M/s Marshal Machines Pvt. Ltd., Ludhiana V. DCIT, Ludhiana

CO 11/CHANDI/2017

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3760 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 3 month(s) 1 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 22-05-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2013-2014
• Appeal Filed On: 20-02-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RENU AMITABH
• Assessee Lawyers: Y K SUD
• Keywords: Rejection of books of accounts; Unexplained expenditure; Business income; Depreciation; Deemed to accrue or arise in india; Unabsorbed depreciation
• Section: 69C; 133A; 69; 6; 56; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.57/CHD/2017 ASSESSMENT YEAR: 2013-14 THE DCIT VS. M/S MARSHAL MACHINES PVT. LTD. CIRCLE-I, C-86, PHASE-V, FOCAL POINT LUDHIANA LUDHIANA PAN NO. AADCM1377N CROSS OBJECTION NO. 11/CHD/2017 (IN ITA NO. 57/CHD/2017) ASSESSMENT YEAR: 2013-14 M/S MARSHAL MACHINES PVT. LTD. VS. THE DCIT C-86, PHASE-V, FOCAL POINT CIRCLE-I, LUDHIANA LUDHIANA (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. Y.K. SUD DEPARTMENT BY : SMT. RENU AMITABH DATE OF HEARING : 04/04/2018 DATE OF PRONOUNCEMENT : 22/05/2018 ORDER PER BENCH: THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AN D CROSS OBJECTION FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A)-1, LUDHIANA DT. 27/10/2016. 2. THE REVENUE HAS RAISED ONLY ONE EFFECTIVE GROUND OF APPEAL WHICH READS AS UNDER: WHETHER UPON FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS JUSTIFIED IN REVERSING THE ACTION OF AO FOR TREATED THE SURRE NDERED INCOME AS DEEMED INCOME U/S 69 & 69B OF THE I.T. ACT, 1961 AND TREAT ING THE SAME AS BUSINESS INCOME AND ALLOWED THE SAME TO BE SET OFF AGAINST B USINESS LOSS/DEPRECIATION LOSS OR ANY OTHER EXPENSES? 3. THE ASSESSEE HAS RAISED ONLY ONE EFFECTIVE GROUN D IN HIS CROSS OBJECTION WHICH READS AS UNDER: 2 THAT THE CIT(A) WAS NOT JUSTIFIED IN TREATING RS. 0.17 CRORES SURRENDER AS DEEMED INCOME COVERED U/S 69, 69B & 69C OF THE INCOME TAX ACT, 1961. 4. THE SUM OF THE FACTS OF THE CASE AND THE ARGUMEN TS TAKEN BEFORE THE LD. CIT(A) AND THE RATIONALE RELIED UPON BY THE LD. CIT(A) WHILE DELETING THE ADDITION IS AS UNDER: THE ISSUE RELATES TO NOT ALLOWING THE BUSINESS LOSS OF RS. 1,04,18,004/- TO BE SET OFF AGAINST THE SURRENDERED INCOME OF RS. 3,50,00,000/- . DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT DURING THE COURSE OF SURVEY CONDUCTED U/S 133A OF THE IT ACT ON THE BUSINESS PR EMISES OF THE ASSESSEE, THE ASSESSEE SURRENDERED AN AMOUNT OF RS. 3.50 CRORE OV ER AND ABOVE THE NORMAL BUSINESS INCOME. THE ADDITIONAL INCOME WAS SURRENDE RED ON ACCOUNT OF INVESTMENT, MONEY, EXPENSE WHICH COULD NOT BE EXPLA INED OR WAS NOT REFLECTED IN THE BOOKS OF ACCOUNTS AND ALSO CERTAIN RECEIVABL ES WERE NOT SHOWN IN THE BOOKS OF ACCOUNTS. THE AO ALSO RELIED UPON THE DECISION OF HON'BLE PUN JAB & HARYANA HIGH COURT IN THE CASE OF KIM PHARMA LTD. VS. CIT IN ITA NO. 106 OF 2011. THE ASSESSEE WAS ASKED AS TO WHY SURRENDERED INCOME SHOULD NOT BE TREATED AS DEEMED INCOME. IN RESPONSE, THE AR SUBMITTED THAT THE ASSESSEE SURREN DERED RS. 2 CRORE DUE TO HIGHER INVENTORY AS ON DATE OF SURVEY WAS ON ACCOUN T OF DIFFERENCE IN VALUATION OF FINISHED GOODS AS SUCH IT CONSTITUTES INCOME FRO M BUSINESS. SIMILARLY, SURRENDER ON ACCOUNT OF BALANCE OF SUNDR Y CREDITORS M/S SPINNER EVMA LTD. & M/S AHMED NAGAR FORGING LTD. WAS ALSO ACCOUN T OF BUSINESS TRANSACTION AND THESE AMOUNTS HAD BEEN SURRENDER DURING THE SUR VEY AND RELATES TO BUSINESS INCOME. ALL THESE HAD BEEN DECLARED OVER & ABOVE NO RMAL BUSINESS INCOME OF THE COMPANY. FURTHER, ACCORDING TO THE ASSESSEE, EV EN IF IT WAS CONTENDED THAT THE ASSESSEE HAD INCURRED LOSS FROM PROFIT OF THE B USINESS AFTER DEDUCTING SURRENDERED INCOME CONSIDERING IT AS DEEMED INCOME. THE AR SUBMITTED THAT AS PER THE DECISION IN THE CA SE OF LIBERTY PLYWOOD (P) LTD. VS. ASST. CIT 2013 TAX PUB (DT) 0831 (CHD-TRIB) 029 3, THE UNABSORBED DEPRECIATION CAN BE SET-OFF AGAINST THE DEEMED INCOME , AS THE C OMPANY HAS CURRENT YEAR DEPRECIATION OF RS. 1,23,61,513/- WHICH CAN ALSO BE SET OFF AGAINST THE BALANCE TAXABLE INCOME OF RS. 1,06,09,974/- AFTER AT AFTER DEDUCTING SURRENDERED AMOUNT OF RS. 3.50 CRORE FROM THE RETURNED BUSINESS INCOME OF RS. 2,43,90,026/-. THE AO WAS NOT SATISFIED WITH THE REPLY OF THE ASSESSEE AN D NOT ALLOWING TO SET-OFF THE BUSINESS LOSSES AGAINST DEEMED INCOME WHICH HAD BEE N SURRENDERED DURING THE SURVEY. 