M/s. A.R. Gaikwad & Co., Solapur V. Income-tax Officer,

ITA 1575/PUN/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0583 (ITAT-PUNE)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 21-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMITA BANERJI
• Assessee Lawyers: S N DOSHI
• Keywords: Unexplained investment; Unexplained expenditure; Capital asset; Business income; Income from undisclosed sources; Deemed to accrue or arise in india
• Section: 69C; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, PUNE . . , BEFORE SHRI R.K. PANDA, AM . / ITA NO.1575/PN/2016 / ASSESSMENT YEAR : 2009-10 M/S. A.R. GAIKWAD & COMPANY, C/O. RAMKRISHNA NIVAS, MIRAJ NAKA, SANGOLA, TAL : SANGOLA, DIST.SOLAPUR-413307 PAN : AAHFA4598G . / APPELLANT V/S ITO, WARD-1(4), PANDHARPUR . / RESPONDENT / APPELLANT BY : SHRI S.N. DOSHI / RESPONDENT BY : MS. SUMITA BANERJI / ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 01-03-2016 THE CIT(A)-7, PUNE RELATING TO ASSESSMENT YEAR 2009-10. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCT ION. IT FILED ITS RETURN OF INCOME ON 13-09-2009 DECLARING TOTAL INCOME AT RS.10,38,940/-. IN THIS CASE, A SURVEY U/S.133A OF THE I.T. ACT, 1961 WAS CONDUCTED ON 19-01-2009 DURING WHICH THE ASSESSEE HAD DECLARED ADDITIONAL INCOME OF RS.15,48,000/ - OVER AND ABOVE THE REGULAR INCOME FOR THE A.Y. 2009-10. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO OBSERVED THAT DURING THE COURSE OF SURVEY THE ASSESSEE HAD DECLARED / DATE OF HEARING :21.09.2016 / DATE OF PRONOUNCEMENT:21.10.2016 2 ITA NO.1575/PN/2016 ADDITIONAL INCOME OF RS.15,48,000/- ON ACCOUNT OF THE FOLLOWING: 1. RS.4,73,000/- ON ACCOUNT OF EXCESS CASH FOUND 2. RS.4,50,000/- ON ACCOUNT OF ADVANCES GIVEN TO PARTNER S NOT ACCOUNTED FOR IN THE BOOKS OF ACCOUNT 3. RS.6,25,000/- ON ACCOUNT OF LABOUR ADVANCE 3. HE OBSERVED THAT THE ABOVE DECLARATION WAS MADE ON THE BASIS OF NOTINGS IN THE DIARY FOUND DURING THE COURSE OF S URVEY ACTION WHICH WAS NOT ACCOUNTED FOR IN THE BOOKS OF ACCOU NT OF THE FIRM. HE OBSERVED THAT DURING THE SCRUTINY ASSESSME NT PROCEEDINGS THE ASSESSEE FIRM HAS OFFERED THE INCOME IN TH E PROFIT AND LOSS ACCOUNT ON ACCOUNT OF EXCESS CASH FOUND AT RS.4,00,073/- AND ADVANCE GIVEN TO PARTNERS NOT ACCOUNT ED FOR AT RS.4,50,000/- AND LABOUR ADVANCE OF RS.6,25,000/-. HOWEVER, THE NET PROFIT WAS ARRIVED AT RS.10,38,936/-. THU S, THE ASSESSEE HAS NOT DISCLOSED ADDITIONAL INCOME OF RS.15,48,000/- FOR TAXATION IN ADDITION TO THE REGULAR PROFIT AS PER THE DECLARATION MADE DURING THE SURVEY. HE, THEREFOR E, ASKED THE ASSESSEE TO FURNISH THE TRADING PROFIT AND LOS S ACCOUNT FOR THE PRE SURVEY PERIOD AND THE POST SURVEY PERIOD. 4. THE AO EXAMINED THE TRADING PROFIT AND LOSS ACCOUNT PREPARED FOR THE PRE AND POST SURVEY PERIOD AND ON AN ALYSIS OF THE SAME HE OBSERVED THAT ASSESSEE HAS SHOWN NET LOS S 71.88% OF THE TOTAL CONTRACT RECEIPT IN THE PRE SURVEY TRADING PROFIT AND LOSS ACCOUNT WHEREAS THE ASSESSEE HAS SUBMITTED THE T ENTATIVE TRADING ACCOUNT FOR THE PERIOD FROM 01-04-2008 TO 31-12 -2008 WITH NET LOSS OF 53.38%. SIMILARLY, IN THE POST SURVEY TRA DING PROFIT AND LOSS ACCOUNT THE NET PROFIT IS SHOWN AT RS.18,78,377/- WHICH INCLUDES THE DECLARATION OF ADDITIONAL 3 ITA NO.1575/PN/2016 INCOME OF RS.15,48,000/-. IF THIS ADDITIONAL INCOME IS REDUCED FROM THE NET PROFIT, THEN THE NET PROFIT COMES TO RS.3,30,31 9/- WHICH COMES TO 9.92% OF THE TOTAL CONTRACT RECEIPT. HE N OTED THAT IN THE CONSOLIDATED TRADING PROFIT AND LOSS ACCOUNT T HE NET PROFIT IS SHOWN AT RS.10,38,936/- ON THE TOTAL CONTRACT RE CEIPT OF RS.44,97,338/- WHICH INCLUDES THE ADDITIONAL INCOME OF RS.15,48,000/-. IF THIS ADDITIONAL INCOME IS REMOVED, THEN THE RESULT IS LOSS OF RS.5,09,064/- WHICH COMES TO -11.32% OF T HE TOTAL CONTRACT RECEIPT. HE, THEREFORE, WAS OF THE OPINION T HAT THE ASSESSEE HAS INFLATED THE EXPENSES IN THE TRADING PROFIT A ND LOSS ACCOUNT FOR THE POST SURVEY PERIOD AND AS A RESULT THE RE IS OVERALL LOSS OF 11.32% WHEREAS THE POST SURVEY TRADING PR OFIT AND LOSS ACCOUNT OF THE ASSESSEE THE NET PROFIT IS OF 9.92 % AFTER INCLUDING THE ADDITIONAL INCOME. SINCE THE ASSESSEE DID NOT PRODUCE THE BOOKS OF ACCOUNT AND EXPENDITURE VOUCHERS DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THE LOSS AT 1 1.32% WAS NOT SUPPORTED BY ANY EVIDENCE AND SINCE THE ASSES SEE HAS SHOWN NET PROFIT @ 6.42% IN A.Y. 2008-09 AND IT HAS DEBITE D INTEREST AND REMUNERATION TO PARTNERS IN THE CONSOLIDATE D PROFIT AND LOSS ACCOUNT WHICH IS NOT ADMISSIBLE IN VIEW OF THE DECIS ION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF M/S. VA IBHAV V. ITO THE AO ASKED THE ASSESSEE TO JUSTIFY THE INCOME DECLARED IN THE RETURN FILED BY IT. SINCE THE ASSESSEE DID NOT PROD UCE THE BOOKS OF ACCOUNT AND RELIED ON CERTAIN DECISIONS FOR DEDUC TION OF REMUNERATION AND INTEREST TO PARTNERS ON SUCH ADDITIO NAL INCOME DECLARED, THE AO REJECTED THE EXPLANATION GIVEN BY THE ASSESSEE AND DETERMINED THE TOTAL INCOME OF THE ASSESSE E AT RS.18,36,730/- BY ESTIMATING NET PROFIT @6.42% ON THE CONTR ACT RECEIPT WHICH COMES TO RS.2,88,729/-. FURTHER, HE MADE 4 ITA NO.1575/PN/2016 ADDITION OF RS.15,48,000/- BEING THE ADDITIONAL INCOME DISCLOSED DURING THE COURSE OF SURVEY. THUS, HE DETERMINED THE TOTAL INCOME AT RS.18,36,730/-. THE AO DID NOT ALLOW ANY REMUNERATION AND INTEREST TO PARTNERS FROM SUCH INCOME. IN APPEAL THE LD.CIT(A) UPHELD THE ACTION OF THE AO. 5. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL WITH THE FOLLOWING GROUNDS : 1. ON TH E FA C T S AND IN TH E C IR C UM S TANCES OF THE CAS E , THE LD.CIT(A) HA S ERR E D IN UPHOLDING THE E S TIMATION OF NET PROFIT AND ADOPTING THE NP RATIO OF LAST YEAR AND MAKIN G AN ADDITION O F R S 2,88 ,7 29 / - MEREL Y ON THE BA S IS OF S USPICION AND SURMIS E AND FURTH ER E R RE D IN DI S REGARDING THE FACT THAT AS SES SIN G OFFICER ON PRODU C ING TH E B O OK S OF A CC OUNT S HAS FAILED IN POINTIN G OUT ANY DEFECTS IN BOOKS O F A CC OUNT S DUL Y A U DI TED U / S 44 A B OF THE I. T.A C T , 1961. 2. ON THE FACT S AND IN THE C IRCUMSTANCES OF THE CASE , LD.CIT(A) HAS FURTHER ERRED IN NOT ALLOWING TH E INT E R ES T AND REMUNERATION TO THE PARTNERS ON THE ADDITIONAL INCOME DE C LARED OF R S 4,50,000 / - ON ACCOUNT OF ADVANCES GIVEN TO PARTNERS AND R S 6,25 , 000/- ON ACCOUNT OF LABOUR ADVANCES, OVERLOOKING THE FACT THA T THOSE INCOME S HAVE BEEN DE C LARED AS AND IN FACT, ARE BUSINESS INCOME AND THEREBY ELIGIBLE TO BE IN C LUDED IN COMPUTATION OF BOOK PROFITS U / S 40(B) OF THE I.T. A CT , 1 961. 3. TH E ABO V E GROUND S OF APPEAL MAY KINDLY BE ALLOWED TO BE AMENDED, ALTER, AND / OR MODIFIED IN TH E I N T E RE S T OF NATURAL JU S TI C E. 6. THE ASSESSEE HAS ALSO FILED AN ADDITIONAL GROUND WHICH READS AS UNDER : ON TH E FA C T S AND IN TH E C IR C UM S TANCES OF THE CAS E THE ASSESSING OFFICER HAS ERRED IN MAKING THE ADDITION OF RS.15,48 ,000/- DECLARED IN THE COURSE OF SURVEY OVERLOOKING THE FACT THAT THE SAID AMOUNT IS DULY OFFERED AND REFLECTED IN THE PROFIT A ND LOSS ACCOUNT. 7. AFTER HEARING BOTH THE SIDES, THE ADDITIONAL GROUND RAIS ED BY THE ASSESSEE IS ADMITTED SINCE ALL MATERIAL FACTS ARE AV AILABLE ON RECORD AND NO FRESH FACTS ARE REQUIRED TO BE INVESTIGATED. 5 ITA NO.1575/PN/2016 8. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS CORRECTLY DECLARED THE ADDITIONAL INCOME IN THE PROFIT AND LOSS ACCOUNT AND DETERMINED THE PROFIT AT RS.10,38,940/- AFTER CLAIMING SALARY AND INTEREST TO PARTNER S. HE SUBMITTED THAT THE AO HAS ERRONEOUSLY COMPUTED TH E PERCENTAGE OF PROFIT/LOSS FOR PRE SURVEY AND POST SURVEY PERIOD. HE SUBMITTED THAT THE NET PROFIT FOR THE IMPUGNED ASSESS MENT YEAR CANNOT BE COMPARED WITH THE NET PROFIT OF THE PREC EDING YEAR SINCE IN THE INSTANT YEAR THE GROSS CONTRACT REC EIPT GOT REDUCED BY RS.1,77,91,000/-. FURTHER, DURING THE IMPUGNED ASSESSMENT YEAR THE BANK INTEREST IS INCREASED BY RS.2,51,363/- SINCE IN THE PRECEDING YEAR THE CC LOAN WAS FOR A PERIOD OF 4 MONTHS ONLY WHEREAS FOR THE IMPUGNED ASSESSMENT YEAR THE SAME WAS FOR 12 MONTHS. FURTHER, MISCELLANEOUS EXPENSES HAVE ALSO GONE UP BECAUSE THE ASSESSEE HAS DEBITED AN AMOUNT OF RS.1,45,483/- BEING THE AMOUNT P AID BY DEMAND DRAFT TO EXECUTIVE ENGINEER, KOLHAPUR FOR GETTIN G THE DRAWING PREPARED. HE SUBMITTED THAT THE NET PROFIT OF RS.10,38,936/- SHOWN IN THE PROFIT AND LOSS ACCOUNT INCLUDE S RS.15,48,000/- DECLARED DURING THE COURSE OF SURVEY. THE PROFIT HAS GONE DOWN BECAUSE OF LESS TURNOVER AND INCREASE IN BANK INTEREST AS WELL AS INCREASE IN MISCELLANEOUS EXPENSES. 9. REFERRING TO DECISION OF THE PUNE SMC BENCH OF THE TRIBUNAL IN THE CASE OF M/S. SUREKH JEWELLERS VS. DCIT VIDE ITA NO.18/PN/2016 ORDER DATED 12-08-2016 HE SUBMITTED THA T THE TRIBUNAL AFTER CONSIDERING VARIOUS DECISIONS HAS HELD THAT INCOME DECLARED DURING THE COURSE OF SURVEY PARTAKES TH E CHARACTER OF BUSINESS INCOME AND THE ASSESSEE IS ENTITLE D TO 6 ITA NO.1575/PN/2016 REMUNERATION AND INTEREST ON CAPITAL AS PER THE PROVISIO NS OF SECTION 40(B) OF THE I.T. ACT. 10. SO FAR AS THE ORDER OF THE CIT(A) THAT THE AMOUNT D ECLARED AT RS.4,50,000/- FOR ADVANCE GIVEN TO PARTNERS AND RS.6,25,000/- PAID AS LABOUR ADVANCE DO NOT FALL IN THE DEFINITION OF BOOK PROFIT FOR THE PURPOSE OF ALLOWING REMUNERATION TO PARTNERS IS CONCERNED, HE SUBMITTED THA T BOTH THESE AMOUNTS HAVE A DIRECT LINK WITH THE BUSINESS OF THE ASSESSEE. HE ACCORDINGLY SUBMITTED THAT SINCE THE ASSE SSEE IN THE INSTANT CASE HAS ALREADY DECLARED AN AMOUNT OF RS.15,48,000/- IN THE TRADING PROFIT AND LOSS ACCOUNT WHICH WAS DECLARED DURING THE COURSE OF SURVEY AND THE ASSE SSEE HAS CORRECTLY CONSIDERED THE REMUNERATION AND INTEREST TO PARTNERS AND THE NET PROFIT DECLARED BY THE ASSESSEE IS AROUND 2 3%, THEREFORE, THE RETURNED INCOME DECLARED BY THE ASSESSEE SHOULD BE ACCEPTED. 11. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER H AND HEAVILY RELIED ON THE ORDER OF THE CIT(A). HE SUBMITTED T HAT THE ADDITIONAL INCOME DECLARED DURING THE COURSE OF SURVEY AT RS.15,48,000/- SHOULD HAVE BEEN SEPARATELY OFFERED TO TAX . SINCE THE INCOME DECLARED BY THE ASSESSEE AT RS.10,38,940 /- IS LESS THAN THE ADDITIONAL INCOME OF RS.15,48,000/- DECLARED DURING THE COURSE OF SURVEY AND SINCE THE ASSESSEE HAS NOT PRODUCED THE BOOKS OF ACCOUNT AND ERRONEOUSLY CLAIMED SALARY AND INTEREST TO PARTNERS ON THEIR CAPITAL FROM THE ADDITIO NAL INCOME SO DECLARED TREATING THE SAME AS BOOK PROFIT AN D SINCE THE PROFIT DECLARED EXCLUDING THE ADDITIONAL INCOME COMES TO A NEGATIVE FIGURE, THEREFORE, THE AO WAS FULLY JUSTIFIED IN 7 ITA NO.1575/PN/2016 ESTIMATING THE NET PROFIT AT 6.42% OF THE CONTRACT RECEIP T AND FURTHER MAKING ADDITION OF RS.15,48,000/- SEPARATELY BEING ADDITIONAL INCOME DECLARED DURING THE COURSE OF SURVEY. HE ACCORDINGLY SUBMITTED THAT THE CIT(A) WAS FULLY JUSTIFIED IN UPHOLDING THE ORDER OF THE AO. 12. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. I HAVE ALSO CONSIDERE D THE VARIOUS DECISIONS CITED BEFORE ME. I FIND THE ASSESSEE IN THE INSTANT CASE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION. DURING THE COURSE OF SURVEY U/S.133A O F THE I.T. ACT, THE ASSESSEE HAD DECLARED ADDITIONAL INCOME OF RS.15,48,000/- OVER AND ABOVE THE REGULAR INCOME FOR THE IMPUGNED ASSESSMENT YEAR. THE ADDITIONAL INCOME OF RS.15,48,000/- WAS DECLARED ON ACCOUNT OF THE FOLLOWING ITEMS: 1. RS.4,73,000/- ON ACCOUNT OF EXCESS CASH FOUND 2. RS.4,50,000/- ON ACCOUNT OF ADVANCES GIVEN TO PARTNER S NOT ACCOUNTED FOR IN THE BOOKS OF ACCOUNT 3. RS.6,25,000/- ON ACCOUNT OF LABOUR ADVANCE 13. I FIND THE ASSESSEE IN THE PROFIT AND LOSS ACCOUNT HA S CREDITED AN AMOUNT OF RS.15,48,000/- AND AFTER CLAIMING SALA RY AND INTEREST TO PARTNERS DECLARED TOTAL INCOME AT RS.10,38,940/-. ACCORDING TO THE AO THE ASSESSEE SHOULD HAVE DECLARED SUCH ADDITIONAL INCOME OF RS.15,48,000/- SEPARATEL Y OVER AND OVER THE BUSINESS INCOME. HOWEVER, SINCE THE N ET PROFIT DECLARED BY THE ASSESSEE EXCLUDING THE ADDITIONAL INC OME OF RS.15,48,000/- WAS A NEGATIVE INCOME AND THE ASSESSEE DID NOT PRODUCE THE BOOKS OF ACCOUNT, HAS CLAIMED SALARY AND 8 ITA NO.1575/PN/2016 INTEREST TO PARTNERS ON CAPITAL AND THE ASSESSEE HAD D ECLARED NET PROFIT @6.42% IN THE PRECEDING ASSESSMENT YEAR, THERE FORE, THE AO REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE A SSESSEE DETERMINED THE NET PROFIT AT 6.42% OF THE CONTRACT RECEIP T AND MADE FURTHER ADDITION OF RS.15,48,000/-. THE AO DID NOT ALLO W THE BENEFIT OF SALARY AND INTEREST TO PARTNERS ON CAPITAL FROM SUCH ADDITIONAL INCOME DECLARED DURING THE COURSE OF SURVE Y ON THE GROUND THAT IT IS NOT A PART OF BOOK PROFIT. I FIND TH E LD.CIT(A) UPHELD THE ACTION OF THE AO. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ADDITIONAL INCO ME OF RS.15,48,000/- HAS BEEN CREDITED TO THE PROFIT AND LOSS ACCOUNT. THE REASON FOR DECLINE IN THE NET PROFIT IS DUE T O DECREASE IN THE TURNOVER, INCREASE IN THE BANK INTEREST ON ACCOUNT OF CASH CREDIT LOAN FOR THE ENTIRE YEAR AS AGAINS T FOR 4 MONTHS IN THE PRECEDING YEAR AND INCREASE IN THE MISCELLANEOUS EXPENSES. IT IS ALSO THE SUBMISSION OF THE LD . COUNSEL FOR THE ASSESSEE THAT THE INCOME DECLARED DURING THE COURSE OF SURVEY PARTAKES THE CHARACTER OF BUSINESS INC OME AND THE ASSESSEE IS ENTITLED TO SALARY AND INTEREST TO P ARTNERS ON CAPITAL OUT OF SUCH BOOK PROFIT. 14. I FIND MERIT IN THE ABOVE ARGUMENT OF THE LD. COUNSEL FO R THE ASSESSEE. A PERUSAL OF THE TRADING, PROFIT AND LOSS A CCOUNT SHOWS THAT THE ASSESSEE HAS CREDITED THE AMOUNT OF RS.6,25,000/- ON ACCOUNT OF LABOUR ADVANCE, THE AMOUNT OF RS.4,73,000/- ON ACCOUNT OF EXCESS CASH FOUND AND THE AMOUNT OF RS.4,50,000/- ON ACCOUNT OF ADVANCE GIVEN TO PARTNERS NOT ACCOUNTED FOR IN THE BOOKS IN THE CREDIT SIDE OF THE PROFIT AND LOSS ACCOUNT WHICH IS THE AMOUNT DECLARED DURIN G 9 ITA NO.1575/PN/2016 THE COURSE OF SURVEY. THEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE HAS NOT DECLARED SUCH ADDITIONAL INCOME IN THE P ROFIT AND LOSS ACCOUNT. FURTHER, THE ASSESSEE HAS GIVEN JUST IFIABLE REASONS FOR DECREASE IN THE NET PROFIT AS COMPARED TO T HE PROFIT DECLARED IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR WH ICH IS DUE TO DECREASE IN THE CONTRACT RECEIPTS, INCREASE IN THE BANK INTEREST FOR THE FULL YEAR AS AGAINST PART OF THE YEAR IN THE PRECEDING YEAR AND INCREASE IN THE MISCELLANEOUS EXPENSE S. AFTER CONSIDERING THE ADDITIONAL INCOME DECLARED DURING THE COURSE OF SURVEY THE PERCENTAGE OF NET PROFIT FOR THE IMP UGNED ASSESSMENT YEAR COMES TO 23.08% AS COMPARED TO 6.42% IN THE PRECEDING ASSESSMENT YEAR. FURTHER, I FIND FORCE IN THE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE IN COME DECLARED DURING THE COURSE OF SURVEY PARTAKES THE CHAR ACTER OF BUSINESS INCOME AND THE ASSESSEE IS ENTITLED TO REMUNERA TION TO PARTNERS U/S.40(B) OF THE I.T. ACT. 15. I FIND THE PUNE SMC BENCH OF THE TRIBUNAL IN THE CASE OF M/S. SUREKH JEWELLERS (SUPRA) AFTER CONSIDERING VARIOUS DECISIONS HAS HELD THAT THE AMOUNT DECLARED BY THE ASSE SSEE DURING THE COURSE OF SURVEY PARTAKES THE CHARACTER OF BUSINESS INCOME AND THE ASSESSEE IS ENTITLED TO REMUNERATION AND INTEREST ON CAPITAL AS PER THE PROVISIONS OF SECTION 40(B) O F THE I.T. ACT. THE RELEVANT OBSERVATION OF THE TRIBUNAL FROM P ARA 13 READS AS UNDER : 13. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BO TH THE SIDES, PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. I HAVE ALSO CONSID ERED THE VARIOUS DECISIONS CITED BEFORE ME. THERE IS NO DISPUT E TO THE FACT THAT THE ASSESSEE, WHICH IS A PARTNERSHIP FIRM ENGAGED I N THE BUSINESS OF MANUFACTURING AND TRADING IN GOLD AND SILVE R ORNAMENTS AND ARTICLES AND DIAMOND JEWELLERY, HAD DEC LARED ADDITIONAL INCOME OF RS.41 LAKHS ON ACCOUNT OF EXCESS ST OCK. I FIND 10 ITA NO.1575/PN/2016 THE ASSESSEE IN THE RETURN OF INCOME WHILE CREDITING TH E AMOUNT OF ADDITIONAL INCOME TO THE PROFIT AND LOSS ACCOUNT, HOW EVER, HAS CLAIMED REMUNERATION TO PARTNERS AND INTEREST ON CAPI TAL AND THEREBY DECLARED THE NET INCOME OF RS.34,70,590/- WH ICH IS LESS THAN THE ADDITIONAL INCOME OF RS.41 LAKHS DECLARED DU RING THE COURSE OF SURVEY. I FIND THE AO HELD THAT THE AMOUNT OF RS.41 LAKHS DECLARED DURING THE COURSE OF SURVEY IS TO BE TREATED AS DEEMED INCOME U/S.69B OF THE I.T. ACT AND THE ASSESSEE IS NOT E NTITLED TO ANY REMUNERATION OR INTEREST AS PER THE PROVISIONS OF SE CTION 40(B) OF THE I.T. ACT. I FIND IN APPEAL THE CIT(A) , FOLLOWING THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF FAKIR MOHAMED HAJI HASAN (SUPRA) AND THE DECISION OF HONB LE CHATTISGARH HIGH COURT IN THE CASE OF DHANUSH GENERAL STORES (SUPRA) HELD THAT INVESTMENT IN EXCESS STOCK FOUND DURI NG THE COURSE OF SURVEY WOULD CONSTITUTE DEEMED INCOME U/S.69B OF THE ACT AND THE ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S.40 (B) OF THE I.T. ACT. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT SUCH EXCESS STOCK FOUND DURING THE COURSE OF SURVEY WHICH WAS OFFERED AS ADDITIONAL INCOME BY THE ASSESSEE CONSTITUT ES BUSINESS INCOME AND THE ASSESSEE IS ENTITLED TO GET DEDUCTI ON TOWARDS REMUNERATION TO PARTNERS AND INTEREST ON CAPI TAL AS PER PROVISIONS OF SECTION 40(B) OF THE I.T. ACT. 14. I FIND SOME FORCE IN THE ABOVE SUBMISSION OF THE LD . COUNSEL FOR THE ASSESSEE. I FIND SIMILAR ISSUE HAD BEEN DE CIDED BY THE PUNE BENCH OF THE TRIBUNAL IN DIFFERENCE CASES. IN THE CASE OF SHRI VENKATESH TEXTILE MILLS (SUPRA) THE ASSESSEE FIRM WA S ENGAGED IN THE BUSINESS OF MANUFACTURING & TRADING OF TEXTILE PRODUCTS. DURING THE COURSE OF SURVEY U/S.133A OF THE ACT ON 22- 02-2007, THE ASSESSEE HAS DECLARED ADDITIONAL INCOME OF RS.50,08,220/- ON ACCOUNT OF (A) UNRECORDED DEBTORS/SA LES OF RS.35,06,600/- AND (B) EXCESS STOCK OF RS.15,01,620/-. T HE ASSESSEE INCLUDED THE AFORESAID DECLARATION IN THE RETUR N OF INCOME FILED FOR THE RELEVANT ASSESSMENT YEAR AND CLAIM ED DEDUCTION U/S.40(B) OF THE ACT AMOUNTING TO RS.9,63,9 20/- ON ACCOUNT OF REMUNERATION PAID TO THE PARTNERS. IT WA S NOTED BY THE AO THAT THE ASSESSEE HAS COMPUTED THE REMUNERATION TO P ARTNERS AFTER CONSIDERING THE ADDITIONAL INCOME OF RS.50,08,2 20/- DECLARED DURING THE SURVEY AS BUSINESS INCOME. THE AO D ISAGREED WITH THE ASSESSEE AND RESTRICTED THE REMUNERATION PAYABL E TO THE PARTNERS AT RS.50,000/- AND THE BALANCE OF RS.9,13,920 /- WAS DISALLOWED. IT WAS ARGUED BEFORE THE CIT(A) THAT THE ADDITIONAL INCOME DECLARED ON ACCOUNT OF EXCESS STOCK AND UNRECOR DED SALES/DEBTORS WAS A BUSINESS INCOME AND THEREFORE THE DISALLOWANCE MADE BY THE AO WAS WRONG. THE CIT(A) UP HELD THE ACTION OF THE AO. ON FURTHER APPEAL, THE TRIBUNAL FOLLOWING THE DECISION OF HONBLE CALCUTTA HIGH COURT IN THE CASE O F MD. SERAJUDDIN AND BROTHERS VS. CIT REPORTED IN (2012) 80 DTR 46 DIRECTED THE AO TO CALCULATE THE ALLOWABLE REMUNERA TION BY ASCERTAINING NOT ONLY THE INCOME FROM BUSINESS BUT ALSO INCOME FROM OTHER SOURCES. THE RELEVANT OBSERVATION OF THE TRIBUNAL FROM PARA 8 ONWARDS READ AS UNDER : 11 ITA NO.1575/PN/2016 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. AT THE OUTSET, IT IS TO BE OBSERVED THAT WHETHER OR NOT ADDI TIONAL INCOME SURRENDERED DURING THE COURSE OF SURVEY IS ASSESSABLE AS IN COME FROM BUSINESS OR NOT IS ESSENTIALLY A QUESTION, WHICH HAS T O BE DECIDED HAVING REGARD TO THE PARTICULAR FACTS AND CI RCUMSTANCES OF EACH CASE. OSTENSIBLY, THERE CANNOT BE AN ABSOLUTE PROP OSITION THAT ANY INCOME SURRENDERED DURING THE SURVEY IS A BUSINESS IN COME OR VICE VERSA. EVEN BEFORE THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF KIM PHARMA (P.) LTD. (SUPRA), ASSESSEE WA S FOUND TO HAVE FAILED TO EXPLAIN THE SOURCE OF THE CASH FOUND D URING THE COURSE OF SURVEY, WHICH WAS OFFERED AS AN ADDITIONAL IN COME; AND, THEREFORE IN THE ABSENCE OF THE NATURE OF SOURCE OF C ASH BEING PROVED IT WAS HELD NOT TO BE ASSESSABLE AS INCOME FROM BU SINESS. WE MAY ALSO REFER TO A JUDGEMENT OF THE HON'BLE KARN ATAKA HIGH COURT IN THE CASE OF CIT VS. S. K. SRIGIRI AND BROS. (2008) 298 ITR 13 (KAR), WHICH HAS BEEN RENDERED IN THE CONTEXT OF SECT ION 40(B)(III) OF THE ACT. IN THE CASE BEFORE THE HON'BL E KARNATAKA HIGH COURT, THE TRIBUNAL HAD COME TO A FACTUAL FINDING T HAT THE ADDITIONAL INCOME DECLARED IN THE COURSE OF SURVEY WA S FROM BUSINESS AND THEREFORE THE REMUNERATION PAID TO THE PA RTNERS WAS HELD LIABLE TO BE DEDUCTED. BE THAT AS IT MAY, WE MA Y NOW EXAMINE THE FACTS OF THE PRESENT CASE, QUA THE ADDITIONAL INC OME OF RS.15,01,620/- DECLARED BY THE ASSESSEE AS 'EXCESS STOCK'. 9. AS ALREADY NOTED EARLIER THE DISCREPANCY IN STOCK P OSITION WAS ACCEPTED BY THE ASSESSEE IN THE COURSE OF SURVEY AND SUCH AMOUNT WAS OFFERED AS ADDITIONAL INCOME FOR THE ASSESSMENT YEAR 2007-08. IN THE DEPOSITION OF THE ASSESSEE, ACCEPTING THE SAID DISC REPANCY THERE IS NO EXPLANATION AS TO THE MANNER IN WHICH THE INCOME REPRESENTED BY THE AFORESAID STOCK WAS EARNED BY THE ASSE SSEE. IN AN ANSWER TO QUESTION NO.22, ASSESSEE WAS EXPLAINING THE R OUNDED AND UNROUNDED AMOUNTS FOUND NOTED IN THE COMPUTERIZE D PRINT- OUT OF THE SALES REGISTER. WHILE THE UNROUNDED AMOUNTS WERE DECLARED AS UNRECORDED DEBTORS/SALES, THE ROUNDED AMOUN TS WERE EXPLAINED TO BE SALE AMOUNTS WHICH HAVE BEEN RECEIVED IN CASH. IN THIS CONTEXT, ASSESSEE'S PARTNER SPECIFICALLY CONTENDED T HAT THE 'ROUNDED AMOUNTS ........ WHICH ARE RECEIVED IN CASH ARE AGAIN INVESTED IN STOCK OF RESPECTIVE BUSINESS'. IT WAS FURTHER DEPOSED THAT SUCH AMOUNT OF CASH RECEIVED IS INCLUDED IN THE E XCESS STOCK DECLARED EARLIER. IN THIS MANNER, THE PARTNER OF THE ASSESSEE EXPLAINED THAT SUCH AMOUNT OF CASH WAS INCLUDED IN THE STOCK DECLARATION. THIS EXPLANATION OF THE ASSESSEE MADE IN TH E COURSE OF STATEMENT RECORDED DURING THE COURSE OF SURVEY HAS REMA INED UN- REBUTTED BY THE REVENUE. THE AMOUNT OF CASH SO RECEIV ED QUA THE ASSESSEE FIRM IS STATED TO BE RS.3,50,000/- AS PER THE DETA ILS CONTAINED IN THE ANSWER TO QUESTION NO.22 OF THE STATE MENT. IN OUR CONSIDERED OPINION, OUT OF THE EXCESS STOCK OF RS.15,01, 620/- DECLARED BY THE ASSESSEE, TO THE EXTENT OF RS.3,50,000/- IT CAN BE CONSIDERED TO HAVE BEEN FUNDED BY WAY OF BUSINESS PROFI TS, WHICH WAS HITHERTO UNDECLARED. THEREFORE, AN AMOUNT OF RS.3 ,50,000/- CONTAINED IN THE EXCESS STOCK DECLARATION OF RS.15,01, 620/- CAN BE SAID TO BE ASSESSABLE AS INCOME FROM BUSINESS. FOR BALANCE O F THE AMOUNT OF EXCESS STOCK, ASSESSEE HAS NOT DEMONSTRATED ON TH E BASIS OF EVIDENCE, THE SOURCE FROM WHERE SUCH INVESTMEN T HAS BEEN MADE AND THEREFORE IT CANNOT BE ASSESSED AS INCOME FROM BUSINESS. THE PLEA OF THE ASSESSEE THAT IT HAS NO OTHER SOUR CE OF INCOME AND THEREFORE THE SOURCE OF EXCESS STOCK HAS TO B E 12 ITA NO.1575/PN/2016 CONSIDERED FROM BUSINESS, IS ONLY A PRESUMPTION, WHICH CA NNOT TAKE THE PLACE OF EVIDENCE. 