Admission of ownership can make cash found with third parties count as seized for block assessment under section 158BC

Where cash was first recovered from third parties but the assessee later admitted ownership in a section 132(4) statement, the amount could be treated as seized from the assessee for block assessment under section 158BC. The sequence of search, statement and panchanama supported that treatment, so the assessment was not invalid merely because the cash was initially found with others. Once the cash was properly regarded as seized from the assessee, the contention that section 158BD alone could apply failed, and the block assessment was upheld.

---

---

Issues: (i) Whether the cash found with third parties and later admitted by the assessee to belong to him could be treated as seized from the assessee for the purpose of block assessment under section 158BC of the Income-tax Act, 1961. (ii) Whether the block assessment made under section 158BC was vitiated for want of action under section 158BD.

Issue (i): The cash was initially recovered from the custody of the third parties, but the assessee's statement under section 132(4) admitted ownership of the specified amount. The sequence of search, statement, and panchanama supported the finding that the amount stood seized from the assessee for purposes of the block proceedings.

Conclusion: The issue was decided against the assessee and in favour of the Revenue.

Issue (ii): Once the amount was properly treated as seized from the assessee, the basis for invoking section 158BC remained intact. The assessee's contention that section 158BD alone could apply therefore failed.

Conclusion: The issue was decided against the assessee and in favour of the Revenue.

Final Conclusion: The block assessment was upheld and the appeal failed.

Ratio Decidendi: Where the assessee admits ownership of cash recovered during a search, the amount may be treated as seized from the assessee for block assessment under section 158BC, and the assessment is not invalid merely because the cash was first found with third parties.

---