2.1 DURING THE COURSE OF THE APPELLATE PROCEEDINGS, THE AR SUBMITTED HIS REPLY AS UNDER: 'THE APPELLANT HAS CHALLENGED THE SURRENDERED INCOM E OF RS-3,50,00,000 REPRESENTS BUSINESS INCOME AND CLAIMED SET OFF OF C URRENT YEAR BUSINESS LOSS AGAINST THE SAID INCOME. HOWEVER THE A.O CONSIDERED THE SAID INCOME AS INCOME FROM OTHER SOURCES U/S 69 AND 69A OF THE INC OME TAX ACT, 1961 THE BRIEF FACTS ARE THAT A SURVEY U/S 133A OF THE INCOME TAX ACT, 1961 WAS CARRIED OUT IN THE BUSINESS PREMISES OF THE ASSESSEE ON 31- 08-201 2 AND THE TIME OF THE SURVEY THE ASSESSEE MADE A SURRENDER OF RS.3,50,00,000 AS PER THE FOLLOWING DETAILS (IN RUPEES) A) DISCREPANCY IN STOCK 2.00 CRORES B) DISCREPANCY IN COST OF CONSTRUCTION OF FACTORY PLOT NO. D -116A PHASE V, FOCAL POINT, LUDHIANA 0.50 CRORES 3 C) DISCREPANCY IN COST OF CONSTRUCTION OF FACTORY BUIL DING AT C-86, PHASE V, FOCAL POINT, LUDHIANA 0.53 CRORES D) DISCREPANCY IN CREDITORS 0.30CRORES E)CASH 0.17 CRORES TOTAL 3.50 CRORES THE SURRENDER LETTER OF THE ASSESSEE IS AVAILABLE O N PAGE 4 OF THE ASSESSMENT ORDER. IT IS VERY CLEAR THAT THE SURRENDER MADE BY THE ASSESSEE IS CLEARLY ON ITS BUSINESS INCOME. THERE IS NOT EVEN A SINGLE ITEM SU RRENDERED BY THE ASSESSEE WHICH SUGGESTS THAT ANY ITEM SURRENDERED DOES NOT R ELATE TO THE NORMAL BUSINESS CARRIED OUT BY THE ASSESSEE. IT IS PERTINENT TO MEN TION HERE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING ELECTRONICS INCLUDING COMPUTER HARDWARE AND ALL THE OBJECTS OF THE COMPANY ARE TO CARRY ON THE BUSINESS ACTIVITIES AS STATED IN THE MEMORANDUM OF ASSOCIATION. THE DEPARTMENT DURING THE COURSE OF SURVEY WAS NOT ABLE TO FIND ANY SOURCE OF INCOME EXCEPT THE BUSINESS OF MANUFACTURING OF ELEC TRONICS AND HARDWARE COMPONENTS. THERE HAS BEEN NO ADVERSE FINDINGS OR N OTE GIVEN BY THE SURVEY TEAM. HOWEVER DURING THE ASSESSMENT PROCEEDINGS, TH E AO GAVE A SHOW CAUSE AS TO WHY THE SURRENDERED INCOME OF RS. 3,50,00,000 SHOULD NOT BE TREATED AS DEEMED INCOME TO WHICH THE ASSESSEE FILED A REPLY B UT THE AO FORMED A VIEW THAT ONCE THE ASSESSEE HAS SURRENDERED THE INCOME O VER AND ABOVE THE NORMAL BUSINESS INCOME, THE SAME IS REQUIRED TO BE TAXED A S 'INCOME FROM OTHER SOURCES' UNDER SECTION 69, 69A AND 69B OF THE INCOME TAX ACT , 1961 FURTHER ALL THE PURCHASES AND SALES WERE FULLY VOUCHED, THE AO HAS NOT DOUBTED THIS ASPECT. WITHOUT PREJUDICE TO ABOVE, EVEN IF THE CONTENTION OF THE AO IS TO BE CONSIDERED THAT THAT IN CASE THE INCOME IS ADDED TO THE PRESEN T BUSINESS INCOME THERE WOULD HAVE BEEN A LOSS OF RS. 1 04,40,504 THE AO COULD NO T POINT OUT EVEN A SINGLE DEFECT IN THE BOOKS OF ACCOUNT NOR HE HAS REJECTED THE BOOKS OF ACCOUNTS IN SUPPORT OF HIS CONTENTION. TO SUPPORT HIS VIEW THE A 0 RELIED ON THE JUDGMENT OF DULARI DIGITAL PHOTO SERVICES PRIVATE LIMITED VS CIT IN ITA NO 189 OF 2012 BUT TH E COPY OF JUDGMENT WAS NOT PROVIDED TO THE ASSESSEE. HOWEVER, FROM THE EXTRACT S OF THE JUDGMENT WHICH THE AO HAS REPRODUCED IN HIS ORDER IT IS CLEARLY DISTIN GUISHABLE AND CANNOT BE APPLIED TO THE ASSESSEE FOR THE REASONS THAT THE HON'BLE HI GH COURT HAS HELD THAT WHILE ANALYZING INCOME FROM OTHER SOURCES, IT WOULD BE TA XED UNDER THAT HEAD ONLY OF THE RELATABLE SOURCE KNOWN OTHERWISE IF THE HEAD IS NOT KNOWN IT WOULD BE TAXED U/S 68. THIS JUDGMENT CANNOT BE APPLIED TO THE ASSESSEE SIN CE THE ASSESSEE HAS MADE THE SURRENDER BY SPECIFYING THE HEADS WHICH ARE ALL BUSINESS HEADS AND THE SURRENDER WAS DULY ACCEPTED BY