The DCIT, Circle-2, Surat V. New Umiya Vijay Saw MIll, Surat

ITA 2447/AHD/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76887 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 13-06-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 02-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P JHANGID
• Keywords: Unexplained expenditure; Business income; Income from undisclosed sources; Deemed to accrue or arise in india
• Section: 69C; 133A; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SRI D.K TYAGI, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT M EMBER DY. COMMISSIONER OF INCOME-TAX, CIRCLE-2, ROOM NO. 110, 1 ST FLOOR, AAYAKAR BHAVAN, MAJURAGATE, SURAT-395001 (APPELLANT) VS NEW U MIYA VIJAY SAW MILL, NR. ADARSH CHEMICALS, NAVASARI ROAD, UDHNA, SURAT- 394210 PAN: AACFN8831E (RESPONDENT) REVENUE BY: SRI J.P. JHANGID, SR.D.R. ASSESSEE BY: SRI TUSHAR HEMANI, A.R. DATE OF HEARING : 13-06-2014 DATE OF PRONOUNCEMENT : 30-06-20 14 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER:- THIS IS THE REVENUES APPEAL AGAINST THE ORDER OF LD. CIT(A)-II, SURAT DATED 16-08-2012. ITA NO. 2447/AHD/2012 ASSESSMENT YEAR 2009-10 I.T.A NO. 2447/AHD/2012 A.Y. 2009-10 PAGE NO DCIT VS. NEW UMIYA VIJAY SAW MILL 2 2. THE REVENUE HAS TAKEN FOLLOWING GROUNDS OF APPEA L:- 1. ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE ON A CCOUNT OF REMUNERATION PAID TO PARTNERS WITHOUT APPRECIATING THE FACT THAT THE DISCLOSURE HAS BEEN MADE IN RESPECT OF FIRM AND NOT IN THE HANDS OF PARTNERS AND THE DISCLOSURE SHOULD BE TAXED IN THE HANDS OF THE FIRM ONLY. 2. ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN TREATING THE AMOUNT OF RS.36,03 ,000/- AS INCOME FROM BUSINESS, AGAINST THE A.O. TREATMENT OF THIS A MOUNT AS 'INCOME FROM OTHER SOURCES', WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE FAILED TO EXPLAIN THE SOURCE OF JOB WORK AS IT COUL D NOT PRODUCE DETAILS REGARDING THE UNACCOUNTED JOB WORK RECEIPTS . 3. ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.18, 01,5007- MADE ON ACCOUNT OF UNEXPLAINED EXPENDITURE U/S 69 C, AS THE FACT THAT THE ASSESSEE HAS NOT CLAIMED ANY EXPENDITURE FOR EARNIN G SUCH JOB WORK RECEIPT HAS BEEN IGNORED. 4. ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.3,9 3,537/- MADE ON ACCOUNT OF BUSINESS & PROFESSION WITHOUT APPRECIATI NG THE FACT THAT THE NET INCOME RETURNED BY THE ASSESSEE IS LESS THA N THE DISCLOSURE AMOUNT AND THE ADDITION WAS MADE TOTALLY IN CONSIST ENT WITH THE DISCLOSURES MADE DURING THE COURSE OF SURVEY. 