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TMI Blog2015 (7) TMI 691X X X X Extracts X X X X X X X X Extracts X X X X ..... mstances of the case and in law the Hon'ble ITAT is justified in not treating income of Rs. 1,00,98,672/- as 'deemed income' as provided under the scheme of Section 69 of the Act? 3. Whether in the facts and circumstances of the case and in law the Hon'ble ITAT is justified in deleting an addition of Rs. 1,00,98,672/- by treating the same as business income and thus allowing set off of business loss?" 2. Brief facts are that, the respondent-assessee is a company engaged in the business of dying and printing. During the course of scrutiny for the assessment year 2008-09, the Assessing Officer noticed that in a survey action conducted at the business premises of the assessee, it had declared a sum of Rs. 100.98 lacs (rounde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loss against income disclosed during survey as, relying upon the decision in Fakir Mohmed Haji Hassan, he held that income disclosed in survey did not fall under any head of income and therefore was not eligible for set off with current year business loss. The decision in the case of Fakir Mohmed Haji Hassan has been overturned by the Hon'ble Gujarat High Court itself in their decision in Radhey Developers Pvt. Ltd. which held that income that does not fall within the prescribed heads of income could not be taxed. Therefore, for the income declared in survey to be taxed, it has to fall under one of the heads of income. Once a head of income is assigned to the additional income disclosed, whether business or other source, it becomes avai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime of survey. As per the statement made at the time of survey, the assessee has stated that there was additional cloth of 10,18,340 meters which was valued at Rs. 1,00,98,672/-. The AO's only objection is that the said disclosure ought not to be reduced from the income from the business being not part of the business income and the resultant loss ought not to be adjusted against the said undisclosed income which is to be taxed independently in the hands of the assessee. In our considered opinion, the AO had gone wrong by not considering the provisions of Section 71 of the IT Act. In this regard, the law pronounced in the case of Chensing Ventures (supra) is to be followed, wherein it was held that once a loss is determined, the same sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee can set off the said loss under Section 71 of the Act against income of the same year under any other head, except for losses which arise under the head "capital gains". The income tax is only one tax and levied on the sum total of the income classified and chargeable under the various heads. Section 14 has classified the different heads of income and income under each head is separately computed. Income which is computed in accordance with law is one income and it is not a collection of distinct tax levied separately on each head of income and it is not an aggregate of various taxes computed with reference to each of the different sources separately. There is only one assessment and the same is made after the total income has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... njoint reading of provisions of sections 14 & 56 of the Act have been considered. The Apex Court in the case of D.P. Sandu Bros.Chembur P. Ltd.,(supra) has dealt with this very issue while deciding the treatment to be given to a transaction of surrender of tenancy right. The earlier decisions of the Apex Court commencing from case of United Commercial Bank Ltd. v. CIT [1957] 32 ITR 688 (SC) have been considered by the Apex Court and, hence, it is not necessary to repeat the same. Suffice it to state that the Act does not envisage taxing any income under any head not specified in section 14 of the Act. In the circumstances, there is no question of trying to read any conflict in the two judgments of this Court as submitted by the learned Coun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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