Regular assessment may reach the real controller of a dummy concern, while block assessment remains limited to undisclosed income.

An addition concerning an alleged dummy concern was not confined to block assessment under Chapter XIV-B where the issue was only to identify the real owner or controller of a concern shown in another person's name. The Assessing Officer could lift the veil in regular assessment and assess the assessee as the real beneficiary, while also supporting reopening or protective assessment in the name of the apparent proprietor to safeguard revenue. The Tribunal erred in treating the matter as one arising only in block assessment, since block assessment is limited to undisclosed income unearthed in search, not to determining the true controller of entries recorded in regular books.

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Issues: Whether the addition relating to the alleged dummy concern could be made in the regular assessment proceedings or was confined to block assessment proceedings under Chapter XIV-B of the Income-tax Act, 1961.

Analysis: The search did not itself yield the income as undisclosed income in the sense of a completed regular return being ignored; rather, during the block assessment proceedings the Assessing Officer found that the concern shown in the name of another person was ically controlled by the assessee. The entries stood in the regular books of account and the other person had been assessing the income as proprietor, so the issue was whether the Assessing Officer could lift the veil and assess the real beneficiary in regular assessment while protecting the revenue by reopening the case of the named proprietor under Section 148. On this view, the Tribunal was wrong in treating the matter as one that could arise only in block assessment.

Conclusion: The addition could be made in the regular assessment proceedings against the assessee, and the reopening/protective assessment in the name of the apparent proprietor was also justified.

Ratio Decidendi: Where the question is only to identify the owner or controller of an apparently regular concern, the Assessing Officer may lift the veil in regular assessment, while block assessment remains confined to undisclosed income unearthed in search.

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