3. GROUND NO. 1 & 2 RELATES TO DISALLOWANCE OF THE CLAIM OF PARTNERS SALARY AMOUNTING TO RS. 13 LACS U/S. 40(B) AGAINST THE INCOME DISCLOSED DURING THE SURVEY. 4. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A P ARTNERSHIP-FIRM ENGAGED IN TRADING AND SAWING OF WOODS. A SURVEY A CTION U/S. 133A WAS CARRIED OUT ON 24-03-2000 AND ON CONSEQUENT TO THE SURVEY ASSESSEE MADE A DISCLOSURE OF RS. 39,96,537/- ON ACCOUNT OF EXCESS CASH AND I.T.A NO. 2447/AHD/2012 A.Y. 2009-10 PAGE NO DCIT VS. NEW UMIYA VIJAY SAW MILL 3 UNACCOUNTED STOCK AND ALSO UNACCOUNTED NET JOT WOR K INCOME, THE DETAILS OF WHICH ARE AS UNDER: EXCESS CASH : RS. 1,48,063/- UNACCOUNTED STOCK : RS. 2,45,474/- UNACCOUNTED RECEIPT OF JOB WORK : RS. 36,03,000/- ----------------------------- TOTAL : RS. 39,96,537/- THIS DISCLOSURE WAS REFLECTED IN THE COMPUTATION OF INCOME FILED ALONG WITH THE RETURN, AGAINST WHICH ASSESSEE CLAIMED REMUNERA TION OF PARTNERS AT RS. 13 LACS AND NET PROFIT OF RS. 24,52,906/- WAS O FFERED FOR TAXATION. AO HOWEVER DISALLOWED THIS REMUNERATION OF RS. 13 LACS TO PARTNERS AFTER TREATING SUM OF RS. 3,93,537/- (I.E. CASH RS. 1,48, 063/- + STOCK RS. 2,45,474) AS INCOME FROM BUSINESS AND PROFESSION AND RS. 36,03,000/- AS INCOME FROM OTHER SOURCES ON THE GROUND THAT S OURCE OF INCOME DISLSCOSED DURING SURVEY REMAINS UNDISCLOSED AND HE NCE IT WOULD BE TREATED UNDER THE HEAD INCOME FROM OTHER SOURCES AND NOT UNDER THE HEAD INCOME FORM BUSINESS AND PROFESSION. WHILE DOING SO, AO RELIED ON THE DECISION OF HONBLE ITAT AHMEDABAD BENCH IN THE CASE OF M/S. WHITELINE CHEMICAL AND ON THE DECISION OF HONBLE G UJARAT HIGH COURT IN THE CASE OF FAKIR MOHAMMED VS. CIT AND CONCLUDED TH AT THE DISCLOSURE MADE BY ASSESSEE BEING DEEMED INCOME, IT WILL BE CO VERED UNDER THE HEAD INCOME FROM OTHER SOURCES AND CORRESPONDING DEDUCTIONS WHICH WERE APPLICABLE TO THE INCOME FROM BUSINESS AND PR OFESSION WILL NOT BE ALLOWED. HE THEREFORE DISALLOWED THE CLAIM OF PART NERS SALARY AMOUNTING TO RS. 13 LACS U/S. 40(B) AGAINST THE INCOME DISCLOSED DURING THE SURVEY. I.T.A NO. 2447/AHD/2012 A.Y. 2009-10 PAGE NO DCIT VS. NEW UMIYA VIJAY SAW MILL 4 5. AGGRIEVED BY THIS ORDER OF AO ASSESSEE WENT IN A PPEAL BEFORE THE LD. CIT(A). 6. THE SUBMISSION OF THE ASSESSEE BEFORE CIT(A) WAS THAT AO HIMSELF HAS NOTED IN THE ASSESSMENT ORDER THAT DISCLOSURE A T THE TIME OF SURVEY WAS FROM BUSINESS ACTIVITIES OF TRADING AND SAWING OF WOODS AND THE SAME WAS ADDITIONAL BUSINESS INCOME OVER AND ABOVE REGUL AR BUSINESS INCOME HENCE THE SAME WAS DULY ELIGIBLE FOR ALLOWANCES LIK E INTEREST AND REMUNERATION PAID TO THE PARTNERS. IT WAS FURTHER SUBMITTED THAT