THE DEPARTMENT AND T HE TAX ON THE INCOME WAS ALSO CHARGED ON THE INCOME WHICH IS CLEAR FROM THE SURRENDER LETTER REPRODUCED ON PAGE 4 OF THE ASSESSMENT ORDER. FURTHER THE A 0 RELIED UPON THE JUDGMENT OF HON'BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF KIM PHARMA LTD VS CIT IN ITA 1 06 OF 2011 258 CTR 454 IN FACT THIS JUDGMENT SUPPORTS THE CASE OF THE ASSESSEE BEC AUSE IN THIS CASE, THE ASSESSEE HAD SURRENDERED THE AMOUNT WITHOUT DISCLOSING ITS S OURCE AND THEREFORE THE HON'BLE HIGH COURT HELD THAT WHERE THE INCOME IS SU RRENDERED WITHOUT DISCLOSING THE SOURCE THE SAME WOULD BE ASSESSABLE AS INCOME F ROM OTHER SOURCES. THE ASSESSEE IN THAT CASE HAD HIMSELF SURRENDERED THE I NCOME AS INCOME FROM OTHER SOURCES. IN THE SAME CASE FOR ASSESSMENT YEAR 2005- 2006, THE ASSESSEE SURRENDERED RS10 LAKHS AS SUNDRY CREDITORS, REPAIRS TO BUILDINGS AND ADVANCE TO STAFF WHICH WAS RELATABLE TO BUSINESS OF THE ASSESS EE. HOWEVER IT WAS TREATED AS BUSINESS INCOME BY THE CIT (A) AND IT AT. IN THE PRESENT CASE THE ENTIRE SURRENDER HAS BEEN MADE WHICH RELATES TO THE BUSINESS OF THE ASSESSEE AND WHICH WAS ACCEPTED BY THE INCOME TAX 4 DEPARTMENT AND TAX REALIZED ON THE SAME. HENCE IT C OULD NOT HAVE BEEN TREATED AS INCOME U/S 69 AND 69A. THE CONTENTION OF THE AO THAT THE INCOME HAS NOT BEEN REFLECTED IN THE BOOKS OF ACCOUNTS IS NOT CORR ECT AS ALL THE ENTRIES OF THE SURRENDER AMOUNT HAVE BEEN RECORDED IN THE BUSINESS HEADS OF THE ASSESSEE IN ITS BOOKS OF ACCOUNTS. THE COPY OF LEDGER ACCOUNT OF TH E SAME ARE ENCLOSED.(PG 1- 12) ALL THE INCOME SURRENDERED ARE REFLECTED IN THE BOOKS OF ACCOUNTS IT IS FURTHER STATED THAT ONCE A SPECIFIC SURRENDER MADE BY THE A SSESSEE HAS BEEN ACCEPTED BY THE INCOME TAX DEPARTMENT AND TAX ON THE SAME HA S BEEN REALIZED, THE DEPARTMENT CANNOT TAKE A U TURN WHILE FRAMING THE A SSESSMENT OF THE ASSESSEE BY TAXING THE SAME UNDER THE HEAD INCOME FROM OTHER SO URCES UNDER SECTION 69, 69A AND 69B. IT HAS TO BE ASSESSED UNDER THE HEAD I NCOME FROM BUSINESS. REFERENCE IS INVITED TO THE JUDGMENT OF ITAT CHANDI GARH IN THE CASE OF GAURISH STEELS PRIVATE LIMITED VS AC IT ITA 1080/CHD/2014 W HEREIN RULING IN THE FAVOR OF THE ASSESEE THE TRIBUNAL HELD IN THE PRESENT CASE THE A SSESSING OFFICER HAS NO WHERE DISPUTED THE BUSINESS LOSSES INCURRED BY THE ASSESE E. THE BOOKS OF ACCOUNTS HAVE NOT BEEN REJECTED.. IT WAS STATED AT THE BAR THAT E VEN AT THE TIME OF SURVEY, IN THE TRADING ACCOUNT PREPARED BY THE SURVEY TEAM, THERE WERE LOSSES INCURRED BY THE ASSESSEE. ALL THESE FACTS HAVE NOT BEEN DISPUTED BY THE ASSESSING OFFICER. FURTHER THE SURRENDER MADE BY THE ASSESSEE WAS ON ACCOUNT O F CASH FOUND DURING THE SURVEY, DISCREPANCY IN THE COST OF CONSTRUCTION OF BUILDING, DISCREPANCY IN STOCK AND DISCREPANCY IN ADVANCES AND RECEIVABLES. BY NO STRETCH OF IMAGINATION, ANY OF THESE INCOMES APART FROM CASH CAN BE CONSIDERED AS INCOME UNDER ANY HEAD OTHER THAN BUSINESS INCOME. (COPY OF JUDGMENT ENCLO SED PG 13-18) YOUR KIND ATTENTION IS DRAWN TO THE JUDGMENT OF ITAT CHANDIGA RH IN THE CASE OF KUMAR ENTERPRISES VS DCIT., CHANDIGARH IT A NO.525/CHD/20 14 WHEREIN THE TRIBUNAL WHILE QUASHING THE ORDERS OF COMMISSIONER OF INCOME TAX H ELD. THE COMMISSIONER OF INCOME TAX HAS ALSO RELIED ON T HE JUDGMENT IN THE CASE OF M/S KIM PHARMA (P) LTD. (SUPRA). WE WISH TO STALE H ERE THAT IN THAT CASE, THE ONLY ISSUE WAS WITH REGARD TO THE CASH SURRENDERED AT TH E TIME OF SURVEY AND NO OTHER INCOMES. SINCE OTHER INCOMES WERE ALREADY TREATED B Y THE ASSESSING OFFICER HIMSELF AS BUSINESS INCOME, THEREFORE, THE PROPOSIT ION OF THAT CASE IS NOT APPLICABLE TO THE PRESENT CASE. ANOTHER POINT RAISE D BY THE COMMISSIONER OF INCOME TAX IN HIS ORDER, WHILE DISTINGUISHING THE C ASE OF KARNATAKA HIGH COURT IN THE CASE OFS.K. SRIGIRI & BROS.