock amount to Rs. 1,94,42,569/- in the profit/ loss account since the said stock of rice was not sold out. In addition to the purchase and the closing stock, the amount of Rs. 70,04,814/- also found credited in the profit and loss account as income from undisclosed sources. The net effect of this double entry accounting treatment is that firstly the unrecorded stock of rice has been brought on the books and now forms part of the recorded stock which can be subsequently sold out and the profit/ loss therefrom would be subject to tax as any other normal business transaction. Secondly, the unrecorded investment which has gone in purchase of such unrecorded stock of rice has been recorded in the books of accounts and offered to tax by crediting the said amount in the profit and loss account. Had this investment been made out of known source, there was no necessity for assessee to credit the profit/ loss account and offer the same to tax. Accordingly, we do not see any infirmity in assessee’s bringing such transaction in its books of accounts and the accounting treatment thereof so as to regularise its books of accounts. In fact, the same provides a credible base for Revenue to bring to tax subsequent profit/ loss on sale of such stock of rice in future.
2.11. Having said that, the next issue that arises for consideration is whether the amount surrendered by way of investment in the unrecorded stock of rice has to be brought to tax under the head “business income” or “income from other sources”. In the present case, the assessee is dealing in sale of foodgrains, rice and oil seeds, and the excess stock which has been found during the course of survey is stock of rice. Therefore, the investment in procurement of such stock of rice is clearly identifiable and related to the regular business stock of the assessee. The decision of the Co-ordinate Bench in case of Shri Ramnarayan Birla (supra) supports the case of the assessee in this regard. Therefore, the investment in the excess stock has to be brought to tax under the head “business income” and not under the head income from other sources”. In the result, ground No. 1 of the assessee is allowed.”
9. It was further argued that from the above jurisdictional High Court decisions the excess stock and incriminating documents and cash found as a result of search are related to business activities and as such same may kindly be accepted as business income. Further it is relevant to mention here that the ld CIT (A) has categorically recorded the finding that “even when source is explained and same is accrued through business undertaken by the assessee, it will be treated as income u/s 68 to 69C and provisions of section 115BBE will apply accordingly.” The observation made by the ld CIT (A) is totally and apparently contrary to the provisions of the law and also against the decision of Hon’ble Jurisdictional High Court referred above.
10. As per the ld AR the surrender income disclosed by the assessee are part of the business activities and no other activities carried out by the assessee and also no material or evidence brought on record by the Department and as such the income declared in the nature of business income and the provisions of section 69 applied by the ld AO and confirmed by ld CIT (A) is totally unjustifiable and also contrary to the decision of Hon’ble Jurisdictional High Court.
11. The ld AR has further contended that the Hon’ble ITAT, Jodhpur Bench, Jaipur Bench and Hon’ble ITAT, Mumbai Bench has allowed the appeal on identical facts: –
i. ACIT v/s Sanjay Bairathi Gems Ltd., ITAT Jaipur Bench. The relevant finding recorded by the Hon’ble ITAT at para 4.1 to para 4.3 page 8 to 11 of the order reads as under: –
“4.1 In this background of the scheme of the Act, the question which arises for the determination is that under which head of income the excess stock/investment found in search and offered by the assessee for tax is to be assessed. According to the assessee such excess stock/investment is a business stock/investment which has arisen out of the unrecorded business activity of the assessee and therefore the same needs to be assessed under the head profit & gain of business. For this purpose reliance is placed on the decision of ITAT Ahmedabad Bench in case of Chokshi Hiralal Maganlal vs. DCIT 141 TTJ (Ahd) 1 dt. 21/01/2011 wherein the Tribunal held that excess stock found during the survey is not separately and clearly identifiable but is part of mixed lots of stock found at the premises which included declared stock as per books and also the excess stock as computed by the survey officers, the provisions of section 69B cannot be made applicable as primary condition for invoking the provisions of section 69A, 69B is that the asset should be separately identifiable and it should have independent physical existence of its own. Since excess stock is a result of suppression of profit from business over the years and has not been kept identifiable separately but is the part of overall physical stock found, the investment in the excess stock has to be treated as business income as per detailed reasons given in the case of Fashion World vs. ACIT ITA No. 1634/Ahd/2006 wherein, the Tribunal held that, if excess stock found during the course of survey or search and does not have any independent identity as an asset but as mixed part of overall stock found in the survey/search then such excess stock would represent business income only.
4.2 Recently the Hon’ble ITAT Jaipur Bench in case of DCIT vs. Ramnarayan Birla 482/JP/2015 dated 30.09.2016 in the similar facts held that the excess stock is to be assessed as part of the normal stock and to be taxed under the head income from business. The relevant finding of the ITAT is as under:-
“We have heard rival contentions and perused the material available on record. Undisputed facts emerged from the record that at the time of survey excess stock was found. It is also not disputed that the assessee is engaged in the business of jewellery. During the course of survey excess stock valuing Rs. 77,66,887/- was found in respect of gold and silver jewellery. The Coordinate Bench in the case of Chokshi Hiralal Maganlal vs. DCIT, 131 TTJ (Ahd.) 1 has held that in a cases where source of investment/expenditure is clearly identifiable and alleged undisclosed asset has no independent existence of its own or there is no separate physical identity of such investment/expenditure then first what is to be taxed is the undisclosed business receipt invested in unidentifiable unaccounted asset and only on failure it should be considered to be taxed under section 69 on the premises that such excess investment is not recorded in the books of account and its nature and source is not identifiable. Once such excess investment is taxed as undeclared business receipt then taxing it further as deemed income under section 69 would not be necessary. Therefore, the first attempt of the assessing authority should be to find out link of undeclared investment/expenditure with the known head, give opportunity to the assessee to establish nexus and if it is satisfactorily established then first such investment should be considered as undeclared receipt under that particular head. It is observed that there is no conflict with the decision of Hon’ble Gujarat High Court in the case of Fakir Mohd. Haji Hasan (supra) where investment in an asset or expenditure is not identifiable and no nexus was established then with any head of income and thus was not available for set off against any loss under any other head. Therefore, the Hon’ble Coordinate Bench held that where asset in which undeclared investment is sought to be taxed is not clearly identifiable or does not have independent identity but is integral and inseparable (mixed) part of declared asset, falling under a particular head, then the difference should be treated as undeclared business income explaining the investment. In the present case the excess stock was part of the stock. The revenue has not pointed out that the excess stock has any nexus with any other receipts. Therefore, we do not find any fault with the decision of the ld. CIT (A) directing the AO to treat the surrendered amount as excess stock qua the excess stock found.”
4.3 The AO relied upon the decision of Hon’ble Punjab and Haryana High Court in case of Kim Pharma (p.) Limited vs. CIT 258 CTR 454. In this case the amount surrendered in course of survey was not reflected in books of accounts and no source from where it was derived was declared by the assessee and therefore it was held that the same can’t be assessed as business income. In this case the decision of Hon’ble Karnataka High Court in case of CIT vs. S.K. Srigiri and Bros 298 ITR 13 relied by the Assessee was distinguished by holding that in this case assessee received additional income from business only.”
ii. Reliance was also placed on the decision of Hon’ble ITAT, Jodhpur Bench in the case of ACIT, Central Circle -1 v/s Miraj Tradecom Pvt. Ltd., I.T.A. No. 124/JODH/2017 dated 03/07/2017 wherein the Hon’ble Bench held as under: –
“(v) It was also settled position of law that income referred in section 115BBE i.e. 68, 69 A/B/C etc. does not state head of income and assessing authority has to look to the surrounding circumstances in order to determine as to under what head the said income should be assessed. In this regard, we rely on the decision of Mumbai Bench of ITAT in the case of ITO v. Dharambir Hansraj Agarwal [23 ITD 589] observed that section 68 does not expressly state as to under what head the said income should be assessed. Section 68 is silent about the head under which the said income should be assessed. The Assessing Officer has to look to the surrounding circumstances in order to determine the head of income under which the said income should be assessed. Relevant para is reproduced as under: –
“3. Even if we hold that the explanation of the assessee about the nature and source of those amounts was not satisfactory, as has been held by the income tax officer, the only consequence thereof would be that sums credited in the books of the assessee would be liable to be charged to income-tax, as the income of the assessee of the previous year in which the books were maintained. Section 68 does not expressly state as to under what head the said income should be assessed. Section 68 is silent about the head under which the said income should be assessed. Consequently, the assessing authority has to look to the surrounding circumstances in order to determine as to under what head the said income should be assessed.”
