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TMI Blog2020 (10) TMI 1199X X X X Extracts X X X X X X X X Extracts X X X X ..... f income declared in the survey carried out u/s 133A of the Act and also offered for taxation. 3. Succinctly, the factual matrix of the case is that the assessee was subjected to survey u/s.133A of the Act on 03-10-2011. Certain discrepancies were found in cash and stock during the course of survey. The assessee made total declaration of income of Rs. 50,25,997/- consisting of additional income on account of excess cash at Rs. 8,15,090/-; excess stock at Rs. 13,12,907/-; and undisclosed advances receivable at Rs. 28,98,000/-. Such amount of Rs. 50.25 lakh was credited by the assessee to its Profit and loss account at the time of finalization of accounts. Return was filed declaring such additional income of Rs. 50.25 lakh. The assessee cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for taxation. The assessee worked out the amount of partners' remuneration by including such surrendered amount. The AO came to hold that such surrendered amount was separately taxable under sections 69/69A and hence does not fall under Chapter IV-D dealing with the income under the head `Profits and gains of business or profession'. 5. Section 40(b) of the Act provides for allowing remuneration and interest to partners on the amount of `book-profit'. This expression has been defined in Explanation 3 to mean `the net profit, as shown in the profit and loss account for the relevant previous year, computed in the manner laid down in Chapter IVD...'. The crux of the controversy is to ascertain whether the income offered by the assessee is c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provides that : `Save as otherwise provided by this Act, all income shall, for the purposes of charge of income-tax and computation of total income, be classified under the following heads of income..'. There are five heads, which include `Profits and gains of business or profession'. Sections 69 and 69A fall under the Chapter VI of the Act with sub-head `Aggregation of income'. From the language of these sections as reproduced supra, it is overt that they deal with deeming unexplained investments and unexplained money etc. as income of the financial year in which the assessee has made unexplained investments or found to be owner of unexplained money etc. These provisions do not provide for any separate head under which such incomes are t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he investments ....'. Emphasis in this provision is on the non-satisfactory explanation about the source of investment and not the investment itself. Amount of investment is only a measure for quantifying the amount of addition. Raison d'etre for the addition is not giving any satisfactory explanation about the source of income, which was used for investment. If source is explained, there can be no addition on account of investment. 10. Extantly, we are confronted with a situation, in which both the source and destination are business inasmuch as the source of the income is business and the destination of such income is again in the nature of business assets, that is, stock, cash and receivables. As a fortiori, such an income will be cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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