THE DISCLOSED INCOME HAD ALSO BEEN INCLUDED IN THE PROF IT AND LOSS ACCOUNT AND COMPUTATION OF INCOME AS BUSINESS INCOME FOR THE YE AR UNDER APPEAL AS IT PERTAINED TO THE INCOME FROM BUSINESS WHICH WAS THE ONLY SOURCE OF INCOME OF THE ASESSEE AND THE SAME HAS TO BE DULY C ONSIDERED WHILE WORKING THE REMUNERATION ALLOWABLE U/S. 40(B) OF TH E ACT. THE RELIANCE WAS PLACED BY THE ASSESSEE ON SEVERAL JUDICIAL PRONOUNC EMENTS INCLUDING DECISIONS OF JURISDICTIONAL ITAT. LD. CIT(A) AFTER TAKING INTO CONSIDERATION THIS SUBMISSION OF THE ASSESSEE ALLOWED THE APPEAL OF THE ASSESSEE BY OBSERVING AS UNDER:- 3.3 I HAVE CONSIDERED THE FACTS OF THE CASE, BASIS OF ADDITION MADE BY AO AND ARGUMENTS OF THE APPELLANT. THE BASIS GIVEN BY AO FOR MAKING ADDITION IS THAT THE SOURCE OF INCOME DIS CLOSED BY APPELLANT DURING SURVEY PROCEEDINGS REMAINS UNDISCLOSED HEN CE IT WOULD NOT BE CLASSIFIED UNDER HEAD INCOME 'BUSINESS AND PROFESS ION', RATHER TO BE TAXED AS 'INCOME FROM OTHER SOURCES'. THE CONCLUSI ON DRAWN BY AO DOES NOT GET SUPPORT FROM THE STATEMENTS GIVEN BY PARTNE R DURING THE SURVEY PROCEEDINGS, WHICH IS THE ONLY BASIS OF MAKING ADDI TION. DURING THE SURVEY, PARTNER OF THE FIRM CATEGORICALLY STATED AS UNDER: 'Q.8 I SHOW YOU THIS RED MARUTI BOOK NO,2 (DIARY) M ARKED AS ANN. B1/1 AND ASK YOU TO EXPLAIN WHO WROTE THIS DIARY AN D WHAT IS WRITTEN IN THIS DIARY? I.T.A NO. 2447/AHD/2012 A.Y. 2009-10 PAGE NO DCIT VS. NEW UMIYA VIJAY SAW MILL 5 A.8 RED DIARY SEIZED AS ANN.B1/1, HAS BEEN WRITTEN BY MYSELF AND AMOUNT OF RS.36,03,000/- (RUPEES THIRTY SIX LACS TH REE THOUSANDS ONLY) MENTIONED IN THIS DIARY IS RECEIVABLE FROM VA RIOUS PARTIES TOWARDS UNACCOUNTED SALE AND / OR JOB WORK. WE HAVE NOT INCLUDED IT IN OUR BOOKS OF ACCOUNTS OF CURRENT FINANCIAL YE AR 2008-09 AND IT IS OUR CURRENT YEAR'S UNACCOUNTED INCOME. IT IS AN INC OME OVER AND ABOVE REGULAR INCOME. I DECLARE IT AS CURRENT YEAR' S BUSINESS INCOME AND WILL DISCHARGE TAX THEREON. I DISCLOSE E NTIRE SUNDRY RECEIVABLE FOUND IN THE DIARY AS INCOME AND WILL DI SCHARGE TAX THEREON ACCORDINGLY.' 3.3.1 THE SPECIFIC DISCLOSURE MADE BY PARTNER THAT IN THE COURSE OF BUSINESS OF SALE OF WOOD AND JOB WORK THE APPELLANT HAS EARNED UNDISCLOSED INCOME, CLEARLY EXPLAINS THE SOURCE AND METHOD OF EARNING UNDISCLOSED INCOME BY THE APPELLANT DURING THE YEAR UNDER CONSIDERATION. THIS INCOME HAS BEEN ADMITTED BY THE APPELLANT AND SHOWN IN THE RETURN OF INCOME AND PAID THE TAXES ON THAT. THIS FACT IS NOT CONTROVERTED BY AO ALSO. THE AO HAS FAILED TO IDENTIFY ANY SOURCE OF I NCOME OTHER THAN THIS BUSINESS ACTIVITY