Recorded cash deposits are not undisclosed income in block assessment when books and pre-search returns already disclose them.

Cash deposits fully recorded in regularly maintained books and reflected in returns filed before the search within the section 139(1) timeframe were not undisclosed income for Chapter XIV-B block assessment purposes. The Tribunal held that the Assessing Officer's addition went beyond the scope of block assessment because the deposits had already been disclosed in the regular records and return filings. The High Court treated these conclusions as pure findings of fact and accepted that the settled law on block assessments had been correctly applied. The addition was therefore unsustainable, and no substantial question of law arose.

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Issues: Whether cash deposits recorded in regularly maintained books of account and reflected in returns filed before the search could be treated as undisclosed income in block assessment proceedings under Chapter XIV-B of the Income-tax Act, 1961, and whether any substantial question of law arose from the Tribunal's deletion of the addition.

Analysis: The Tribunal had found that the cash deposits stood fully recorded in the assessee's regular books and that the relevant returns of income had been filed before the search within the time contemplated by section 139(1) of the Income-tax Act, 1961. On those facts, the deposits did not fall within the meaning of undisclosed income under section 158B(b) read with section 158BB of the Income-tax Act, 1961. The Tribunal further held that the addition made by the Assessing Officer travelled beyond the scope and ambit of Chapter XIV-B. The High Court treated these as pure findings of fact and noted that the Tribunal had merely applied the settled law governing block assessment proceedings.

Conclusion: The addition could not be sustained in block assessment proceedings, and no substantial question of law arose.

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