February 2023
When the AO had himself observed that the undisclosed income surrendered by the assessee, during survey, was nothing but the accumulation of the profit which it had been systematically enjoying, then, drawing of a view to the contrary and holding the same as not being sourced out of latter’s business but having been sourced from its income from undisclosed sources within the meaning of Section 69 of the Act is beyond comprehension.
By Jagdish Punjabi, Chartered Accountant
Devendra Jain, Advocate
Reading Time 4 mins
56 Kulkarni & Sahu Buildcon Pvt Ltd vs. DCIT
TS-969-ITAT-2022 (Rajkot)
A.Y.: 2012-13
Date of Order: 12th December, 2022
Section: 69
When the AO had himself observed that the undisclosed income surrendered by the assessee, during survey, was nothing but the accumulation of the profit which it had been systematically enjoying, then, drawing of a view to the contrary and holding the same as not being sourced out of latter’s business but having been sourced from its income from undisclosed sources within the meaning of Section 69 of the Act is beyond comprehension.
FACTS
The assessee company, engaged in the business of civil construction, e-filed its return of income declaring an income of Rs. 1,32,56,660. In the course of assessment proceedings the assessee was asked to explain the excess WIP of Rs. 30,71,500 as also excess stock of building material which included shuttering material of Rs. 24,60,000 unearthed by the survey team in the course of survey proceedings conducted on 2nd November 2011.
The assessee had surrendered, in the course of survey proceedings, the sum of Rs. 55,31,500 which sum was credited to its Trading Account. The (AO contended that the same was not separately offered in computation of income. The AO was of the view that as the excess stock or unexplained investment or cash sur