WHICH REMAINS UNEXPLAINED. MOREOV ER, THE DEEMING PROVISIONS UNDER CHAPTER-VI, TO CONSIDER ANY INCOME AS OTHER SOURCES INCOME, IS ATTRACTED ONLY WHEN ANY SUM CREDITED IN THE BOOKS OF ACCOUNT OR ANY INVESTMENT REMAIN UNEXPLAINED. HERE IN THE CASE OF APPELLANT, IT HAS EXPLAINED THE SOURCE OF UNDISCLOSED INCOME I.E. THE BUSINESS ACTIVITY OF TRADING OF WOODS AND JOB WORK, WHICH CLEARLY FAL LS UNDER THE HEAD 'INCOME FROM BUSINESS AND PROFESSION'. THE HON'BIE JURISDICTIONAL AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF CHOK SI HIRALAL MAGANLAL V. DCIT (2011) 141 TTJ (AHD) (UO) 1; HAS HELD AS FO LLOWS: 'SINCE IN THE PRESENT CASE EXCESS STOCK FOUND DURIN G THE SURVEY IS NOT SEPARATELY AND CLEARLY IDENTIFICATION BUT IS PA RT OF MIXED LOTS OF STOCK FOUND AT THE PREMISES WHICH INCLUDED DECLARED STOCK AS PER BOOKS AND ALSO THE EXCESS STOCK AS COMPUTED BY SURV EY OFFICERS, THE PROVISIONS OF S. 69B CANNOT BE MADE APPLICABLE AS PRIMARY CONDITION FOR INVOKING THE PROVISIONS OF SS. 69A AN D 69B IS THAT THE ASSET SHOULD BE SEPARATELY IDENTIFIABLE AND IT SHOU LD NAVE INDEPENDENT PHYSICAL EXISTENCE OF ITS OWN. SINCE EX CESS STOCK IS A RESULT OF SUPPRESSION OF PROFIT FROM BUSINESS OVER THE YEARS AND HAS NOT BEEN KEPT IDENTIFIABLE SEPARATELY BUT IS THE PA RT OF OVERALL PHYSICAL STOCK FOUND, THE INVESTMENT IN THE EXCESS STOCK HAS TO BE TREATED AS BUSINESS INCOME. ONCE EXCESS STOCK IS TR EATED AS BUSINESS INCOME THEN ASSESSEE IS ENTITLED FOR HIGHE R REMUNERATION TO THE PARTNERS AS PER S. 40(B). AS A RESULT, THIS GROUND OF ASSESSEE IS ALLOWED.' 3.3.2 FURTHER, IN THE CASE OF FASHION W ORLD V ASSTT CIT, CIR-2, AHEDABAD (ITA NO.1634 BENCH-B DATED 12.02.2010), IT HAS BEEN HELD BY I.T.A NO. 2447/AHD/2012 A.Y. 2009-10 PAGE NO DCIT VS. NEW UMIYA VIJAY SAW MILL 6 HON'BLE ITAT THAT IF THE ASSETS DISCLOSED DURING TH E SURVEY ARE IDENTIFIED WITH BUSINESS OF ASSESSEE THEN THE SAME HAVE TO BE TREATED AS PART OF BUSINESS INCOME WHILE COMPUTING TOTAL INCOME, AND T HE CONSEQUENTIAL DEDUCTION UNDER SECTION 40(B) HAS TO BE ALLOWED. SI MILAR VIEWS HAVE BEEN TAKEN BY DIFFERENT COURTS/LTATS AS MENTIONED BY APP ELLANT IN ITS SUBMISSIONS. 3.3.3. IN VIEW OF THE ABOVE FACTS AND DECISIONS BY DIFFERENT AUTHORITIES, I DO NOT FIND ANY MERIT IN THE AO'S CASE THAT UNDISCL OSED INCOME DECLARED DURING SURVEY PROCEEDINGS HAS TO BE TAXED AS INCOME FROM OTHER SOURCES. THE VERY FACTS OF THE CASE CLEARLY ESTABLISH THAT T HE UNDISCLOSED INCOME WAS EARNED FROM THE BUSINESS ACTIVITY OF TRADING OF WOOD AND JOB WORK HENCE IT WILL FALL UNDER THE HEAD OF 'INCOME FROM B USINESS AND PROFESSION'. 