(SUPRA), HE HAS STAT ED THAT IN THAT CASE THE FINDING WAS RECORDED THAT THE ADDITIONAL INCOME SURRENDERED BY THE ASSESSEE WAS OF BUSINESS ONLY, WHICH IS NOT THERE IN THE PRESENT CASE. IN TH IS REGARD, ON PERUSAL OF THE RECORD, WE FIND THAT AMPLE QUERIES REGARDING THE NA TURE AND SOURCE OF INCOME WERE MADE BY THE ASSESSING OFFICER DURING THE ASSES SMENT PROCEEDINGS, WHICH WERE DULY REPLIED TO BY THE ASSESSEE. WE DO NOT HES ITATE TO HOLD THAT EVEN IF THE ASSESSING OFFICE HAS NOT MENTIONED THE FACT OF THE SURRENDERED INCOME BEING BUSINESS INCOME, SPECIFICALLY IN HIS ORDER, WE UNDE RSTAND THAT THE ASSESSING OFFICER WAS SATISFIED TO THE EFFECT THAT THE INCOME SURREND ERED PERTAINED TO THE BUSINESS OF THE ASSESSEE. IN VIEW OF THIS, WE SEE THAT THE A SSESSING OFFICER HAD MADE DETAILED ENQUIRIES AND FORMED AN OPINION WHICH WAS NOT ILLEGAL AND HIS OPINION IS BASED ON MATERIAL AND EVIDENCES ON RECORD. THIS IS NOT THE CASE OF ANY ERROR HAVING CREPT IN THE ORDER OF THE ASSESSING OFFICER, THEREFORE, THE COMMISSIONER OF INCOME TAX WAS NOT RIGHT IN HOLDING THE ORDER OF TH E ASSESSING OFFICER TO BE ERRONEOUS. FOR ASSUMING JURISDICTION UNDER SECTION 263 OF THE ACT, TWIN CONDITIONS OF THE ORDER BEING ERRONEOUS AS WELL PREJUDICIAL TO THE INTEREST OF THE REVENUE ARE TO BE APPLIED SIMULTANEOUSLY. SINCE WE HAVE ALREADY RECORDED THAT THERE IS NO ERROR IN THE ORDER OF THE ASSESSING OFFICER, THE CO MMISSIONER OF INCOME TAX CANNOT ASSUME JURISDICTION UNDER SECTION 263 OF THE ACT. A CCORDINGLY, WE QUASH THE ORDER OF THE COMMISSIONER OF INCOME TAX PASSED UNDER SECT ION 263 OF THE ACT. (COPY OF JUDGMENT ENCLOSED 19-32) SIMILARLY IN THE JUDGMENT OF ITAT AHMEDABAD IN THE CASE OF DCIT VS SHAH KHODIDAS & CO. ITA NO.531/AHD/2008. WHERE SOURCE OF INVESTME NT/EXPENDITURE IS CLEARLY IDENTIFIABLE AND ALLEGED UNDISCLOSED ASSET HAS NO I NDEPENDENT EXISTENCE OF ITS OWN OR THERE IS NO SEPARATE PHYSICAL IDENTITY OF SU CH INVESTMENT/EXPENDITURE THEN FIRST WHAT IS TO BE TAXED IS THE UNDISCLOSED BUSINE SS RECEIPT INVESTED IN UNIDENTIFIABLE UNACCOUNTED ASSET AND ONLY ON FAILUR E 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 IS 5 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 FIND OUT LINK OF UNDECLARED INVESTMENT/EXPENDITURE WITH THE KNOWN HE AD, GIVE OPPORTUNITY TO THE ASSESSEE TO ESTABLISH NEXUS AND IF IT IS SATISF ACTORILY ESTABLISHED THEN IT SHOULD BE CONSIDERED AS DEEMED INCOME UNDER SECTION 69,69A ,69B, & 69C AS THE CASE MAY BE. IT IS BECAUSE WHEN ASSESSEE FAILS TO EXPLAI N SATISFACTORILY THE SOURCE OF SUCH INVESTMENT THEN IT SHOULD BE TAXED UNDER SECTI ON 69,69A,69B, & 69C AS THE CASE MAY BE. IT SHOULD NOT BE DONE AT THE FIRST INS TANCE WITHOUT GIVING OPPORTUNITY TO THE ASSESSEE TO ESTABLISH NEXUS. THEREFORE, THER E IS N CONFILICT WITH THE DECISION OF HON. GUJARAT HIGH COURT IN THE CASE OF FAKIR MOH MED HAJI HASAN(SUPRA) WHERE INVESTMENT IN AN ASSET OR EXPENDITURE IS NOT IDENTI FIABLE AND NO ITA NO.531/AHD/2008 ASST. YEAR 2004-05 NEXUS WAS ESTABL ISHED THEN WITH ANY HEAD OF INCOME AND THUS WAS NOT AVAILABLE FOR SET OFF AGAIN ST ANY LOSS UNDER ANY OTHER HEAD. THEREFORE, WE HOLD THAT WHERE ASSET IN WHICH UNDECLARED INVESTMENT IS SOUGHT TO BE TAXED IS NOT CLEARLY IDENTIFIABLE OR D OES NOT HAVE INDEPENDENT IDENTITY BUT IS INTEGRAL AND INSEPARABLE (MIXED) PA RT OF DECLARED ASSET, FALLING UNDER A PARTICULAR HEAD, THEN THE DIFFERENCE SHOULD BE TREATED AS UNDECLARED. 5. THE LD. CIT(A) HELD THAT THE ASSESSEE HAS SURRENDER ED RS. 3,50,00,000/- AS BUSINESS INCOME AND CLAIMED SET-OFF OF CURRENT YEAR BUSINESS LOSS AGAINST THE SAME. THE ASSESSING OFFICER CONSIDERED THE SAID INC OME AS INCOME FROM OTHER SOURCES U/S 69 AND 69A OF THE ACT. THE APPELLANT MA DE A SURRENDER OF THE SAID AMOUNT DURING THE COURSE OF SURVEY U/S 133A OF THE ACT UNDER THE FOLLOWING HEADS: DISCREPANCY IN STOCK RS. 2 CRORES DISCREPANCY IN COST OF CONSTRUCTION OF FACTORY PLOT RS.0.50 CRORES DISCREPANCY IN COST OF CONSTRUCTION OF FACTORY BUIL DING RS. 0.53 CRORE DISCREPANCY IN CREDITOR RS. 0.30 CRORE CASH RS. 0.17 CRORE TOTAL RS. 3.50 CRORE 6. IT WAS HELD THAT NOT A SINGLE ITEM SURRENDERED S UGGESTS THAT THE SAME DOES NOT RELATE TO NORMAL BUSINESS CARRIED OUT. FURTHER, THE DEPARTMENT COULD NOT FIND ANY SOURCE OF INCOME DURING THE SURVEY EXCEPT THE B USINESS OF THE APPELLANT. ALL PURCHASES AND SALES, ARE FULLY VOUCHED. ALL ENTRIES OF THE SURRENDERED AMOUNT HAVE BEEN RECORDED IN THE BUSINESS HEADS OF THE ASS ESSEE IN ITS BOOKS OF ACCOUNTS. ONCE THE SURRENDER HAD BEEN ACCEPTED BY T HE DEPARTMENT, THE ASSESSING OFFICER CANNOT TAX IT AS INCOME U/S 69, 6 9A AND 69B DURING THE ASSESSMENT PROCEEDINGS. RELIANCE WAS PLACED ON THE DECISION IN THE CASE OF GAURISH STEELS PVT. LTD. VS. ACIT ITA NO. 1080/CHD/ 2014 , WHEREIN IT WAS HELD THAT THE SURRENDER ON ACCOUNT OF DISCREPANCY IN COST OF CONSTRUCTION OF BUILDING, DISCREPANCY IN STOCK, DISCREPANCY IN ADVANCES AND R ECEIVABLES COULD NOT BE CONSIDERED UNDER ANY OTHER HEAD OTHER THAN BUSINESS INCOME. FURTHER, RELIANCE 6 WAS PLACED ON THE DECISION OF HON'BLE ITAT, CHANDIG ARH IN THE CASE OF KUMAR ENTERPRISES VS. DCIT CHANDIGARH ITA NO. 525/CHD/201 4 WHEREIN IT WAS HELD THAT THE ONLY ISSUE IN THE CASE OF M/S KIM PHARMA PVT. L TD. OF THE HON'BLE PUNJAB & HARYANA HIGH COURT WAS RELATING TO THE CASH SURREND ERED AS THE OTHER INCOMES WERE ALREADY TREATED BY THE ASSESSING OFFICER HIMSE LF AS BUSINESS INCOME. RELIANCE WAS ALSO PLACED ON THE JUDGMENT OF ITAT AH MADABAD IN THE CASE OF DCIT VS. SHAH KHODIDAS & CO. ITA NO. 531/AHD/2008 WHEREIN IT WAS HELD THAT IT IS ONLY WHERE NO NEXUS IS ESTABLISHED WITH ANY HEAD TH AT IT SHOULD BE CONSIDERED AS DEEMED INCOME U/S 69, 69A, 69B AND 69C AS THE CASE MAY BE. 7. LD. CIT(A) DELETED THE ADDITION BY PLACING RELIA NCE IN THE CASE OF M/S KHURANA ROLLING MILLS (P) LTD. IN APPEAL NO. 518/ I T/CIT(A)-L/LDH./2014-15 DATED 31.03.2016 FOR A.Y. 2012-13 AS UNDER: ' I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE , THE BASIS OF THE ADDITION MADE AND THE ARGUMENT OF THE AR. DURING THE COURSE OF TH E SURVEY OPERATIONS CONDUCTED AT ITS BUSINESS PREMISES, THE APPELLANT S URRENDERED AN AMOUNT OF RS. 1 CRORE. THE SAID INCOME HAS BEEN SHOWN IN THE P&L AC COUNT BY THE APPELLANT. THE ASSESSING OFFICER ASSESSED THE SURRENDERED INCOME A S DEEMED INCOME U/S 69 AND 69B BY RELYING ON THE JUDGMENT OF M/S KIM PHARMA PV T. LTD. ITA NO. 106 OF 2011 (P&H) & FAKIR MOHAMAD HAJI HASAN IN ITA NO. 165 CTR 1011 (GUJ). THUS, THE BUSINESS LOSSES WERE NOT ALLOWED TO BE SET OFF AGAI NST THE SURRENDERED INCOME. THE AR CONTENDED THAT THE APPELLANT IS MAINTAINING ALL THE STATUTORY RECORDS REQUIRED UNDER THE PROVISIONS OF THE CENTRAL EXCISE ACT, VAT ACT AND COMPANIES ACT AND THAT THERE IS NO FINDING DURING THE COURSE OF THE SURVEY OPERATIONS OR THE ASSESSMENT PROCEEDINGS TO THE EFFECT THAT THE APPEL LANT IS ENGAGED IN ANY ACTIVITY OUTSIDE THE BOOKS OF ACCOUNTS. THE AR FURT HER CONTENDED THAT ALL THE BOOKS OF ACCOUNTS UPTO THE DATE OF THE SURVEY ALONG WITH THE RELEVANT PURCHASE BILLS, SALES BILLS, EXPENDITURE VOUCHERS, CAPITAL E XPENDITURE AND OTHER SUPPORTING DOCUMENTS AND DETAILS WERE VERIFIED DURING THE COUR SE OF THE SURVEY BUT NO DISCREPANCY WAS FOUND THEREIN. FURTHER, THE STOCK W AS VERIFIED WITH THE EXCISE AND STOCK RECORDS SHOWING DETAILS OF PURCHASE OF RAW MA TERIAL, CONSUMABLE STORES, RAW MATERIAL USED FOR PRODUCTION, SALE OF FINISHED GOODS, WASTAGE AND CLOSING STOCK OF RAW MATERIALS AND NO DISCREPANCY WAS FOUND DURING THE COURSE OF THE SURVEY OPERATIONS. NO DISCREPANCY WAS FOUND IN THE CASH IN HAND VERIFIED WITH THE BOOKS OF ACCOUNTS. THEREFORE, THERE IS FORCE IN THE APPELLANT'S CONTENTION THAT IT WAS MAINTAINING COMPLETE BOOKS OF ACCOUNTS WITH PRO PER RECORDS ON THE DATE OF THE SURVEY AND NO INCRIMINATING EVIDENCE OR RECORD NOT IN CONSONANCE WITH THE BOOKS OF ACCOUNTS WAS FOUND. THERE WAS NO CASH CRED IT FOUND DURING THE SURVEY WHICH THE APPELLANT COULD NOT EXPLAIN. NO INVESTMEN T WAS FOUND WHICH WAS NOT RECORDED IN THE BOOKS OF ACCOUNTS. FURTHER, NO DOCU MENT, INFORMATION, RECORDS SHOWING OWNERSHIP OF ANY MONEY, BULLION JEWELLERY O R OTHER VALUABLE ARTICLE WAS