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2018 (10) TMI 2014 - ITAT RAIPURIncome surrendered in survey proceedings - Addition for undisclosed income out of entries in loose papers found on survey - during the course of survey proceedings both the partners were out of station and survey proceedings were represented by brother of one of the partner, in their absence and his statement was recorded by the Department to know sources of various discrepancies found on survey - HELD THAT:- From the records it can be seen that the assessee firm surrendered the income under the head “Loose papers found and impounded on survey” and included both in the trading and profit & loss account for the year ended on 31.03.2010 and computation of total income for the A.Y. 2010- 11 under the head “profits and gains of business”. The assessee also explained each of the loose papers before the AO but the AO as well as the CIT(A) ignored the explanation offered by the assessee. Therefore, we are of the opinion that both the CIT(A) as well as Assessing Officer are not correct in making this addition. The order of the CIT(A) is set aside. Disallowance out of remuneration paid to partners - computation of book profit for the purpose of admissibility of remuneration u/s 40(b)(v) - HELD THAT:- The assessee firm had no other source of income except income from trading of marbles, granite, tiles etc. during the year under consideration as is appearing from the audited financial statement and audit report for the concerned year. Besides that on survey proceedings no documents were found by the Revenue Authorities which revealed that the assessee firm was involved in other business activities as well. Therefore, we are of the opinion that the CIT(A) as well as Assessing Officer both are not correct in restricting the remuneration of the partners. Appeal of the assessee is allowed.
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