10. IN THIS BACKGROUND, NOW WE MAY ADDRESS THE CONTROV ERSY AS TO WHETHER THE ADDITIONAL INCOME OF RS.50,08,220/- IS EL IGIBLE FOR THE PURPOSES OF COMPUTING THE PARTNERS' REMUNERATION. IN SO FAR AS THE INCOME OFFERED AT THE TIME OF SURVEY WHICH HAS BEEN F OUND TO BE ASSESSABLE AS 'INCOME FROM BUSINESS' IS CONCERNED, THERE IS N O DISPUTE THAT IT FORMS A PART OF THE PROFIT FOR THE PU RPOSES OF COMPUTING THE REMUNERATION OF THE PARTNERS. IN SO FAR AS THE ADDITIONAL INCOME DECLARED WHICH IS NOT FOUND TO BE ASSESSABLE AS 'INCOME FROM BUSINESS', THE STAND OF THE REVENUE IS THAT THE SAME CANNOT QUALIFY FOR THE PURPOSES OF SECTION 40(B) OF TH E ACT. IN THIS CONTEXT, WE HAVE NOTICED THAT THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF MD. SERAJUDDIN & BROTHERS VS. CIT, (2012) 80 DTR 46 (CAL.) HAS CONSIDERED A SIMILAR CONTROVERSY. ACCORDING TO THE HON'BLE HIGH COURT, FOR THE PURPOSE OF COMPUTATION O F ALLOWABLE REMUNERATION TO PARTNERS, BOOK-PROFIT HAS TO BE ASCERT AINED NOT ONLY FROM INCOME OF BUSINESS ALONE BUT ALSO INCOME FROM OTHER SOURCES. AS PER THE HON'BLE HIGH COURT IN CALCULATING THE ALLOWABLE REMUNERATION, PROFIT MEANS PROFIT AS PER THE PROFIT & LOSS ACCOUNT. THE FOLLOWING DISCUSSION IN THE ORDER OF THE HON'BLE H IGH COURT IS WORTHY OF NOTICE :- 'THE SAID CHAPTER NOWHERE PROVIDES THAT METHOD OF ACCOUNTING FOR THE PURPOSE OF ASCERTAINING NET PROFIT SHOULD BE THE ONLY INCOME FROM BUSINESS ALONE AND NOT FROM OT HER SOURCES. SECTION 29 PROVIDES HOW THE INCOME FROM PROFI TS AND GAINS OF BUSINESS OR PROFESSION SHOULD BE COMPUTED AND THIS HAS TO BE DONE AS PROVIDED UNDER SECTION 30 TO 43D. BY VIRTUE OF SECTION 5 OF THE SAID ACT TH AT TOTAL INCOMES OF ANY PREVIOUS YEARS INCLUDES ALL INCOME FROM WHATEVER SOURCE DERIVED. THUS FOR THE PURPOSE OF SECTI ON 40(B)(V) READ WITH EXPLANATION THERE CANNOT BE SEPAR ATE METHOD OF ACCOUNTING FOR ASCERTAINING NET PROFIT AND /OR BOOK-PROFIT. THE SAID SECTION NOWHERE PROVIDES AS RIGH TLY POINTED BY MR. KHAITAN, LEARNED SENIOR ADVOCATE THA T THE NET PROFIT AS SHOWN IN THE PROFIT AND LOSS ACCOUNT NOT THE PROFIT COMPUTED UNDER THE HEAD PROFIT AND GAINS OF BUSINESS OR PROFESSION. THE DECISION OF THE SUPREME COURT IN THE CASE OF APOL LO TYRES LTD. V. COMMISSIONER OF INCOME TAX REPORTED IN (2002) 255 ITR 273 (SC) IS AN APPROPRIATE GUIDANCE O F THIS POINT AS TO WHAT SHOULD BE DONE IN ORDER TO ASCERTAIN THE NET PROFIT IN CASE OF THIS NATURE. AT PAGE 280 IN THE FIRST PARAGRAPH OF THE REPORT THE SUPREME COURT OBSERVED A S FOLLOWS:- 'SUB-SECTION (1A) OF SECTION 115J DOES NOT EMPOWER THE ASSESSING OFFICER TO EMBARK UPON A FRESH INQUIRY IN REGA RD TO THE ENTRIES MADE IN THE BOOKS OF ACCOUNT OF THE C OMPANY. THE SAID SUB-SECTION, AS A MATTER OF FACT, MANDATES THE COMPANY TO MAINTAIN ITS ACCOUNT IN ACCORDANCE WITH T HE REQUIREMENTS OF THE COMPANIES ACT WHICH MANDATE, ACCORDING TO US, IS BODILY LIFTED FROM THE COMPANIES A CT INTO THE INCOME-TAX ACT FOR THE LIMITED PURPOSE OF MAKING THE 13 ITA NO.1575/PN/2016 SAID ACCOUNT SO MAINTAINED AS A BASIS FOR COMPUTING THE COMPANY'S INCOME FOR LEVY OF INCOME-TAX. BEYOND THAT , WE DO NOT THINK THAT THE SAID SUB-SECTION EMPOWERS THE AUTHORITY UNDER THE INCOME-TAX ACT TO PROBE INTO TH E ACCOUNTS ACCEPTED BY THE AUTHORITIES UNDER THE COMPAN IES ACT. IF THE STATUTE MANDATES THAT INCOME PREPARED IN ACCORDANCE WITH THE COMPANIES ACT SHALL BE DEEMED INCOME FOR THE PURPOSE OF SECTION 115J OF THE ACT TH EN IT SHOULD BE THAT INCOME WHICH IS ACCEPTABLE TO THE AUTHORITIES UNDER THE COMPANIES ACT. THERE CANNOT BE TWO INCOMES ONE FOR THE PURPOSE OF THE COMPANIES ACT AND ANOTHER FOR THE PURPOSE OF INCOME-TAX BOTH MAINTAINE D UNDER THE SAME ACT. IF THE LEGISLATURE INTENDED THE ASSESSING OFFICER TO REASSESS THE COMPANY'S INCOME, THEN IT WOULD HAVE STATED IN SECTION 115J THAT 'INCOME OF THE COMPANY AS ACCEPTED BY THE ASSESSING OFFICER'. IN THE ABSENCE OF THE SAME AND ON THE LANGUAGE OF SECTION 115 J, IT WILL HAVE TO HELD THAT VIEW TAKEN BY THE TRIBUNAL I S CORRECT AND THE HIGH COURT HAS ERRED IN REVERSING THE SAID VIE W OF THE TRIBUNAL.' AT PAGE 282 OF THE SAID REPORT THE SUPREME COURT HAS ALSO OBSERVED AMONGST: OTHER- 'THE FACT THAT IT IS SHOWN UNDER A DIFFERENT HEAD OF INCOME WOULD NOT DEPRIVE THE COMPANY OF ITS BENEFIT UNDER SE CTION 32AB SO LONG AS IT IS HELD THAT THE INVESTMENT IN THE U NITS OF THE UTI BY THE ASSESSEE-COMPANY IS IN THE COURSE OF ITS 'ELIGIBLE BUSINESS'. THEREFORE, IN OUR OPINION, THE DI VIDEND INCOME EARNED BY THE ASSESSEE-COMPANY FROM ITS INVESTMENT IN THE UTI SHOULD BE INCLUDED IN COMPUTING THE PROFITS OF ELIGIBLE BUSINESS UNDER SECTION 32AB OF THE A CT.' THUS IT EMERGES AS FOLLOWS: EVEN IF THE INCOME FROM OTHER SOURCES IS INCLUDED IN T HE PROFIT AND LOSS ACCOUNTS TO ASCERTAIN THE NET PROFIT QU A BOOK-PROFIT FOR COMPUTATION OF THE REMUNERATION OF THE PARTNERS THE SAME CANNOT BE DISCARDED.' 11. FOLLOWING THE AFORESAID JUDGEMENT OF THE HON'BLE CALCUTTA HIGH COURT AND IN THE ABSENCE OF ANY CONTRARY DECISION, WE DIRECT THE ASSESSING OFFICER TO CALCULATE THE ALLOWABLE REMUNERATI ON BY ASCERTAINING NOT ONLY INCOME FROM BUSINESS BUT ALSO INCO ME FROM OTHER SOURCES. 15. SIMILARLY, THE AHMEDABAD BENCH OF THE TRIBUNAL HAS ALSO AN OCCASION TO DECIDE SUCH AN ISSUE BY DISTINGUISHING THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF FAKIR M OHAMED HAJI HASAN (SUPRA) WHICH HAS BEEN RELIED ON BY THE CIT(A). IN THAT CASE ALSO THE ASSESSEE WAS DEALING IN READYMADE GARMENTS. A SURVEY U/S.133A WAS CARRIED OUT AT THE BUSINESS PREMISES O F THE ASSESSEE ON 15-02-2002. DURING THE COURSE OF SURVEY CER TAIN DISCREPANCIES IN THE STOCK AND DOCUMENTS WERE FOUND AND THE STATEMENT OF THE PARTNER WAS RECORDED ON THAT DATE. WHILE THE STOCK AS PER BOOKS WAS RS.9,87,718/- THE PHYSICAL VERI FICATION OF THE STOCK WAS VALUED AT RS.25,14,306/-. SUBSEQUENTLY, T HE STOCK AS 14 ITA NO.1575/PN/2016 PER BOOKS WERE RE-WORKED AFTER APPLYING GP MARGIN OF 28.5% AND FINALLY THE DIFFERENCE BETWEEN THE STOCK AS PER BOOKS AND THE PHYSICAL VERIFICATION WAS DETERMINED AT RS.8,10,011/-. FURTHER, UNACCOUNTED INVESTMENT IN FURNITURE AND FIXTURES AND AIR CONDITIONERS TO THE TUNE OF RS.1,97,250/- WAS FOUND. THUS, THE TOTAL UNDISCLOSED INVESTMENT OF RS.10,06,250/- WAS FOUN D DURING THE COURSE OF SURVEY. THE ASSESSEE IN THE RETURN OF INCO ME FILED DECLARED TOTAL INCOME OF RS.5,58,670/- AND THERE WAS NO INDEPENDENT DECLARATION OF ANY UNDISCLOSED INVESTMENT FOUND DURING THE COURSE OF SURVEY. THE AO REJECTING THE E XPLANATION GIVEN BY THE ASSESSEE MADE ADDITION OF RS.10,06,250/- SEP ARATELY U/S.69 OF THE I.T. ACT AND DID NOT ALLOW REMUNERATIO N TO PARTNERS FROM SUCH AMOUNT. THE CIT(A) UPHELD THE ACTION OF T HE AO AND HELD THAT DEEMED INCOME U/S.69 DOES NOT NEED ANY HEAD OF INCOME AND CANNOT BE SET OFF AGAINST BUSINESS LOSS. ON F URTHER APPEAL, THE TRIBUNAL HELD THAT THE AMOUNT OF RS.8,10 ,011/- BEING DIFFERENCE IN STOCK IS REPRESENTED BY UNDECLARED BUSINE SS INCOME. IT DOES NOT HAVE A SEPARATE PHYSICAL IDENTITY AND HAS T O BE TAXED UNDER THE HEAD BUSINESS INCOME AND THE ASSESSEE IS ENTI TLED TO REMUNERATION TO PARTNERS U/S.40(B) OF THE I.T. ACT FR OM SUCH INCOME. THE RELEVANT OBSERVATION OF THE TRIBUNAL FR OM PARA 9 ONWARDS READ AS UNDER : 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN OUR CONSIDERED VIEW THERE IS SOME MISUNDERSTANDING ABOUT THE INTERPRETATION OF DECISION OF HON. GUJARAT HIGH COURT IN THE CASE OF FAKIR MOHMED HAJI HASAN VS. CIT (SUPRA). FOR THE SAKE OF CONVENIENCE WE REPRODUCE THE HEAD NOTES FROM THAT DECISION AS UNDER :- 'THE SCHEME OF SECTIONS 69, 69A, 69B AND 69C OF THE IN COME-TAX ACT, 1961, WOULD SHOW THAT IN CASES WHERE THE NATURE A ND SOURCE OF INVESTMENTS MADE BY THE ASSESSEE OR THE NATURE AND SOUR CE OF ACQUISITION OF MONEY, BULLION, ETC., OWNED BY THE ASSE SSEE OR THE SOURCE OF EXPENDITURE INCURRED BY THE ASSESSEE ARE NOT E XPLAINED AT ALL, OR NOT SATISFACTORILY EXPLAINED, THEN, THE VA LUE OF SUCH INVESTMENTS AND MONEY OR VALUE OF ARTICLES NOT RECORDE D IN THE BOOKS OF ACCOUNT OR THE UNEXPLAINED EXPENDITURE MAY BE DEEMED TO BE THE INCOME OF SUCH ASSESSEE. IT FOLLOWS THAT THE M OMENT A SATISFACTORY EXPLANATION IS GIVEN ABOUT SUCH NATURE AND SOURCE BY THE ASSESSEE, THEN THE SOURCE WOULD STAND DISCLOSED AND WIL L, THEREFORE, BE KNOWN AND THE INCOME WOULD BE TREATED UNDER THE APPROPRIATE HEAD OF INCOME FOR ASSESSMENT AS PER THE PRO VISIONS OF THE ACT. WHEN THE INCOME CANNOT BE SO CLASSIFIED U NDER ANY ONE OF THE HEADS OF INCOME UNDER SECTION 14, IT FOLLOWS TH AT THE QUESTION OF GIVING ANY DEDUCTIONS UNDER THE PROVISIONS WHICH CORRESPOND TO SUCH HEADS OF INCOME WILL NOT ARISE. THE PROVISIONS OF SECTIONS 69, 69A, 69B AND 69C, TREAT UNEXPLAINED I NVESTMENTS, UNEXPLAINED MONEY, BULLION, ETC., AND UNEXPLAINED E XPENDITURE AS DEEMED INCOME WHERE THE NATURE AND SOURCE OF INVESTME NT, ACQUISITION OR EXPENDITURE, AS THE CASE MAY BE, HAVE N OT BEEN EXPLAINED OR SATISFACTORILY EXPLAINED. THEREFORE, IN THESE CASES, THE SOURCE NOT BEING KNOWN, SUCH DEEMED INCOME WILL NOT F ALL EVEN UNDER THE HEAD 'INCOME FROM OTHER SOURCES'. THEREFORE , THE CORRESPONDING DEDUCTIONS WHICH ARE APPLICABLE TO THE INCOMES UNDER ANY OF THESE VARIOUS HEADS, WILL NOT BE ATTRACTE D IN THE CASE OF DEEMED INCOMES WHICH ARE COVERED UNDER THE PROVISI ONS 15 ITA NO.1575/PN/2016 OF SECTIONS 69, 69A, 69B AND 69C OF THE ACT IN VIEW O F THE SCHEME OF THOSE PROVISIONS : HELD,_ ON THE FACTS, THAT IT WAS CLEAR THAT WHEN THE INVESTMENT IN OR ACQUISITION OF GOLD, WHICH WAS RECOVERED FROM THE ASSESSE E WAS NOT RECORDED IN THE BOOKS OF ACCOUNT AND THE ASSESSEE OF FERED NO EXPLANATION ABOUT THE NATURE AND SOURCE OF SUCH INVEST MENT OR ACQUISITION AND THE VALUE OF SUCH GOLD WAS NOT RECORDE D IN THE BOOKS OF ACCOUNT, NOR THE NATURE AND SOURCE OF ITS ACQ UISITION EXPLAINED, THERE COULD ARISE NO QUESTION OF TREATING THE VALUE OF SUCH GOLD, WHICH WAS DEEMED TO BE THE INCOME OF THE A SSESSEE, AS A DEDUCTIBLE TRADING LOSS ON ITS CONFISCATION, BECAUSE SUC H DEEMED INCOME DID NOT FALL UNDER THE HEAD OF INCOME 'PROFI TS AND GAINS OF BUSINESS OR PROFESSION'. THEREFORE, THE TRIBUNAL WAS PERF ECTLY RIGHT IN HOLDING THAT THE VALUE OF THE GOLD WAS LIAB LE TO BE INCLUDED IN THE INCOME OF THE ASSESSEE AS THE SOURCE OF INVESTMENT IN THE GOLD OR OF ITS ACQUISITION WAS NOT EXPLAINED AND THAT THE ASSESSEE WAS NOT ENTITLED TO CLAIM THAT THE VALUE OF THE GOLD SHOULD BE ALLOWED AS A DEDUCTION FROM HIS INCOME.' IF WE CLOSELY EXAMINE ABOVE JUDGMENT WE FIND THAT FO R INVOKING PROVISIONS OF SECTIONS 69, 69A,69B & 69C TWO CONDITION S ARE REQUIRED TO BE SATISFIED. THEY ARE (I) INVESTMENT/EXP ENDITURE ARE NOT RECORDED IN THE BOOKS OF ACCOUNT OF ASSESSEE & (II) THE NATURE AND SOURCE OF ACQUISITION OF ASSETS OR EXPENDITURE ARE NOT EXPLAINED OR NOT EXPLAINED SATISFACTORILY THE EXPRESSIO N 'NATURE AND SOURCE' USED IN THIS SECTION SHOULD BE UNDERSTOOD TO MEAN REQUIREMENT OF IDENTIFICATION OF SOURCE AND ITS GENUI NENESS. TO EXPLAIN 'NATURE' IT WOULD REQUIRE THE ASSESSEE TO EXPLA IN WHAT IS DESCRIPTION OF INVESTMENT OR EXPENDITURE, PERIOD AND THE MANNER IN WHICH IT WAS DONE. TO EXPLAIN THE SOURCE IT WOULD REQUIRE THE ASSESSEE TO EXPLAIN THE CORPUS OR FUND FROM WHERE INVESTM ENT OR EXPENDITURE HAS BEEN MET AND ALSO THE HEAD UNDER WHIC H THE INVESTMENT OR EXPENDITURE WOULD FALL SUCH AS WHETHER INVESTMENT/EXPENDITURE PERTAINS TO BUSINESS OR RELATES TO ACQUISITION OF CAPITAL ASSET OR TO OTHER SOURCE OR TO A GRICULTURE. WHERE THE ASSESSEE IS ABLE TO EXPLAIN NATURE AND SOURCE O F INVESTMENT/EXPENDITURE AND ALSO IF THEY ARE RECORDED IN THE BOOKS OF ACCOUNT THEN SUCH INVESTMENT/EXPENDITURE WILL NOT BE TREATED AS DEEMED INCOME BUT WHERE INVESTMENT /EXPENDITURE IS NOT RECORDED IN THE BOOKS OF ACCOUNT AND/OR THEIR NATURE AND SOURCE IS NOT EXPLAINED OR NOT SATISFACTORY EXPLAINED, DEEMING PROVISION UNDER THESE FOUR SECTIONS CAN BE INVOKED BY THE AO AND INVESTMENT/EXPENDITURE WOULD BE TREATED AS DEEMED INC OME OF THE ASSESSEE. THUS FOR INVOKING THESE DEEMING SECTIONS FIRS T CONDITION HAS TO BE NECESSARILY SATISFIED THAT THEY ARE NOT RECORDED IN THE BOOKS OF ACCOUNT REGULARLY MAINTAINED BY THE ASSESSEE. BUT FOR ESTABLISHING NEXUS OF SUCH INVESTMENT/EXPENDITURE WI TH A HEAD OF INCOME AND TO TAKE THE BENEFIT OF SET OFF, ASSESSEE H AS TO NECESSARILY EXPLAIN THE NATURE AND SOURCE OF SUCH INVESTMENT/EXPENDITURE AND ESTABLISH ITS NEXUS WITH ANY HEAD OF INCOME. HON. GUJARAT HIGH COURT FURTHER HELD THAT F OR CLAIMING TRADING LOSS IN RESPECT OF AN ASSET WHOSE INVESTMENT WAS FO UND UNEXPLAINED, IT WAS NECESSARY FOR THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF ITS ACQUISITION AND ON ITS FAILUR E TO DO SO THE TRADING LOSS ON THE CONFISCATION OF THE ASSET COULD NOT BE SET OFF. 16 ITA NO.1575/PN/2016 10. WE NOTICE THAT THE SET OFF OF ANY TRADING LOSS AGA INST DEEMED INCOME ASSESSED UNDER SECTIONS 69, 69A, 69B & 69C IS NOT D IRECTLY DISCERNIBLE FROM SECTIONS 72 TO 79 FALLING IN CHAPTER- VI. TO SUMMARILY REFER TO THESE PROVISIONS WE NOTE THAT IN CHA PTER VI, SECTION 70 PROVIDES SET OFF OF LOSS FROM ONE SOURCE AGAINST INCOME FROM ANOTHER SOURCE UNDER THE SAME HEAD OF IN COME. IN OTHER WORDS, IF UNDER THE HEAD 'BUSINESS' THERE ARE TWO BUSINESSES -ONE IS RESULTING IN INCOME AND THE OTHER IS RESULTING IN LOSS, THEY ARE TO BE SET OFF AGAINST EACH OTHER. SIMILARLY, IF T HERE IS A LOSS UNDER THE HEAD CAPITAL GAINS IN RESPECT OF SHORT-TERM CAPITAL GAINS AND THERE IS INCOME IN RESPECT OF OTHER CAPITAL ASSETS T HEN THAT CAN BE SET OFF AS PER SECTION 70. SECTION 71 PROVIDES SET OF F OF LOSS FROM ONE HEAD AGAINST INCOME FROM ANOTHER HEAD. THUS WHER E THERE IS A LOSS UNDER ONE HEAD BEING LOSS OTHER THAN LOSS UNDER THE HEAD CAPITAL GAINS THEN IT CAN BE SET OFF AGAINST ANY INCOM E ASSESSABLE UNDER ANOTHER HEAD. SECTION 71A AND SECTION 71B PROV IDE FOR CARRY FORWARD OF SET OFF OF LOSS FROM HOUSE PROPERTY. SECTION 72 PROVIDES FOR CARRY FORWARD OF BUSINESS LOSS. ACCORDING TO THIS SECTION IF LOSS UNDER THE HEAD BUSINESS, OTHER THAN SPECUL ATION LOSS, CANNOT BE SET OFF AGAINST INCOME UNDER ANY OTHER HEAD IN ACCORDANCE WITH SECTION 71, THEN IT HAS TO BE CARRIED FORWARD TO THE FOLLOWING ASST. YEARS. SECTION 72A PROVIDES PROVISIO NS OF CARRY FORWARD AND ACCUMULATED LOSS AND UNABSORBED DEPRECIAT ION ALLOWANCE IN AMALGAMATION OR DEMERGER. SIMILARLY SEC TION 72AA PROVIDES SUCH SET OFF AND CARRY FORWARD IN THE CASE OF BANKING COMPANY AND SEC.72AB PROVIDES SET OFF IN THE CASE OF CO -OP. BANKS. SECTION 73 PROVIDES FOR TREATMENT OF LOSS IN SPEC ULATION BUSINESS. SECTION 74 PROVIDES FOR TREATMENT OF LOSS UNDER THE HEAD CAPITAL GAINS AND SECTION 74A PROVIDES FOR TREATMENT T O LOSS ARISING FROM SOURCES UNDER THE HEAD 'INCOME FROM OTHER SOURCES' . SECTION 75PROVIDES FOR LOSSES IN CASE OF FIRM AND SECTION 78 IN RESPECT OF CARRY FORWARD AND SET OFF OF LOSS IN CASE OF CHANGE IN CONSTITUTION OF THE FIRM AND SECTION 79 PROVIDES FOR CARRY FORWARD AN D SET OFF OF LOSS IN THE CASES OF CERTAIN COMPANIES. THUS TREATMENT O F LOSS ARISING UNDER THE HEAD BUSINESS IS PROVIDED ONLY UNDER SE CTION 72 WHICH DIRECTS TO CARRY FORWARD THE UNABSORBED LOSS T O THE NEXT YEAR UNLESS IT IS OTHERWISE PROVIDED IN ANY OTHER SECTIO N OF CHAPTER -VI. WE HAVE GONE THROUGH ALL THE SECTIONS UN DER CHAPTER - VI AND WE DO NOT FIND ANY PROVISION FOR SETTING OFF O F BUSINESS LOSS AGAINST DEEMED INCOME UNDER SECTIONS 69, 69A, 69B & 69 C. 11. BUT THIS DOES NOT MEAN THAT LOSS COMPUTED UNDER ANY OF THE FIVE HEADS MENTIONED IN SECTION 14- (I) 'SALARY', (II) 'INCOME FROM HOUSE PROPERTY', (III) 'PROFITS AND GAINS FROM BUSINESS O R PROFESSION', (IV) 'CAPITAL GAINS' AND (V) 'INCOME FROM OTHER SOURCES' - CANNOT AT ALL BE ADJUSTED AGAINST UNEXPLAINED INVEST MENT OR EXPENDITURE. WHAT IS NECESSARY AS PER HON. GUJARAT HIGH COURT IS THAT SOURCE OF ACQUISITION OF ASSET OR EXPENDITURE SHOUL D BE CLEARLY IDENTIFIABLE. IN THE CASE BEFORE HON. GUJARAT HIGH COURT THE SOURCE OF GOLD CONFISCATED WAS NOT IDENTIFIABLE AND HENCE A DJUSTMENT WAS NOT PERMITTED. 12. THUS THE IMPORTANT ASPECT THAT EMERGES FROM THE EN TIRE DISCUSSION IS THAT FOR INVOKING DEEMING PROVISIONS UNDER SECTIONS 69, 69A, 69B & 69C THERE SHOULD BE CLEARLY IDENTIFIA BLE ASSET OR EXPENDITURE. IN THE PRESENT CASE WE FIND THAT ENTIRE PHYSICAL STOCK OF RS.25,14,306/- WAS PART OF THE SAME BUSINESS. BOTH KI ND OF 17 ITA NO.1575/PN/2016 STOCK I.E. WHAT IS RECORDED IN THE BOOKS AND WHAT WAS FOUND OVER AND ABOVE THE STOCK RECORDED IN THE BOOKS, WERE HELD AND DEALT UNIFORMLY BY THE ASSESSEE. THERE WAS NO PHYSICAL DISTINCTI ON BETWEEN THE ACCOUNTED STOCK OR UNACCOUNTED STOCK. NO SUCH PHYSICAL DISTINCTION WAS FOUND BY THE REVENUE EITHER. THE ASSESSEE HAS REPEATEDLY CLAIMED THAT UNACCOUNTED BUSINESS INCOME IS INVESTED IN STOCK AND THERE IS NO AMOUNT SEPARATELY TAX ABLE UNDER SECTION 69. THE DEPARTMENT HAS IGNORED THIS CLAI M OF THE ASSESSEE AND SOUGHT TO TAX THE DIFFERENCE BETWEEN BOOK-ST OCK AND PHYSICAL-STOCK AS UNACCOUNTED INVESTMENT UNDER SECTION 69WITHOUT CONSIDERING THE CLAIM OF THE ASSESSEE THAT FI RST THE BUSINESS RECEIPT HAS TO BE CONSIDERED AND THEN INVESTMENT SHOULD BE TREATED AS COMING OUT OF SUCH UNACCOUNTED INCOME. THE DIFFERENCE IN STOCK SO WORKED OUT BY THE AUTHORITIES BELOW HAD NO INDEPENDENT IDENTITY OF ITS OWN AND IT IS PART AND PA RCEL OF ENTIRE LOT OF STOCK. THE DIFFERENCE BETWEEN DECLARED STOCK I N THE BOOKS AND WHAT IS PHYSICALLY FOUND WOULD ONLY BE A MATHEMAT ICAL EXPRESSION IN TERMS OF VALUE AND NOT A SEPARATE INDEPEN DENT IDENTIFIABLE ASSET. THEREFORE, IT CANNOT BE SAID THAT THERE IS AN UNDISCLOSED ASSET EXISTED INDEPENDENTLY. ONCE THIS IS SO TH EN WHAT IS NOT DECLARED TO THE DEPARTMENT IS RECEIPT FROM BU SINESS AND NOT ANY INVESTMENT AS IT CANNOT BE CO-RELATED WITH ANY SPE CIFIC ASSET. 13. THUS IN A CASE WHERE SOURCE OF INVESTMENT/EXPENDITU RE IS CLEARLY IDENTIFIABLE AND ALLEGED UNDISCLOSED ASSET HAS NO INDEPENDENT EXISTENCE OF ITS OWN OR THERE IS NO SEPARA TE PHYSICAL IDENTITY OF SUCH INVESTMENT/EXPENDITURE THEN FIRST WHA T IS TO BE TAXED IS THE UNDISCLOSED BUSINESS RECEIPT INVESTED IN UNI DENTIFIABLE UNACCOUNTED ASSET AND ONLY ON FAILURE IT SHOULD BE CON SIDERED TO BE TAXED UNDER SECTION 69 ON THE PREMISES THAT SUCH EX CESS INVESTMENT IS NOT RECORDED IN THE BOOKS OF ACCOUNT AN D ITS NATURE AND SOURCE IS NOT IDENTIFIABLE. ONCE SUCH EXCESS INVESTME NT IS TAXED AS UNDECLARED BUSINESS RECEIPT THEN TAXING IT FUR THER AS DEEMED INCOME UNDER SECTION 69 WOULD NOT BE NECESSARY. THEREFORE, THE FIRST ATTEMPT OF THE ASSESSING AUTHORITY SHOULD BE TO FIND OUT LINK OF UNDECLARED INVESTMENT/EXPENDITURE W ITH THE KNOWN HEAD, GIVE OPPORTUNITY TO THE ASSESSEE TO ESTABLISH NEXUS AND IF IT IS SATISFACTORILY ESTABLISHED THEN FIRST SUCH I NVESTMENT SHOULD BE CONSIDERED AS UNDECLARED RECEIPT UNDER THAT PARTICULAR HEAD. IT IS ONLY WHERE NO NEXUS IS ESTABLISHED WITH ANY HEAD THEN IT SHOULD BE CONSIDERED AS DEEMED INCOME UNDER SECTION 69, 69A,69B & 69C AS THE CASE MAY BE. IT IS BECAUSE WHE N ASSESSEE FAILS TO EXPLAIN SATISFACTORILY THE SOURCE OF SUCH INVE STMENT THEN IT SHOULD BE TAXED UNDER SECTION 69, 69A, 69B & 69C AS TH E CASE MAY BE. IT SHOULD NOT BE DONE AT THE FIRST INSTANCE WITHOU T GIVING OPPORTUNITY TO THE ASSESSEE TO ESTABLISH NEXUS. THEREFORE, THERE IS NO CONFLICT WITH THE DECISION OF HON. GUJARAT HIGH C OURT IN THE CASE OF FAKIR MOHMED HAJI HASAN (SUPRA) WHERE INVESTMENT IN AN ASSET OR EXPENDITURE IS NOT IDENTIFIABLE AND NO NEXUS WAS EST ABLISHED THEN WITH ANY HEAD OF INCOME AND THUS WAS NOT AVAILAB LE FOR SET OFF AGAINST ANY LOSS UNDER ANY OTHER HEAD. THEREFORE, WE H OLD THAT WHERE ASSET IN WHICH UNDECLARED INVESTMENT IS SOUGHT TO BE TAXED IS NOT CLEARLY IDENTIFIABLE OR DOES NOT HAVE INDEPEN DENT IDENTITY BUT IS INTEGRAL AND INSEPARABLE (MIXED) PART OF DECLA RED ASSET, FALLING UNDER A PARTICULAR HEAD, THEN THE DIFFERENC E SHOULD BE TREATED AS UNDECLARED BUSINESS INCOME EXPLAINING THE IN VESTMENT. 18 ITA NO.1575/PN/2016 14. TO CONCLUDE SUM OF RS.8,10,011/- BEING DIFFERENCE IN STOCK IS REPRESENTED BY UNDECLARED BUSINESS INCOME. IT DOES NOT H AVE A SEPARATE PHYSICAL IDENTITY. IT IS TO BE ONLY TAXED UND ER THE HEAD 'BUSINESS'. OTHER ASSETS HAVE SEPARATE PHYSICAL IDENTITY BE ING FURNITURE AND FIXTURES, AIR CONDITIONERS ETC. THEY CA NNOT HAVE A DIRECT NEXUS WITH BUSINESS AND THEREFORE INVESTMENT THER EIN HAS TO BE CONSIDERED UNDER SECTION 69 ONLY. 15. IN VIEW OF THE ABOVE, AO IS DIRECTED TO CONSIDER THE SUM OF RS.8,10,011/- AS UNDISCLOSED BUSINESS INCOME ASSESSABLE UNDER THE HEAD 'BUSINESS' AND OTHER TWO SUMS UNDER SECTION 69. THE BUSINESS INCOME INCLUDING APPLICATION OF SECTION 40(B) HAS TO BE CONSIDERED ACCORDINGLY. FOR CALCULATION OF INCOME IN VIEW OF OUR ABOVE OBSER VATIONS, WE RESTORE THE MATTER TO THE FILE OF AO. 16. SIMILAR VIEW HAS BEEN TAKEN BY THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF M/S. PROTOVIT FOOD PRODUCTS (S UPRA) WHEREIN THE TRIBUNAL FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF MANNALAL PANNAL AL SETHIA (SUPRA) HAS HELD THAT ASSESSEE IS ENTITLED TO SALARY OR REMUNERATION TO PARTNERS U/S.40(B) OF THE I.T. ACT IN RESPECT OF INCOME DECLARED DURING THE COURSE OF SURVEY. 17. NO DOUBT THERE IS A CONTRARY DECISION BY THE HON BLE CHATTISGARH HIGH COURT IN THE CASE OF DHANUSH GENERAL STORES VS. CIT (SUPRA) WHEREIN EXCESS STOCK OFFERED DURING THE CO URSE OF SURVEY WAS HELD TO BE INCOME UNDER THE DEEMING PROVISI ONS OF SECTION 69B AND NOT BUSINESS INCOME. SINCE THERE ARE C ONTRARY DECISIONS, I.E. DECISION IN FAVOUR OF THE ASSESSEE BY THE HONBLE KOLKATA HIGH COURT AND AGAINST THE ASSESSEE BY THE DECISI ON OF HONBLE GUJARAT HIGH COURT AND HONBLE CHATTISGARH H IGH COURT AND SINCE THERE IS NO DECISION OF THE HONBLE JURISDICT IONAL HIGH COURT BROUGHT TO OUR NOTICE BY EITHER SIDE, THEREFOR E, FOLLOWING THE RATIO OF THE DECISION OF HONBLE SUPREME COURT IN TH E CASE OF CIT VS. VEGETABLE PRODUCTS REPORTED IN 88 ITR 192 I HOLD THAT THE DECISION, WHICH IS IN FAVOUR OF THE ASSESSEE, HAS TO BE FO LLOWED. 18. IN THE LIGHT OF THE ABOVE DISCUSSION, I HOLD THAT THE AMOUNT OF RS.41 LAKHS DECLARED BY THE ASSESSEE DURING THE COURSE OF SURVEY PARTAKES THE CHARACTER OF BUSINESS INCOME AND THE ASSESSEE IS ENTITLED TO REMUNERATION AND INTEREST ON CAP ITAL AS PER THE PROVISIONS OF SECTION 40(B) OF THE I.T. ACT ON SUCH INCOME. I HOLD AND DIRECT ACCORDINGLY. THE ADDITIONAL GROUND AS WELL AS THE GROUND RAISED BY THE ASSESSEE ARE ACCORDINGLY DECIDED I N FAVOUR OF THE ASSESSEE. 16. IN VIEW OF THE DECISION OF THE TRIBUNAL CITED (SUPRA) I HO LD THAT THE ASSESSEE IS ENTITLED TO REMUNERATION TO PARTNE RS ON CAPITAL U/S.40(B) OF THE I.T. ACT. SINCE THE ASSESSEE HA S CREDITED AN AMOUNT OF RS.15,48,000/- DURING THE COURSE OF 19 ITA NO.1575/PN/2016 SURVEY AND SINCE THE NET PROFIT AFTER SUCH DECLARATION AT 23% IS MUCH MORE THAN THE NET PROFIT OF 6.42% IN THE PRECEDIN G ASSESSMENT YEAR, THEREFORE, I AM OF THE CONSIDERED VIEW T HAT THERE IS NO NECESSITY ON THE PART OF THE AO TO ESTIMATE THE INCOME AND MAKE FURTHER ADDITION OF RS.15,48,000/- AND REJE CT THE CLAIM OF REMUNERATION TO PARTNERS. IN VIEW OF THE ABO VE DISCUSSION, I SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE AO TO ACCEPT THE INCOME RETURNED BY THE ASSESSEE AT RS.10,38,940/-. GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED. 17. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21-10-2016 SD/- ( R.K. PANDA ) ACCOUNTANT MEMBER PUNE ; DATED : 21 ST OCTOBER, 2016. '# $# / COPY OF THE ORDER FORWARDED TO : / BY ORDER , // $ % / TRUE COPY // // TRUE COPY // &' % * / SR. PRIVATE SECRETARY *, / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT (A) - 7 , PUNE 4. THE CIT- 7 , PUNE 5. $ %%* , * , SMC BENCH / DR, ITAT, SMC BENCH PUNE; 6. 2 / GUARD FILE.