- (1.) THIS appeal has been filed by the Revenue, against the judgment of the Tribunal, confirming the order of the CIT(A), whereby he had allowed deductions to the assessee, under Section 80IA of the IT Act, on the amount of Rs. 4,76,154, finding it to be business income.
(2.) THE appeal was admitted on 22nd Aug., 2006, by framing following substantial question of law: Whether on the facts and in the circumstances of the case, additions made in the income of the assessee as income from the undisclosed sources can be considered as income from the business, which is eligible for deduction under Section 80IA of the IT Act, 1961. The necessary facts are that a survey was conducted on the business premises of the assfssee, on 31st Dec, 1999, and according to the Department, excess stock, in the tune of Rs. 4,51,010 was found. The assessee did not object to this excess stock. Thereafter, the assessee filed return for the relevant previous year, on 31st Oct., 2000, which was selected for scrutiny, and notice under Section 143(2) was issued on 18th April, 2001, and onwards. The assessee, in the return has shown the total sales worth Rs. 5,48,01,800, and had shown GP @ 0.93 per cent.
(3.) THE AO, for the reasons recorded, rejected the books of account, within the meaning of Section 145(3), and then applied the GP rate of 3 per cent, as against 0.93 per cent, shown by the assessee, and accepting the amount of total sales, at the figure shown by the assessee, addition of an amount of Rs. 19,57,521 was made; then the AO proceeded to find, that during the course of survey, excess stock to the above extent was found, this figure of excess stock was included by the assessee, in the P&L; a/c only, and it was treated by the AO to be income of the assessee, from undisclosed sources, under Section 69, and charged to the tax.;