(vi) We also rely on the following citation as submitted and as referred in CIT (A) Order Page 34 in this regard:
CIT vs. Sheth Developer (P) Ltd in appeal No. 3724 of 2010 dated 27.07.2012: The Bombay High Court held that in case of where undisclosed income found in form of cash was explained as having been acquired while carrying on the business as builder and on such income deduction u/s 80IB was claimed by holding that in the case before it the undisclosed income was received in the course of carrying out the business activity as a builder which is assessed as income from business.
(vii) We further rely on following citations-
a. Lakhmichand Baijnath v. CIT [1959] 35 ITR 416, the Supreme Court has observed that when an amount is credited in the business books, it is not an unreasonable inference to draw that it is a receipt from business. It was also observed that as the credits were found in the business accounts of the assessee and the explanation as to how the amounts came to be received was rejected by the Income-tax authorities, the Income-tax authorities were entitled to treat the credits as business receipts chargeable to tax.
b. Nalinikant Ambalal Mody v S.A.L. Narayan Row, CIT [1966] 61 ITR 428, the Supreme Court has held that whether an income falls under one head or another has to be decided according to the common notions of practical man because the Act does not provide any guidance in the matter.
c. Daulatram Rawatmull v. CIT [1967] 64 ITR 593, it has been held by the Calcutta High Court that where a credit entry is found in the business accounts of an assessee and the explanation as to how the amount came to be received is rejected by the Income-tax authorities and the amount is taken to be income from an undisclosed source, such income can be treated as business income, if the assessee has no other source of income. Same view has been taken by Calcutta High Court in case of Mansfield and Sons v. CIT [1963] 48 ITR 254.
In view of above, receipts is fully explained on date of search as per statement recorded towards premium from distributers/ stockiest and also accounted for in the books of accounts/ ITR/ audited Balance Sheet of the relevant assessment year, therefore, it was supposed to be assesesd as income from business as the part of amount assessed/ accepted during the year under consideration as business receipts in absence of any contrary/ corroborative documents with the department.
(viii) Considering the fact that the sum of Rs. 6.50 Crores was received by the respondent Company as premium from distributers/ stockiest looking to Goodwill as Miraj is an established brand name and out of total premium amount offered to tax Rs. 6.75 Crores, a sum of Rs. 25 Lacs is accepted as business receipt by ld ACIT, we hereby request before your honour to direct the department to consider the entire receipts as Business income as respondents had no source of receipts other than Business as pe rfirst argument before ld CIT (A) as narrated at CIT (A) order page 41 para 7.1(ii).
(ix) Same is squarely covered by judgment dated 23.05.2017 in appeal No. ITA/338/ Jodh / 2016 in case of ACIT v/s M/S I View Motion P. Ltd.
In view of above, it is reiterated before your kind honour that adjustment/ set off towards brought forward business losses of earlier years to the extent of Rs. 2,67,62,208/- is permissible once it is considered as first argument to consider the receipts of Rs. 6.50 Crores as business receipts in absence of any other corroborative/ seized documents before the department as the provisions of clause (i) of sub section (1) of section 72 which clearly provide for set off brought forward business losses in the subsequent year against the profits nad gains of business or profession. Therefore, we hereby request to direct the department to (i) consider receipts as business receipts as part of amount is already accepted as business receipts during the year (ii) there is no other source to get such receipts by the company and (iii) as per above judicial pronouncements instead of considering it as “income from other sources” and allow the set off of brought forward business losses in absence of any other corroborative documents before the department and dismiss the departmental appeal on this ground. Thus ground of revenue is dismissed.
Ground No. 2
Whether on the facts and in the circumstances of the case the CIT (A) was right in directing to allow adjustment/ set off towards brought forward business loses of earlier year to the extent of Rs. 2,67,62,208/- despite holding that said sum are chargeable to tax under the head “income from other sources” and in contravention of provisions of clause (i) of sub-section (1) of section 72 providing for set off brought forward business losses in the subsequent years against the profits and gains of business or profession only.
As submitted in Ground No.1 Para 5 hereinabove and is submitted before AO/ CIT (A) are being reiterated for the above ground also. Same is also squarely covered by judgment dated 23.05.2017 in appeal No. ITA/338/JODH/2016 in case of ACIT v/s M/s I View Motion P. Ltd.
In view of above, it was submitted before your kind honour that adjustment/ setoff towards brought forward business losses of earlier years to the extent of Rs. 2,67,62,208/- is permissible once it is considered as first argument to consider the receipts of Rs. 6.50 Crores as business receipts as remaining premium amount of Rs. 25 Lacs considered during the year under consideration of the respondent company in absence of any other corroborative/ seized documents before the department as the provisions of clause (i) of sub section (1) of section 72 which clearly provide for set off brought forward business losses in the subsequent year against the profits and gains of business or profession. Therefore, we hereby request to direct the department to (i) consider receipts as business receipts as part of amount is accepted during the year (ii) there is no other source to get such receipts by the company (iii) as per above judicial pronouncements & and allow the set off of brought forward business losses and dismiss the departmental appeal. Thus appeal of the revenue is dismissed.
Ground No. 3
Whether on the facts and in the circumstances of the case the CIT (A) was right in observing that the amendment made by Finance Bill 2016 to the provisions of section 115BBE of the Income Tax Act clarifying that no set off of any loss against the deemed income under section 68, 69, 69A to 69D shall be allowable, is not applicable to the assessment years 2014-15.
1. As earlier explained, and discussed in detail that amended provisions shall be applicable from 1st April 2017, accordingly applicable from Assessment Year 2017-18 onwards. Relevant finding of CIT (A) in order at page 40 para 6.5 and page 47 para 7.4.2.
“In submission referred in para 6.4 and 6.5 the appellant referred the amendment by Finance Bill 2016 to amend section 155BBE of the Income Tax Act to clarify that the restriction imposed by the amendment by Finance Bill 2016 for adjustment against deemed income taxed under the head income from other source is w.e.f. 01.04.2017 and for the AY 2015-16, the same is not applicable.”
2. It was also submitted that even the denial of such set off by section 115BBE was brought on the statue by Finance Act, 2016 w.e.f. 01.04.2017 i.e. for and from the A.Y. 2017-18. Therefore, when the specific denial of the set off was brought prospectively by the legislature in section 115BBE, the set off of loss under the head ‘business’ against the ‘income from other sources’ cannot be denied to the assessee.
3. Amendment to the effect that the sub-section (2) of section 115BBE so as to provide that the set off of any loss shall also be not allowable in respect of income under the aforesaid sections. This amendment will take effect from 1st April, 2017 and will, accordingly, apply in relation to the assessment year 2017-2018 and subsequent years. Aforesaid amendment can not be applied retrospective otherwise there is no rationale to effect aforesaid amendment. It is also settled position of law that restrictive amendments are applicable prospectively.”
iii. The Hon’ble ITAT, Mumbai Bench in the case of ACIT v/s Rahil Agencies in I.T.A. No. 4413/Mum/2014 dated 23/11/2016. The Hon’ble Bench held as under: –
“19. We have considered rival contentions and found that by applying provisions of Section 115BBE the AO has declined set off of business loss against income declared during the course of survey/search. The provisions of Section 115BE are applicable on the income taxable under section 68, 69, 69A, 69B, 69C or 69D of the Act. The income declared by the assessee is unrecorded stock of diamond found during the course of search. The assessee is in the business of diamond trade and such stock was part of the business affair of the company. Therefore since income declared is in the nature of business income, the same is not taxable under any of the section referred above and accordingly section 115BBE has no application in case.
20. Furthermore, the memorandum to the Finance Bill, 2012 read on Section 115BBE reads as under :-
“Under the existing provisions of the Income-tax Act, certain unexplained amounts are deemed as income under section 68, section 69, section 69A, section 69B, section 69C and section 69D of the Act and are subject to tax as per the tax rate applicable to the assessee. In case of individuals, HUF, etc., no tax is levied up to the basic exemption limit. Therefore, in these cases, no tax can be levied on these deemed income if the amount of such deemed income is less than the amount of basic exemption limit and even if it is higher, it is levied at the lower slab rate. In order to curb the practice of laundering of unaccounted money by taking advantage of basic exemption limit, it is proposed to tax the unexplained credits, money, investment, expenditure, etc., which has been deemed as income under section 68, section 69, section 69A, section 69B, section 69C or section 69D, at the rate of 30% (plus surcharge and cess as applicable). It is also proposed to provide that no deduction in respect of any expenditure or allowance shall be allowed to the assessee under any provision of the Act in computing deemed income under the said sections.This amendment will take effect from 1st April, 2013 and will, accordingly, apply in relation to the assessment year 2013-14 and subsequent assessment years. [Clause 45).”
21. Thus, in the Act itself it is clearly mentioned that this section is applicable from 1st day of April, 2013. When the legislature itself provided that the particular provisions are applicable prospectively then submission of Ld D.R. that the section is applicable retrospectively without any basis is not tenable. Further, it is not a matter of insertion of explanation or clarification to some existing provisions of law. It is a new section inserted barring claim of expenses/ allowance against particular income. Therefore any bar or restrictions of a claim cannot be applied retrospectively. It is wellsettled rule of interpretation allowed by time and sanctified by judicial decisions that retrospective operation should not be given toa statute so as to effect, alter or destroy an existing right or create a new liability or obligation. If the enactment is expressed in language which is fairly capable of either interpretation, it ought to be construed as prospective only as per ratio of Hon’ble Supreme Court in the case of Govinddas Vs. ITO, (1976) 103ITR 123 (SC). A statue which deals with matter of substantive law and taxation is matter of substantive law-would not be construed to have retrospective operation unless such a construction appears very clearly in the terms of the Act or arises by necessary implication.
22. As per our considered view, Section 115BBE bar from claiming any expenses or allowance from the income taxable under section 68, 69, 69A, 69B, 69C, or 69D of the Act. In the instant case before us the claim was of set off of business loss against income declared during search. There is vital difference between the loss and expenses/ allowance. Hon’b1e Supreme Court in case of CIT Vs. Wallford share & Stock brokers Pvt. Ltd ( 326 ITR 1) while discussing the issue that losses incurred in mutual fund from which dividend received, cannot be considered for the purpose of section 14A of the Act and held that:
“We may reiterate that one must keep in mind the conceptual difference between loss expenditure, cost of acquisition, etc. while interpreting the scheme of the Act.”
In view of the decision of Hon’ble Supreme Court, business loss cannot be treated at par with the expenses / allowances and such business loss can be set off against any type of income as section 71 do not debar from setting off such losses.”
Consistent with the view taken by the co-ordinate bench in the above cited case, we also hold that the order passed by Ld CIT(A) on all the issues does not call for any interference.”
12. On the other hand, the ld Departmental Representative has relied on the orders of the authorities below and further contended that the Assessing Officer was perfectly justified in adding the amount u/s 68/69 of the Act. Accordingly, the levy of tax U/s 115BBE of the Act was @ 30% on such income.
13. I have heard the rival contentions and record perused. I have also carefully gone through the orders of the authorities below. I have also deliberated on the judicial pronouncements referred by the lower authorities in their respective orders as well as cited by the ld AR during the course of hearing before the ITAT in the context of factual matrix of the case. From the record, I find that during the course of survey, income was surrendred by the assessee on account of stock, excess cash found out of sale of stock and also in respect of incriminating documents. As per judicial pronouncements cited by the ld. AR and also the decision of Hon’ble Rajasthan high court in the case of Bajrang Traders in Income Tax Appeal No. 258/2017 dated 12/09/2017 I observe that the Hon’ble High Court in respect of excess stock found during the course of survey and surrender made thereof was found to be taxable under the head ‘business and profession’. Similarly in respect of excess cash found out of sale of goods in which the assessee was dealing was also found to be taxable as business income. Applying the proposition of law laid down in the judicial pronouncements as discussed above, I hold that the lower authorities were not justified in taxing the surrender made on account of excess stock and excess cash found U/s 69 of the Act. Thus, there is no justification for taxing such income U/s 115BBE of the Act.
14. So far as the surrender of income is on account of incriminating documents, it is not clear as to whether it was out of the business transaction, the assessee was carrying on in the regular course of business. However, authorities had not given any finding on the nature of such incriminating documents nor with regard to income surrender with respect to these documents. Therefore, in the interest of justice, I restore the issue with regard to surrender of income arising out of incriminating documents to the file of the Assessing Officer to find out the nature of such income if arising out of the business transaction carried on by the assessee and to decide the issue afresh as per law. Needless to say that the assessee should be given due opportunity before deciding the issue.
15. In the result, all the appeals are allowed in part in terms indicated hereinabove.