FOUND AND NEITHER ANY EVIDENCE SHOWING THAT THE APP ELLANT WAS THE OWNER OF ANY BULLION JEWELLERY OR OTHER VALUABLE ARTICLE WHE RE IT WAS FOUND THAT AMOUNT INVESTED IN THE SAME EXCEEDED THE AMOUNT RECORDED I N THE BOOKS OF ACCOUNTS. NO EVIDENCE WAS FOUND SHOWING THAT THE APPELLANT HA D INCURRED ANY EXPENDITURE FOR WHICH NO EXPLANATION COULD BE OFFER ED REGARDING THE SOURCE OF THE SAID EXPENDITURE. THUS, THE AR CONTENDED THAT S EC68, 69, 69A, 69B AND 69C ARE NOT APPLICABLE IN ITS CASE. THE APPELLANT SURRE NDERED RS. 1 CRORE AS BUSINESS INCOME IN THE FORM OF SUNDRY DEBTORS DURING THE SUR VEY OPERATIONS. THE AR HAS CONTENDED THAT THE SURRENDER OFFERED BY APPELLANT O N ACCOUNT OF UNDISCLOSED SUNDRY DEBTORS IS PURELY RELATED TO THE BUSINESS CA RRIED OUT BY THE APPELLANT. NO UNDISCLOSED BUSINESS ACTIVITY HAS BEEN FOUND DURING THE SURVEY. THE AR POINTED OUT THAT AS PER THE STATEMENT OF SH. BALJINDER SING H S/O SH. CHARAN SINGH RECORDED DURING THE SURVEY OPERATIONS, THE AMOUNT OF RS. 1 C RORE WAS SURRENDERED AS 7 INCOME OF THE COMPANY OVER AND ABOVE THE NORMAL BUS INESS INCOME. THE AR HAS RIGHTLY POINTED OUT THAT IN THE CASE OF KIM PHARMA LTD. VS. ITO, IT AT CHANDIGARH BENCH, THE AMOUNT SURRENDERED ON ACCOUNT OF CASH WA S NOT ALLOWED TO BE ASSESSED AS BUSINESS INCOME SINCE THE SOURCE HAS NO T BEEN EXPLAINED AND THE SAME WAS ASSESSED U/S 69A OF THE ACT WHEREAS IN THE APPELLANT'S CASE MODE AND MANNER HAS BEEN APPLIED TO THE SURRENDERED INCOME A S APPLIED TO THE INCOME EARNED DURING THE REGULAR COURSE OF THE BUSINESS. N O EVIDENCE HAS BEEN FOUND DURING THE SURVEY OPERATIONS AND THE DISCREPANCIES FOUND WERE RELATED TO THE ASSESSEE'S BUSINESS AND NOT TO ANY OTHER SOURCE OF INCOME. THE SAID SUBMISSIONS OF THE AR WERE NOT CONTROVERTED IN THE REMAND REPORT. RELIANCE HAS BEEN PLACED BY THE AR ON THE DECISION OF SH. KULDEEP KUMAR VS. CIT, HON'BLE ITAT CHANDIGARH BENCH IN ITA 1015/CHD/2009 FOR A.Y. 2006-07 WHEREIN IT HAS BEEN HELD,AFTER CONSIDERING THE CASE OF THE HON'BLE GUJARAT HIGH CO URT IN THE CASE OF FAKIR MOHAMAD HAJI HASAN,THAT INCOME CANNOT FALL BEYOND T HE FIVE HEADS MADE UNDER THE ACT. FURTHER, RELIANCE HAS BEEN PLACED ON THE DECISION OF THE HON'BLE APEX COURT REPORTED IN CIT VS. D.P. SANDHU & BROS. 273 ITR 1 WHEREIN IT HAS BEEN HELD THAT SECTION 56 PROVIDES FOR CHARGEABILITY OF INCOME OF EVERY KIND WHICH HAS NOT BEEN EXCLUDED FROM THE TOTAL INCOME UNDER THE A CT ONLY IF IT IS NOT CHARGEABLE TO INCOME TAX UNDER ANY HEADS SPECIFIED IN SEC 14 AND IF THE INCOME IS INCLUDED UNDER ANY ONE OF THE HEADS IT CANNOT BE TAXED U/S 56. FURTHER, RELIANCE HAS BEEN PLACED ON THE CASE OF DCITVS. RAD HE DEVELOPERS INDIA LTD. &ANR. (GUJ) 329 ITR 1 WHEREIN THE JUDGMENT OF FAKIR MOHAMAD HAJI HASAN HAS BEEN CONSIDERED AND THE JUDGMENT OF THE HON'BLE APE X COURT IN THE CASE OF D.P SANDHU & BROS. P. LTD. SUPRA HAVE BEEN REFERRED TO AND IT HAS BEEN HELD THAT THE ACT DOES NOT ENVISAGE TAXING INCOME UNDER ANY HEAD NOT SPECIFIED U/S 14 OF THE ACT. THE DEPARTMENT DID NOT FIND ANY OTHER SOURCE O F INCOME EXCEPT THE BUSINESS OF MANUFACTURE OF STEEL ITEMS AND, ACCORDING TO THE AR, THE SAME IS CLEAR AS PER THE OFFER LETTER OF SURRENDER ALSO WHEREIN IT IS ST ATED THAT THE SURRENDER AMOUNT IS OVER AND ABOVE THE BOOK VERSION WHICH SHOWS THAT TH E INCOME OFFERED IS A PART AND PARCEL OF ITS EXISTING BUSINESS ACTIVITIES. REL IANCE HAS ALSO BEEN PLACED BY THE AR ON THE JUDGMENT OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF SHI I PA DYEING AND PRINTING MILLS 39 TAXMANN 3 WHEREIN, AFTER CONS IDERING ITS EARLIER JUDGMENT OF RADHE DEVELOPERS INDIA LTD. AND OF D.P SANDHU & BRO S.(SC), THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE AND THE JUDGMENT IN THE CASE OF KIM PHARMA LTD. (P&H) WAS CONSIDERED AND DISTINGUISHED. THE SU RRENDER MADE BY THE APPELLANT WAS ON ACCOUNT OF ADVANCES AND RECEIVABLE S WHICH ARE CONSIDERED UNDER THE HEAD 'BUSINESS INCOME'. THE ASSESSING OFF ICER HAS NOT BEEN ABLE TO ESTABLISH IN THE ASSESSMENT ORDER WITH SUPPORTING E VIDENCE THAT THE INCOME SURRENDERED WAS NOT OUT OF THE BUSINESS OF THE APPE LLANT. FURTHER, THERE IS FORCE IN THE APPELLANT'S CONTENTION THAT THE ASSESSING OFFIC ER HAS NOWHERE OBJECTED TO THE HEADS UNDER WHICH THE APPELLANT HAS SURRENDERED THE SE AMOUNTS. IN THE CASE OF M/S KIM PHARMA P. LTD. (P&H) SUPRA RELIANCE HAS BEE N PLACED ON THE RATIO LAID DOWN IN FAKIR MOHAMAD HAJI HASAN VS. CIT 247ITR 290 (GUJ) WHEREIN IT HAS BEEN HELD THAT ONLY WHERE THE NATURE AND SOURCE OF INVES TMENT MADE OR THE NATURE AND SOURCE OF ACQUISITION OF MONEY, BULLION ETC. OW NED BY THE ASSESSEE OR THE SOURCE OF EXPENDITURE INCURRED BY THE ASSESSEE ARE NOT EXPLAINED, THEN THE VALUE OF SUCH INVESTMENTS OR MONEY AND THE VALUE OF ARTIC LES NOT RECORDED IN THE BOOKS OR THE UNEXPLAINED EXPENDITURE MAY BE DEEMED TO BE THE INCOME OF SUCH ASSESSEE AND THAT THE MOMENT A SATISFACTORY EXPLANA TION IS GIVEN ABOUT THE NATURE AND SOURCE BY ASSESSEE, THE INCOME WOULD BE TREATED UNDER THE APPROPRIATE HEAD OF INCOME. HOWEVER, IN THE APPELLA NT'S CASE, THE ASSESSING OFFICER COULD NOT ESTABLISHED THAT PAYMENTS RECEIVE D AS PER THE SLIPS WERE FROM SOURCES OTHER THAN THE BUSINESS OF THE APPELLANT. T HEREFORE, APART FROM THE CASH, ALL OTHER INCOME SURRENDERED IS TO BE BROUGHT TO TA X UNDER THE HEAD BUSINESS INCOME WHILE THE CASH IS TO BE TAXED UNDER THE HEAD DEEMED INCOME U/S 69A OF THE ACT. MOREOVER, THE ASSESSING OFFICER HAS NOT DI SPUTED THE BUSINESS LOSSES OF THE APPELLANT. THE ASSESSING OFFICER HAS NOT FOUND ANY DISALLOWABLE EXPENDITURE TO SHOW THAT THE APPELLANT HAS MANIPULATED ITS BOOK S OF ACCOUNTS TO BRING DOWN ITS TOTAL INCOME. NO SUCH EVIDENCE HAS BEEN BROUGHT ON RECORD TO SHOW THAT THE ASSESSEE HAS BOOKED ANY BOGUS EXPENDITURE AND THERE IS THEREFORE NO REASON TO DOUBT THE VERACITY OF THE BOOKS OF ACCOUNTS AND THE EXPENDITURE THEREIN. THE HEADS UNDER WHICH THE SURRENDER HAS BEEN MADE HAS N OT BEEN CHALLENGED BY THE SURVEY TEAM OR THE ASSESSING OFFICER. IN THE CA SE OF KIM PHARMA VS. CIT IN ITA NO. 106 OF2011(P&H) SUPRA THE HON'BLE HIGH COURT HA S UPHELD THE TREATMENT OF 8 ADDITIONAL INCOME ON ACCOUNT OF SUNDRY CREDITS, REP AIRS TO BUILDING, AND ADVANCES TO STAFF TO BE TREATED UNDER THE HEAD 'INC OME FROM BUSINESS AND PROFESSION' AND ONLY IN RESPECT OF CASH FOUND WHERE NO CLEAR SOURCE COULD BE ESTABLISHED BY THE APPELLANT THE SAME WAS TREATED U NDER THE HEAD ' INCOME FROM OTHER SOURCES'. THE ASSESSING OFFICER HAS NOT APPRE CIATED THE DECISION IN THE CASE OF KIM PHARMA (SUPRA) PROPERLY AND HAS MISAPPLIED I T. THE AR HAS PLACED RELIANCE ON THE CASE OF M/S GAURISH STEELS PVT. LTD. REPORTE D IN 43 ITR 414 DATED 17.09.2015 OF THE HON'BLE ITAT CHANDIGARH BENCH, WHEREIN THE A SSESSING OFFICER DID NOT DISPUTE THE BUSINESS LOSSES INCURRED BY THE ASSESSE E AND DID NOT REJECT THE BOOKS OF ACCOUNTS. RELYING ON THE CASE OF KIM PHARMA P. L TD. VS. CIT (P&H) (SUPRA) AND REFERRING TO THE CASE OF FAKIR MOHAMAD HAJI HASAN V S. CIT (GUJ) (SUPRA), IT WAS HELD IN THE SAID CASE THAT THE INCOME APART FROM CASH, I N THE SHAPE OF DISCREPANCIES IN THE COST OF CONSTRUCTION OF BUILDING, IN STOCK AND IN ADVANCES AND RECEIVABLES WAS TO BE TREATED AS 'BUSINESS INCOME' AS THE ASSES SING OFFICER AND THE SURVEY TEAM FAILED TO FIND OTHER SOURCE OF INCOME EXCEPT F OR BUSINESS INCOME. THEREFORE, IN THE SAID CASE ONLY THE CASH FOUND WAS TREATED AS INCOME FROM OTHER SOURCES AND IT WAS HELD THAT ALL OTHER INCOME SURRENDERED C OULD BE BROUGHT TO TAX UNDER THE HEAD 'BUSINESS INCOME' AND THE BUSINESS LOSSES INCURRED BY THE ASSESSEE DURING THE YEAR WERE ALLOWED TO BE SET-OFF AGAINST THE INCOME SURRENDERED DURING THE SURVEY EXCEPT THE AMOUNT OF CASH SURRENDERED. T HE APPELLANT'S CASE IS COVERED BY THE SAID DECISION OF THE HON'BLE JURISDI CTIONAL ITAT IN THE CASE OF M/S GAURISH STEELS PVT. LTD. (SUPRA). 8. DURING THE HEARING BEFORE US THE LD. DR SMT. REN U AMITABH VEHEMENTLY ARGUED THAT SET OFF CANNOT BE ALLOWED AGAINST THE I NCOME SURRENDERED IN THE SURVEY CONDUCTED UNDER SECTION 133A AS THE SURREND ER AMOUNTS TO UNDISCLOSED INCOME ASSESSABLE UNDER SECTION 69. SHE RELIED ON T HE CASE OF KIM PHARMA PVT. LTD. (SUPRA) AND ALSO SANT STEEL & ALLOYS PVT. LTD. IN ITA NO. 2808 AND 2809/DEL/2013 DT. 02/06/2016 AND ALSO THE CASE OF F AKIR MOHAMMAN HAZI HASAN VS. CIT 247 ITR 290. 9. WE HAVE GONE THROUGH THE ENTIRE FACTS OF THE CAS ES RELIED UPON BY THE LD. DR IN THE CASE OF KIM PHAMRA (SUPRA) WHEREIN THE HO NBLE HIGH COURT HELD AS UNDER: THE SCHEME OF SECTIONS 69, 69A, 69B AND 69C OF THE INCOME-TAX ACT, 1961, WOULD SHOW THAT IN CASES WHERE THE NATURE AND SOURCE OF I NVESTMENTS MADE BY THE ASSESSEE OR THE NATURE AND SOURCE OF ACQUISITION OF MONEY, BULLION ETC., OWNED BY THE ASSESSEE OR THE SOURCE OF EXPENDITURE INCURRED BY THE ASSESSEE ARE NOT EXPLAINED AT ALL, OR NOT SATISFACTORILY EXPLAINED, THEN, THE VALUE OF SUCH INVESTMENTS AND MONEY OR THE VALUE OF ARTICLES NOT RECORDED IN THE BOOKS OF ACCOUNT OR THE UNEXPLAINED EXPENDITURE MAY BE DEEME D TO BE THE INCOME OF SUCH ASSESSEE. IT FOLLOWS THAT THE MOMENT A SATISFA CTORY EXPLANATION IS GIVEN ABOUT SUCH NATURE AND SOURCE BY THE ASSESSEE, THEN THE SOURCE WOULD STAND DISCLOSED AND WILL, THEREFORE, BE KNOWN AND THE INC OME WOULD BE TREATED UNDER THE APPROPRIATE HEAD OF INCOME FOR ASSESSMENT AS PE R THE PROVISIONS OF THE ACT. HOWEVER, WHEN THESE PROVISIONS APPLY BECAUSE NO SOU RCES IS DISCLOSED AT ALL ON THE BASIS OF WHICH THE INCOME CAN BE CLASSIFIED UND ER ONE OF THE HEADS OF INCOME UNDER SECTION 14 OF THE ACT, IT WOULD NOT BE POSSIBLE TO CLASSIFY SUCH DEEMED INCOME UNDER ANY OF THESE HEADS INCLUDING IN COME FROM 'OTHER SOURCES' WHICH HAVE TO BE SOURCES KNOWN OR EXPLAINED. WHEN T HE INCOME CANNOT BE SO CLASSIFIED UNDER ANY ONE OF THE HEADS OF INCOME UND ER SECTION 14, IT FOLLOWS THAT THE QUESTION OF GIVING ANY DEDUCTIONS UNDER THE PRO VISIONS WHICH CORRESPOND TO SUCH HEADS OF INCOME WILL NOT ARISE. IF IT IS POSSI BLE TO PEG THE INCOME UNDER ANY ONE OF THOSE HEADS BY VIRTUE OF A SATISFACTORY EXPL ANATION BEING GIVEN, THEN THESE 9 PROVISIONS OF SECTIONS 69,69A, 69B AND 69C WILL NOT APPLY, IN WHICH EVENT, THE PROVISIONS REGARDING DEDUCTIONS ETC. APPLICABLE TO THE RELEVANT HEAD OF INCOME UNDER WHICH SUCH INCOME FALLS WILL AUTOMATICALLY BE ATTRACTED. 10. IN THE CASE OF SANT STEEL & ALLOYS (SUPRA) THE HONBLE TRIBUNAL FOUND ON FACTUAL BASIS THAT THE AMOUNT RECEIVED BY THE ASSES SEE IS AN ACCOMMODATION ENTRY AND THE SOURCES HAVE NOT BEEN PROVED TO BE BE LONGING TO ANY OF THE HEADS MENTIONED UNDER SECTION 14, WHEREAS IN THE IN STANT CASE THE SURRENDER MADE BY THE ASSESSEE ON ACCOUNT OF STOCK, CONSTRUCT ION OF FACTORY, DISCREPANCY IN TRADE CREDITORS CAN BE SAID TO BE FROM THE EARN INGS OF THE BUSINESS AS THE ASSESSEE, A COMPANY HAS BEEN PROVED TO BE IN NO OT HER ACTIVITY EXCEPT IN THE BUSINESS OF ELECTRONICS AS DECLARED BEFORE THE REVE NUE AUTHORITIES. THE ASSESSING OFFICER HAS ALSO FAIRLY TREATED THE INCOME AS PROFI TS FROM BUSINESS & PROFESSION AND THE ASSESSEE HAS ALSO SURRENDERED THIS INCOME A S PROFITS OVER AND ABOVE ITS REGULAR BUSINESS INCOME. HENCE KEEPING IN VIEW THE ENTIRE GAMUT OF FACTS AND CIRCUMSTANCES OF THE CASE AND THE CASE LAWS RELIED BY THE AR BEFORE THE LD. CIT(A) , THE ARGUMENTS TAKEN BEFORE US BY THE LD. D R, WE HEREBY HOLD THAT THE SURRENDERED INCOME UNDER THE HEADS PERTAINING TO TH E PROFITS OF THE BUSINESS AND PROFESSION ARE ALLOWED TO BE SET OFF AGAINST TH E BUSINESS LOSS / DEPRECIATION LOSS AND SINCE THE NO SATISFACTORY EXPLANATION HAS BEEN GIVEN BY THE ASSESSEE FOR THE CASH PORTION, PROVING ITS SOURCES THE SAME IS NOT TO BE ALLOWED TO BE SET OFF AGAINST BUSINESS / DEPRECATION LOSSES. 11. AS A RESULT THE APPEAL OF THE REVENUE AND THE C ROSS OBJECTION OF THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DIVA SINGH) (DR. B.R.R. KUM AR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 22/05/2018 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR