Shri VENKATESH TEXTILE MILLS, Sangli V. Jt. CIT, Sangli

ITA 2268/PUN/2012

• Counselvise Citation: 226824514 RSA 2012
• Duration Of Justice: 2 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 12-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Business income; Deemed to accrue or arise in india
• Section: 143(3); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.2268/PN/2012 (ASSESSMENT YEAR 2007-08) SHRI VENKATESH TEXTILE MILLS, 205, BUDHWAR PETH, MADHAVNAGAR, DIST.- SANGLI. PAN : AAUFS2383L . APPELLANT VS. JOINT COMMISSIONER OF INCOME TAX, RANGE-2, SANGLI. . RESPONDENT ASSESSEE BY : MR. KISHOR PHADKE DEPARTMENT BY : MR. RAJESH DAMOR DATE OF HEARING : 10-10-2014 DATE OF PRONOUNCEMENT : 28-11-2014 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AG AINST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), KOLHAPUR DATED 10.09.2012 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 11.1 2.2009 PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT), PERTAINING TO THE ASSESSMENT YEAR 2007-08. 2. IN THIS APPEAL, ASSESSEE HAS RAISED THE FOLLOWIN G GROUNDS OF APPEAL :- 1. LEARNED CIT(A) HAS ERRED IN FACT & IN LAW IN DI SALLOWING THE REMUNERATION TO PARTNERS OF RS.9,13,920/-. A) WITHOUT CONSIDERING THE JURISDICTIONAL TRIBUNAL DECISIONS. B) WITHOUT ANY EVIDENCE AGAINST THE APPELLANT ABOUT EARNING OF INCOME FROM OTHER SOURCES. C) WITHOUT APPRECIATING THAT EXCESS INCOME DECLARED DU RING SURVEY IS INCOME FROM BUSINESS OF THE FIRM & THERE IS NO OTHE R SOURCE OF INCOME TO THE FIRM & THERE IS NO EVIDENCE CONTRARY TO THESE FACTS & EXCESS INCOME DECLARED IS FORMING PART OF BOOKS PRO FIT ENTITLED FOR REMUNERATION. 3. BRIEFLY PUT, THE RELEVANT FACTS ARE AS FOLLOWS. THE APPELLANT IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF MANUFAC TURE AND TRADING OF TEXTILE ITA NO.2268/PN/2012 PRODUCTS. IN THE COURSE OF A SURVEY ACTION U/S 133 A OF THE ACT CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSEE ON 22.02.2007 , THE APPELLANT HAD DECLARED ADDITIONAL INCOME OF RS.50,08,220/-. THE ADDITIONAL INCOME SO DECLARED WAS COMPRISING OF TWO COMPONENTS, NAMELY, (I) UNRECORDED DEBTORS/SALES RS.35,06,600/-; AND, (II) EXCESS ST OCK OF RS.15,01,620/-. THE AFORESAID DECLARATION WAS ALSO INCLUDED IN THE RETU RN OF INCOME FILED FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. IN THE ASSESS MENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT ASSESSEE HAD CLAIMED D EDUCTION U/S 40(B) OF THE ACT OF RS.9,63,920/- ON ACCOUNT OF REMUNERATION PAI D TO THE PARTNERS. IT WAS FOUND THAT THE REMUNERATION TO PARTNERS CALCULATED AT RS.9,63,920/- WAS AFTER CONSIDERING THE ADDITIONAL INCOME OF RS.50,08,220/- DECLARED DURING THE SURVEY AS BUSINESS INCOME. THE ASSESSING OFFICER DISAGREED WITH THE ASSESSEE AND RESTRICTED THE REMUNERATION PAYABLE TO THE PARTNERS AT RS.50,000/- AND THE BALANCE OF RS.9,13,920/- WAS DI SALLOWED. IN APPEAL BEFORE THE CIT(A), ASSESSEE CONTENDED THAT THE ADDI TIONAL INCOME DECLARED ON ACCOUNT OF EXCESS STOCK AND UNRECORDED SALES/DEBTOR S WAS A BUSINESS INCOME AND THEREFORE THE DISALLOWANCE MADE BY THE ASSESSING OFFICER WAS WRONG. THE CIT(A) HAS DISAGREED WITH THE ASSESSEE AND UPHELD THE ACTION OF THE ASSESSING OFFICER. AGAINST THE AFORESAID DECIS ION OF THE CIT(A), ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. BEFORE US, THE APPELLANT HAS FURNISHED A PAPER B OOK WHICH, INTER-ALIA, CONTAINS COPY OF THE STATEMENT RECORDED OF ONE OF T HE PARTNERS OF THE ASSESSEE FIRM DURING THE COURSE OF SURVEY U/S 133A OF THE ACT ON 22.02.2007. THE SAID STATEMENT IS SIGNIFICANT AS IT CONTAINS TH E DEPOSITION OF THE ASSESSEE OFFERING THE ADDITIONAL INCOME AND ALSO THE MANNER IN WHICH IT WAS OFFERED. FIRST, WE SHALL REFER TO THE ADDITIONAL INCOME OFFE RED BY THE ASSESSEE ON ACCOUNT OF UNRECORDED DEBTORS OF RS.35,06,600/-. I N THIS CONTEXT, QUESTION NOS. 20 TO 23 ARE RELEVANT. IT TRANSPIRES THAT DUR ING THE COURSE OF SURVEY CERTAIN COMPUTERIZED PRINT-OUTS PERTAINING TO THE A SSESSEE WERE FOUND, WHICH ITA NO.2268/PN/2012 WAS IDENTIFIED AS A SALES REGISTER. THE PRINT-OUTS WERE EXPLAINED TO BE CONTAINING THE DETAILS OF THE RECEIVABLE AMOUNT I.E . SUNDRY DEBTORS. SOME OF THE ITEMS WERE ROUNDED, WHICH WERE EXPLAINED BY THE ASSESSEE AS AMOUNTS RECEIVED IN CASH AND THE BALANCE OF THE UNROUNDED I TEMS REPRESENTED AMOUNTS WHICH WERE STILL RECEIVABLE AGAINST THE SAL ES MADE. THE TOTAL UNROUNDED ITEMS AMOUNTED TO RS.35,06,600/-, WHICH W AS EXPLAINED AS OUTSTANDING SUNDRY DEBTORS AGAINST THE SALES MADE A ND IT WAS ADMITTED THAT THE AFORESAID SALES WERE NOT RECORDED IN THE REGULA R BOOKS OF ACCOUNT. ACCORDINGLY, SUCH ADDITIONAL INCOME WAS DECLARED AN D IT IS FURTHER EXPLAINED BY THE ASSESSEE THAT THE AMOUNT OF RS.35,06,600/- W AS CREDITED TO THE PROFIT & LOSS ACCOUNT AS SALES. 5. THE AFORESAID FACTUAL MATRIX IS UNDISPUTED AND I N OUR CONSIDERED OPINION SUCH AMOUNT IS LIABLE TO BE TREATED AS BUS INESS INCOME OF THE ASSESSEE. IN-FACT, IN THE IMPUGNED ORDER OF THE CI T(A), THOUGH THERE IS AN ELABORATE DISCUSSION WITH REGARD TO THE ADDITIONAL INCOME ON ACCOUNT OF EXCESS STOCK, BUT THERE IS NO REASONING ADVANCED AS TO WHY HE HAS REJECTED ASSESSEES PLEA THAT RS.35,06,600/- IS TO BE TREATE D AS BUSINESS INCOME. BE THAT AS IT MAY, WHEN THE MATERIAL FOUND IN THE COUR SE OF SURVEY ITSELF REFLECTS THAT THE AMOUNT OF RS.35,06,600/- REPRESENTED SALES , ITS NATURE THEREOF HAS TO BE ACCEPTED AS BUSINESS INCOME. 6. NOW, WE MAY COME TO THE OTHER LIMB OF ADDITIONAL INCOME DECLARED BY THE ASSESSEE OF RS.15,01,620/- REPRESENTING EXCESS STOCK. IN THIS CONTEXT, QUESTION NOS. 16, 17, 18 AND 22 OF THE SURVEY STATE MENT SHOW THAT THE SURVEY PARTY PHYSICALLY COUNTED THE INVENTORY LYING AT VAR IOUS PLACES AND PREPARED INVENTORY VALUATION AS PER THE MARKET VALUE OF ALL THE GOODS. ON THIS BASIS, STOCK POSITION WAS ARRIVED AT, WHICH WAS AGREED TO BY THE ASSESSEE. IN AN ANSWER TO QUESTION NO.16, THE PARTNER OF THE ASSESS EE FIRM CONFIRMED THAT THE PHYSICAL VERIFICATION WAS CARRIED OUT IN THE PRESEN CE OF THE ASSESSEE AND ALSO ITA NO.2268/PN/2012 THAT METHOD USED FOR VALUATION WAS ACCEPTABLE TO TH E ASSESSEE-FIRM. THE INVENTORY VALUATION SO PREPARED WAS COMPARED WITH T HE TENTATIVE TRADING ACCOUNT OF THE ASSESSEE WHICH REVEALED A DIFFERENCE OF RS.15,01,620/-. IN AN ANSWER TO QUESTION NO.18, WITH RESPECT TO THE SAID DISCREPANCY, THE PARTNER OF THE ASSESSEE FIRM ACCEPTED THE SAME AND DECLARED SU CH DIFFERENCE AS ADDITIONAL INCOME OF THE ASSESSEE FIRM FOR THE ASSE SSMENT YEAR UNDER CONSIDERATION. THE NATURE OF SUCH ADDITIONAL INCOM E HAS NOT BEEN ACCEPTED BY THE ASSESSING OFFICER AS WELL AS BY THE CIT(A) A S AN INCOME DERIVED FROM THE BUSINESS OF THE ASSESSEE. THE CIT(A) HAS CONCL UDED THAT THE EXCESS STOCK DID NOT REPRESENT BUSINESS PROFITS OF THE ASS ESSEE, BUT AS PER HIM, IT REPRESENTED AN UNEXPLAINED INVESTMENT IN BUSINESS. ASSESSEE IS IN APPEAL BEFORE US CONTESTING THE AFORESAID STAND OF THE LOW ER AUTHORITIES. THE LD. REPRESENTATIVE FOR THE ASSESSEE HAS SUBMITTED THAT EXCESS INCOME DECLARED DURING THE COURSE OF SURVEY IS NOTHING BUT INCOME F ROM BUSINESS OF THE ASSESSEE FIRM AS THERE IS NO OTHER SOURCE OF INCOME OF THE ASSESSEE FIRM. IT HAS ALSO BEEN CONTENDED THAT THERE IS NO EVIDENCE F OUND TO THE CONTRARY SO AS TO HOLD THAT SUCH EXCESS INCOME WAS NOT A BUSINESS INCOME OF THE ASSESSEE. 7. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESEN TATIVE APPEARING FOR THE REVENUE HAS RELIED UPON THE ORDERS OF THE AUTHO RITIES BELOW TO OPPOSE THE PLEA OF THE ASSESSEE. THE LD. DEPARTMENTAL REPRESE NTATIVE HAS SUBMITTED THAT THE ONUS WAS ON THE ASSESSEE TO ESTABLISH THAT THE INCOME REPRESENTED BY THE EXCESS STOCK IN QUESTION WAS DERIVED FROM BUSIN ESS AND IN THE PRESENT CASE IT HAS NOT BEEN DEMONSTRATED AND THEREFORE THE LOWER AUTHORITIES WERE JUSTIFIED IN NOT TREATING THE AFORESAID INCOME AS A BUSINESS INCOME. IN THE COURSE OF THE HEARING, THE LD. DEPARTMENTAL REPRESE NTATIVE HAS ALSO RELIED UPON THE JUDGEMENT OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF KIM PHARMA (P.) LTD. VS. CIT, (2013) 35 TAXMANN. COM 456 (PUNJAB & HARYANA). ITA NO.2268/PN/2012 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. AT THE OUTSET, IT IS TO BE OBSERVED THAT WHETHER OR NOT ADDITIONAL INCOM E SURRENDERED DURING THE COURSE OF SURVEY IS ASSESSABLE AS INCOME FROM BUSIN ESS OR NOT IS ESSENTIALLY A QUESTION, WHICH HAS TO BE DECIDED HAVING REGARD TO THE PARTICULAR FACTS AND CIRCUMSTANCES OF EACH CASE. OSTENSIBLY, THERE CANN OT BE AN ABSOLUTE PROPOSITION THAT ANY INCOME SURRENDERED DURING THE SURVEY IS A BUSINESS INCOME OR VICE VERSA. EVEN BEFORE THE HONBLE PUNJ AB & HARYANA HIGH COURT IN THE CASE OF KIM PHARMA (P.) LTD. (SUPRA), ASSESS EE WAS FOUND TO HAVE FAILED TO EXPLAIN THE SOURCE OF THE CASH FOUND DURI NG THE COURSE OF SURVEY, WHICH WAS OFFERED AS AN ADDITIONAL INCOME; AND, THE REFORE IN THE ABSENCE OF THE NATURE OF SOURCE OF CASH BEING PROVED IT WAS HE LD NOT TO BE ASSESSABLE AS INCOME FROM BUSINESS. WE MAY ALSO REFER TO A JUDGE MENT OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. S. K. S RIGIRI AND BROS. (2008) 298 ITR 13 (KAR), WHICH HAS BEEN RENDERED IN THE CONTEX T OF SECTION 40(B)(III) OF THE ACT. IN THE CASE BEFORE THE HONBLE KARNATAKA HIGH COURT, THE TRIBUNAL HAD COME TO A FACTUAL FINDING THAT THE ADDITIONAL INCOM E DECLARED IN THE COURSE OF SURVEY WAS FROM BUSINESS AND THEREFORE THE REMUNERA TION PAID TO THE PARTNERS WAS HELD LIABLE TO BE DEDUCTED. BE THAT AS IT MAY, WE MAY NOW EXAMINE THE FACTS OF THE PRESENT CASE, QUA THE ADDITIONAL INCOM E OF RS.15,01,620/- DECLARED BY THE ASSESSEE AS EXCESS STOCK. 9. AS ALREADY NOTED EARLIER THE DISCREPANCY IN STOC K POSITION WAS ACCEPTED BY THE ASSESSEE IN THE COURSE OF SURVEY AND SUCH AM OUNT WAS OFFERED AS ADDITIONAL INCOME FOR THE ASSESSMENT YEAR 2007-08. IN THE DEPOSITION OF THE ASSESSEE, ACCEPTING THE SAID DISCREPANCY THERE IS N O EXPLANATION AS TO THE MANNER IN WHICH THE INCOME REPRESENTED BY THE AFORE SAID STOCK WAS EARNED BY THE ASSESSEE. IN AN ANSWER TO QUESTION NO.22, A SSESSEE WAS EXPLAINING THE ROUNDED AND UNROUNDED AMOUNTS FOUND NOTED IN TH E COMPUTERIZED PRINT- OUT OF THE SALES REGISTER. WHILE THE UNROUNDED AMO UNTS WERE DECLARED AS UNRECORDED DEBTORS/SALES, THE ROUNDED AMOUNTS WERE EXPLAINED TO BE SALE ITA NO.2268/PN/2012 AMOUNTS WHICH HAVE BEEN RECEIVED IN CASH. IN THIS CONTEXT, ASSESSEES PARTNER SPECIFICALLY CONTENDED THAT THE ROUNDED AMOUNTS .. WHICH ARE RECEIVED IN CASH ARE AGAIN INVESTED IN STOCK OF RES PECTIVE BUSINESS . IT WAS FURTHER DEPOSED THAT SUCH AMOUNT OF CASH RECEIVED I S INCLUDED IN THE EXCESS STOCK DECLARED EARLIER. IN THIS MANNER, THE PARTNE R OF THE ASSESSEE EXPLAINED THAT SUCH AMOUNT OF CASH WAS INCLUDED IN THE STOCK DECLARATION. THIS EXPLANATION OF THE ASSESSEE MADE IN THE COURSE OF S TATEMENT RECORDED DURING THE COURSE OF SURVEY HAS REMAINED UN-REBUTTED BY TH E REVENUE. THE AMOUNT OF CASH SO RECEIVED QUA THE ASSESSEE FIRM IS STATED TO BE RS.3,50,000/- AS PER THE DETAILS CONTAINED IN THE ANSWER TO QUESTION NO. 22 OF THE STATEMENT. IN OUR CONSIDERED OPINION, OUT OF THE EXCESS STOCK OF RS.1 5,01,620/- DECLARED BY THE ASSESSEE, TO THE EXTENT OF RS.3,50,000/- IT CAN BE CONSIDERED TO HAVE BEEN FUNDED BY WAY OF BUSINESS PROFITS, WHICH WAS HITHER TO 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 INCO ME FROM BUSINESS. FOR BALANCE OF THE AMOUNT OF EXCESS STOCK, ASSESSEE HAS NOT DEMONSTRATED ON THE BASIS OF EVIDENCE, THE SOURCE FROM WHERE SUCH INVES TMENT HAS BEEN MADE AND THEREFORE IT CANNOT BE ASSESSED AS INCOME FROM BUSINESS. THE PLEA OF THE ASSESSEE THAT IT HAS NO OTHER SOURCE OF INCOME AND THEREFORE THE SOURCE OF EXCESS STOCK HAS TO BE CONSIDERED FROM BUSINESS, IS ONLY A PRESUMPTION, WHICH CANNOT TAKE THE PLACE OF EVIDENCE. 10. IN THIS BACKGROUND, NOW WE MAY ADDRESS THE CONT ROVERSY AS TO WHETHER THE ADDITIONAL INCOME OF RS.50,08,220/- IS ELIGIBLE FOR THE PURPOSES OF COMPUTING THE PARTNERS REMUNERATION. IN SO FAR AS THE INCOME OFFERED AT THE TIME OF SURVEY WHICH HAS BEEN FOUND TO BE ASSESSABL E AS INCOME FROM BUSINESS IS CONCERNED, THERE IS NO DISPUTE THAT IT FORMS A PART OF THE PROFIT FOR THE PURPOSES OF COMPUTING THE REMUNERATION OF THE P ARTNERS. 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 TH E SAME CANNOT QUALIFY FOR ITA NO.2268/PN/2012 THE PURPOSES OF SECTION 40(B) OF THE ACT. IN THIS CONTEXT, WE HAVE NOTICED THAT THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF MD. SERAJUDDIN & BROTHERS VS. CIT, (2012) 80 DTR 46 (CAL.) HAS CONSIDERED A SIMIL AR CONTROVERSY. ACCORDING TO THE HONBLE HIGH COURT, FOR THE PURPOSE OF COMPU TATION OF ALLOWABLE REMUNERATION TO PARTNERS, BOOK-PROFIT HAS TO BE ASC ERTAINED NOT ONLY FROM INCOME OF BUSINESS ALONE BUT ALSO INCOME FROM OTHER SOURCES. AS PER THE HONBLE HIGH COURT IN CALCULATING THE ALLOWABLE REM UNERATION, PROFIT MEANS PROFIT AS PER THE PROFIT & LOSS ACCOUNT. THE FOLLO WING DISCUSSION IN THE ORDER OF THE HONBLE HIGH COURT IS WORTHY OF NOTICE :- THE SAID CHAPTER NOWHERE PROVIDES THAT METHOD OF A CCOUNTING FOR THE PURPOSE OF ASCERTAINING NET PROFIT SHOULD BE THE ON LY INCOME FROM BUSINESS ALONE AND NOT FROM OTHER SOURCES. SECTION 29 PROVID ES HOW THE INCOME FROM PROFITS 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 THAT TOTAL INCOMES OF ANY PREVIOUS YEARS I NCLUDES ALL INCOME FROM WHATEVER SOURCE DERIVED. THUS FOR THE PURPOSE OF SE CTION 40(B)(V) READ WITH EXPLANATION THERE CANNOT BE SEPARATE METHOD OF ACCO UNTING FOR ASCERTAINING NET PROFIT AND/OR BOOK-PROFIT. THE SAID SECTION NOW HERE PROVIDES AS RIGHTLY POINTED BY MR. KHAITAN, LEARNED SENIOR ADVOCATE THA T THE NET PROFIT AS SHOWN IN THE PROFIT AND LOSS ACCOUNT NOT THE PROFIT COMPU TED UNDER THE HEAD PROFIT AND GAINS OF BUSINESS OR PROFESSION. THE DECISION OF THE SUPREME COURT IN THE CASE OF AP OLLO TYRES LTD. V. COMMISSIONER OF INCOME TAX REPORTED IN (2002) 255 I TR 273 (SC) IS AN APPROPRIATE GUIDANCE OF THIS POINT AS TO WHAT SHOUL D 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 AS FOLLOWS:- 'SUB-SECTION (1A) OF SECTION 115J DOES NOT EMPOWER THE ASSESSING OFFICER TO EMBARK UPON A FRESH INQUIRY IN REGARD TO THE ENTRIE S MADE IN THE BOOKS OF ACCOUNT OF THE COMPANY. THE SAID SUB-SECTION, AS A MATTER OF FACT, MANDATES THE COMPANY TO MAINTAIN ITS ACCOUNT IN ACCORDANCE W ITH THE REQUIREMENTS OF THE COMPANIES ACT WHICH MANDATE, ACCORDING TO US, I S BODILY LIFTED FROM THE COMPANIES ACT INTO THE INCOME-TAX ACT FOR THE LIMIT ED PURPOSE OF MAKING THE SAID ACCOUNT SO MAINTAINED AS A BASIS FOR COMPUTING THE COMPANY'S INCOME FOR LEVY OF INCOME-TAX. BEYOND THAT, WE DO NOT THIN K THAT THE SAID SUB-SECTION EMPOWERS THE AUTHORITY UNDER THE INCOME-TAX ACT TO PROBE INTO THE ACCOUNTS ACCEPTED BY THE AUTHORITIES UNDER THE COMPANIES ACT . IF THE STATUTE MANDATES THAT INCOME PREPARED IN ACCORDANCE WITH THE COMPANI ES ACT SHALL BE DEEMED INCOME FOR THE PURPOSE OF SECTION 115J OF THE ACT T HEN 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 CO MPANIES ACT AND ANOTHER FOR THE PURPOSE OF INCOME-TAX BOTH MAINTAINED UNDER THE SAME ACT. IF THE LEGISLATURE INTENDED THE ASSESSING OFFICER TO REASS ESS THE COMPANY'S INCOME, THEN IT WOULD HAVE STATED IN SECTION 115J THAT 'INC OME OF THE COMPANY AS ACCEPTED BY THE ASSESSING OFFICER'. IN THE ABSENCE OF THE SAME AND ON THE LANGUAGE OF SECTION 115J, IT WILL HAVE TO HELD THAT VIEW TAKEN BY THE TRIBUNAL IS ITA NO.2268/PN/2012 CORRECT AND THE HIGH COURT HAS ERRED IN REVERSING T HE SAID VIEW OF THE TRIBUNAL.' AT PAGE 282 OF THE SAID REPORT THE SUPREME COURT HA S ALSO OBSERVED AMONGST: OTHER- 'THE FACT THAT IT IS SHOWN UNDER A DIFFERENT HEAD O F INCOME WOULD NOT DEPRIVE THE COMPANY OF ITS BENEFIT UNDER SECTION 32AB SO LO NG AS IT IS HELD THAT THE INVESTMENT IN THE UNITS OF THE UTI BY THE ASSESSEE- COMPANY IS IN THE COURSE OF ITS 'ELIGIBLE BUSINESS'. THEREFORE, IN OUR OPINION, THE DIVIDEND INCOME EARNED BY THE ASSESSEE-COMPANY FROM ITS INVESTMENT IN THE UTI SHOULD BE INCLUDED IN COMPUTING THE PROFITS OF ELIGIBLE BUSINESS UNDER SE CTION 32AB OF THE ACT.' THUS IT EMERGES AS FOLLOWS: EVEN IF THE INCOME FROM OTHER SOURCES IS INCLUDED I N THE PROFIT AND LOSS ACCOUNTS TO ASCERTAIN THE NET PROFIT QUA BOOK-PROFI T FOR COMPUTATION OF THE REMUNERATION OF THE PARTNERS THE SAME CANNOT BE DIS CARDED. 11. FOLLOWING THE AFORESAID JUDGEMENT OF THE HONBL E CALCUTTA HIGH COURT AND IN THE ABSENCE OF ANY CONTRARY DECISION, WE DIR ECT THE ASSESSING OFFICER TO CALCULATE THE ALLOWABLE REMUNERATION BY ASCERTAININ G NOT ONLY INCOME FROM BUSINESS BUT ALSO INCOME FROM OTHER SOURCES. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D, AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH NOVEMBER, 2014. SD/- SD/- (SUSHMA CHOWLA) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 28 TH NOVEMBER, 2014. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A), KOLHAPUR; 4) THE CIT, KOLHAPUR; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE