2013 (6) TMI 163 - HC - Income Tax

Claim of set off against the surrendered income - nature of surrendered income - whether the surrendered amount of Rs.1,75,00,000/- should be treated as income of Assessee from business or from other sources. - held that - CIT(A) and ITAT both have recorded a concurrent finding of fact based on cogent material available before them, that surrendered amount was an income of the assessee from business and not from other sources. - Revenue is unable to point out any perversity in the said finding recorded by Appellate Authority as well as Appellate Tribunal. There is no dispute between the parties on the issue that in case, the surrendered amount is treated as an income from business, then assessee is entitled to get set off of the amount of Rs.54,10,054/- . - Decided in favor of assessee.

Summary

Issues:
1. Whether the Tribunal was justified in directing set off against surrendered income?
2. Whether the finding recorded by the Tribunal is factually sustainable?
3. Whether the surrendered amount should be treated as income from business or other sources?

Analysis:
1. The appeal involved the question of whether the Tribunal was correct in allowing set off of Rs. 54,10,054 against the surrendered income of Rs. 1,29,07,00. The assessee had surrendered the amount during a survey, claiming it was business income. The Assessing Officer disagreed, treating it as income from other sources. The Commissioner of Income Tax (Appeals) partly allowed the appeal, granting set off. The Income Tax Appellate Tribunal upheld this decision, leading to the Revenue's appeal. The Revenue argued that the surrendered amount was not business income, while the assessee contended that all conditions for surrender were met.

2. The second issue revolved around the factual sustainability of the Tribunal's finding. The Revenue claimed that the surrendered amount was not from business, contrary to the Tribunal's decision. The assessee argued that all conditions for surrender were considered by the Appellate Authority and Tribunal, leading to a finding in favor of business income. The Tribunal and Appellate Authority had thoroughly examined the facts and conditions of surrender before concluding that the amount was indeed business income.

3. The key issue was whether the surrendered amount should be categorized as income from business or other sources. The Appellate Authority and Tribunal found in favor of business income based on the conditions mentioned in the surrender letter. The Commissioner considered all conditions, unlike the Assessing Officer, leading to the conclusion that the amount was rightfully set off against the surrendered income. Both authorities agreed that the surrendered amount constituted business income, entitling the assessee to the set off.

In conclusion, the Court dismissed the appeal, upholding the decisions of the Appellate Authority and Tribunal. The surrendered amount was deemed income from business, justifying the set off granted to the assessee. The Court found no merit in the Revenue's arguments, as the factual findings supported the treatment of the amount as business income. The questions raised in the appeal were answered in favor of the assessee, leading to the dismissal of the appeal with no costs awarded.