3.3.4 AS FAR AS REMUNERATION TO PARTNER IS CONCERNE D, ONCE THE INCOME IS ASSESSED UNDER THE HEAD BUSINESS AND PROFESSION, DE DUCTION BECOMES CONSEQUENTIAL IN NATURE. THE BOOK PROFIT OF THE FIR M HAS TO BE COMPUTED AND REMUNERATION TO PARTNERS AS PER PROVISIONS OF S ECTION 40(B) HAS TO BE ALLOWED. THE WORDS 'BOOK PROFIT' HAVE BEEN DEFINED IN SECTION 40(B) WHICH MEANS NET PROFIT AS SHOWN IN PROFIT AND LOSS ACCOUN T COMPUTED IN MANNER LAID DOWN IN CHAPTER IV-D. THUS, THE UNDISCLOSED BU SINESS INCOME FORMS PART OF BOOK PROFIT. THE APPELLANT HAS NOT CARRIED OUT ANY OTHER BUSINESS AND HAS NO OTHER SOURCE OF INCOME. THEREFORE, WHAT EVER INCOME ARISING TO THE APPELLANT, IS BUSINESS INCOME AN D ALL ELIGIBLE DEDUCTIONS, INCLUDING REMUNERATION TO PARTNERS, ARE TO BE ALLOWED. IN THE CASE OF APPELLANT, IT IS FULFILLING ALL THE CONDITI ONS PRESCRIBED UNDER SECTION 40(B) OF I.T. ACT FOR CLAIMING THE DEDUCTION. THER EFORE, THE AO IS NOT JUSTIFIED IN DISALLOWING THE DEDUCTION OF RS.13 ,00,000/- ON ACCOUNT OF REMUNERATION TO PARTNERS. THEREFORE, ADDITION MADE AO IS DELETED. 7. AGGRIEVED BY THIS ORDER OF LD. CIT(A), THE REVEN UE IS IN APPEAL BEFORE US. 8. AT THE TIME OF HEARING LD. DR VEHEMENTLY SUPPORT ED THE ORDER PASSED BY AO. IT WAS ALSO SUBMITTED THAT SINCE INC OME FROM JOB WORK WAS NOT SHOWN BY THE ASSESSEE IN THE EARLIER YEARS I.E. ASSESSMENT YEAR 2008- 09 AND WAS ONLY DECLARED AT THE TIME OF SURVEY, THE SAME HAS RIGHTLY BEEN TREATED BY THE AO AS INCOME FROM OTHER SOURCES AND CLAIM OF ASSESSEE FOR PARTNERS REMUNERATION U/S. 40(B) OF THE ACT HAS RI GHTLY BEEN DENIED BY THE I.T.A NO. 2447/AHD/2012 A.Y. 2009-10 PAGE NO DCIT VS. NEW UMIYA VIJAY SAW MILL 7 AO. HE THEREFORE SUBMITTED THAT ORDER PASSED BY LD . CIT(A) MAY KINDLY BE SET ASIDE AND THAT OF AO BE RESTORED. LEARNED COUN SEL OF THE ASSESSEE ON THE OTHER HAND VEHEMENTLY SUPPORTED THE ORDER PASSE D BY LD. CIT(A). HE FURTHER SUBMITTED THAT WHILE MAKING THE ADDITION, T HE AO HAS PLACED RELIANCE ONLY ON THE STATEMENT OF THE ASSESSEE GIVE N BY HIM AT THE TIME OF SURVEY AND THEREFORE THE STATEMENT CANNOT BE RELIED IN PART, IT SHOULD BE RELIED IN FULL. SINCE AT THE TIME OF SURVEY, THE A SSESSEE HAS DISCLOSED A SUM OF RS. 39,96,537/- AS BUSINESS INCOME, THE SAME SHOULD BE TREATED AS BUSINESS INCOME ONLY AND THEREFORE PARTNERS REMUNE RATION OF RS. 13 LACS IS ALLOWABLE DEDUCTION. HE FURTHER PLACED RELIANCE ON THE DECISION OF CULCUTTA HIGH COURT IN THE CASE OF MD SERAJUDDIN & BROTHERS VS. CIT WHEREIN IT WAS HELD THAT FOR THE PURPOSE OF COMPUTA TION OF ALLOWABLE REMUNERATION TO PARTNERS U/S. 40(B) NET PROFIT INCL UDES NOT ONLY INCOME OF BUSINESS BUT ALSO INCOME FROM OTHER SOURCES. CONCL UDING HIS ARGUMENT LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT LD. CIT(A) HAS RIGHTLY TREATED INCOME DISCLOSED DURING THE SURVEY AS BUSIN ESS INCOME AND HAS RIGHTLY ALLOWED REMUNERATION TO PARENTS FROM THE SA ME AND THEREFORE ORDER PASSED BY LD. CIT(A) MAY KINDLY BE UPHELD. 9. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD, WE FIND THAT THERE IS NO DISPUTE ABOUT THE FACT THAT AO WHILE MA KING THE ADDITION OF RS. 13 LACS BY DISALLOWING CLAIM OF THE ASSESSEE OF THI S AMOUNT IN RESPECT OF PARTNERS REMUNERATION U/S. 40(B) OF THE ACT AGAINS T THE INCOME DISCLOSED AT THE TIME OF SURVEY HAS PLACED RELIANCE ONLY ON T HE STATEMENT OF THE PARTNER OF THE ASSESSEES FIRM AT THE TIME OF SURVE Y. WHILE GOING THROUGH THIS STATEMENT, WE FIND THAT DISCLOSURE WAS MADE OF RS. 39,96,537/- AS INCOME FROM BUSINESS. THE AO HOWEVER TREATED THE S UM OF RS. 3,93,537/- AS INCOME FROM BUSINESS AND THE DISCLOSURE OF RS. 3 6,03000/- ON ACCOUNT I.T.A NO. 2447/AHD/2012 A.Y. 2009-10 PAGE NO DCIT VS. NEW UMIYA VIJAY SAW MILL 8 OF UNACCOUNTED NET JOB WORK INCOME WAS TREATED BY H IM AS INCOME FROM OTHER SOURCES ONLY ON THE GROUND THAT ASSESSEE HAS NEVER SHOWN INCOME FORM JOB WORK IN EARLIER YEARS OR TILL THE DATE OF SURVEY DURING THE YEAR UNDER APPEAL, THEREFORE THIS DISCLOSED INCOME CANNO T BE TREATED AS INCOME FROM BUSINESS AND PROFESSION. TO VERIFY THIS FACT, ASSESSEE WAS DIRECTED TO FILE DETAILS OF JOB WORK INCOME IF ANY IN EARLIER A ND SUBSEQUENT YEARS AND IT WAS FOUND THAT ASSESSEE HAS SHOWN INCOME OF RS. 2,0 1,215/- AND RS. 48,551/- UNDER THE HEAD VERAN MAJOORI INCOME DURI NG THE ASSESSMENT YEARS 2008-09 AND 2010-11 RESPECTIVELY. THE FINDIN G OF AO BEING ON WRONG FACTS IS NOT SUSTAINABLE. WE ALSO AGREE WITH THE CONTENTION OF THE ASSESSEE THAT IF STATEMENT OF THE PARTNER AT THE TI ME OF SURVEY WAS TO BE RELIED FOR MAKING THIS ADDITION/DISALLOWANCE, THE S TATEMENT SHOULD NOT BE RELIED IN PART AND SHOULD HAVE BEEN RELIED IN FULL. SINCE AT THE TIME OF SURVEY, ASSESSEE DISCLOSED THE ENTIRE INCOME AS BUS INESS INCOME, THE AO WAS NOT JUSTIFIED IN BIFURCATING THE SAME INTO INCO ME FROM OTHER SOURCES AND INCOME FROM BUSINESS OR PROFESSION. IN VIEW OF THIS, THE ORDER PASSED BY LD. CIT(A) TREATING THE DISCLOSED INCOME OF THE ASSESSEE AS BUSINESS INCOME AND ALLOWING THE PARTNERS REMUNERATION AMOU NTING INTO RS. 13 LACS U/S. 40(B) OF THE ACT IS HEREBY UPHELD. GROUND NO. 1 & 2 OF REVENUES APPEAL ARE DISMISSED. 10. GROUND NO. 3 RELATES TO ADDITION OF RS. 18,01,5 00/- MADE ON ACCOUNT OF UNEXPLAINED EXPENDITURE U/S. 69C. 11. DURING THE ASSESSMENT PROCEEDINGS, AO OBSERVED THAT AMOUNT OF RS. 36,03,000/- DISCLOSED BY ASSESSEE TOWARDS JOB W ORK RECEIVABLE WAS NET JOB WORK RECEIVABLE FOR THE YEAR UNDER APPEAL A ND FOR EARNING THIS NET JOB WORK RECEIPT NO EXPENDITURE WAS CLAIMED TO HAVE BEEN INCURRED. SINCE I.T.A NO. 2447/AHD/2012 A.Y. 2009-10 PAGE NO DCIT VS. NEW UMIYA VIJAY SAW MILL 9 THESE WERE NET RECEIPT, THE AO HELD THAT ASSESSEE H AD UNEXPLAINED EXPENDITURE TOWARDS EARNING THE JOB WORK RECEIPT AN D ACCORDINGLY RS. 18,1,500/- BEING 50% OF THE 36,03000/- TREATED AS U NEXPLAINED EXPENDITURE U/S. 69C OF THE ACT AND ADDED TO THE TO TAL INCOME OF THE ASSESSEE. LD. CIT(A) HOWEVER DELETED THIS ADDITION BY HOLDING THAT AO SHOULD HAVE MADE THE DISALLOWANCE ON THE BASIS OF S AME EVIDENCE OR MATERIAL ON RECORD. HE FURTHER FOUND THAT NO DEFEC T IN THE BOOKS OF ACCOUNTS AND DOCUMENTS MAINTAINED BY THE ASSESSEE H AS BEEN FOUND BY THE ASSESSEE, THEREFORE THE ADDITION MADE BY AO WAS ONLY ON THE BASIS OF SUSPICION OR BARE GUESS WHICH IS NOT SUSTAINABLE IN LAW. WE FIND NO INFIRMITY IN SUCH FINDING OF THE LD. CIT(A) AND THE REFORE WE FEEL NO NEED TO INTERFERE WITH THE ORDER PASSED BY HIM AND THE SAME IS HEREBY UPHELD. THIRD GROUND OF REVENUES APPEAL IS ALSO DISMISSED. 12. FOURTH GROUND RELATES TO ADDITION OF RS. 3,93,5 37/-. 13. THE AO HAS BIFURCATED THE TOTAL AMOUNT OF DISCL OSURE I.E. RS. 39,96,537/- UNDER TWO HEADS (I) INCOME FROM OTHER S OURCES AT RS. 36,03000/- AND (II) INCOME FROM BUSINESS AND PROFES SION AT RS. 3,93,537/-. THE FIRST HEAD WAS TREATED BY THE AO AS INCOME FROM OTHER SOURCES AS HAS BEEN DISCUSSED BY US WHILE DECIDING 1ST & 2ND GROUN DS OF THIS APPEAL. WE HAVE UPHELD THE VIEW OF LD. CIT(A) TREATING THE AMO UNT OF RS. 36,03000/- AS INCOME FROM BUSINESS AND PROFESSION. SINCE ASSE SSEEE HAS ALREADY SHOWN THE TOTAL OF BOTH THE AMOUNTS I.E. 39,93,537/ - AS BUSINESS INCOME IN THE RETURN OF INCOME AND HAS ALSO PAID TAX ON IT, T HERE IS NO JUSTIFICATION ON THE PART OF THE AO FOR MAKING AN ADDITION OF RS. 3, 93,537/- WHILE COMPUTING THE INCOME OF THE ASSESSEE AND THE SAME HAS RIGHTLY BEEN DELETED BY LD. I.T.A NO. 2447/AHD/2012 A.Y. 2009-10 PAGE NO DCIT VS. NEW UMIYA VIJAY SAW MILL 10 CIT(A), THEREFORE THE ORDER PASSED BY HIM IS HEREBY UPHELD. THIS GROUND OF REVENUES APPEAL IS ALSO DISMISSED. 14. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (N.S. SAINI) ( D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 30/06/2014 AK / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,