M/S. BARODA CONDUCTORS PVT. LTD.,,AHMEDABAD vs. THE DY.CIT, CIRCLE-1(1),, BARODA

This appeal by the Assessee is preferred against the order of the Ld. CIT(A)-I, Baroda dated 01.11.2013 pertaining to A.Y. 2007-08.

At the very outset, the ld. counsel for the assessee stated that he is not pressing ground no. 1 and the same is dismissed as not pressed.

Coming to the grievance raised vide ground no. 2, the facts shows that the assessee was having undisclosed bank account which fact has been accepted by the assessee during the course of investigation. When the assessee was confronted with the bank accounts, the assessee accepted that the bank accounts are not shown in the balance sheet and were not part of the books of accounts of the assessee. The assessee accepted that the amount credited in these bank accounts were unaccounted and undisclosed income of the assessee.

The assessee further pointed out that since the period of limitation for filing the revised return of income has been expired but out of abundant precaution, the assessee has already paid taxes and interest on the amount found to be undisclosed income in the bank account of the assessee. To regularize the contention of the assessee, the assessment was reopened u/s. 147 of the Act and the assessee company revised its computation of income adding Rs. 26,26,322/- in its total income and the taxes were accordingly paid. The only point out dispute is that while making the addition of Rs. 26,26,322/-, the A.O. has treated the same as unexplained cash credit u/s. 68 of the Act.

We find force in the contention of the ld. counsel. The ld. counsel was fair enough in not questioning the addition but the section under which the additions have been made is questioned. In our considered opinion, since the assessee is undoubtedly carrying on business and maintaining regular books of accounts for its business any amount found unexplained in the bank account should be treated as business income of the assessee.

The addition of Rs. 26,26,322/- stands confirmed as undisclosed business income of the assessee. Appeal is accordingly allowed.