TaxTMI 
TaxTMI 
2000 (2) TMI 191
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....s served on the assessee on7th Oct., 1997, Proof of having filed return of income for the asst. yrs. 1987-88 & 1988-89 by the due date has not been produced by the assessee. Hence, income declared for these two years (Rs. 18,400) & Rs. 18,500 for asst. yrs. 1987-88 & 1988-89 respectively) is being taken as nil and the above amount is taken as undisclosed income of the assessee for the block period. 3. Similarly, for asst. yr. 1995-96 & 1996-97, the return of income have been filed on 31st March, 1997, i.e. beyond the time limit, stipulated under s. 139 of the IT Act, 1961. The returned income for these two years is also being taken at nil and an amount of Rs. 2,64,408 for asst. yr. 1995-96 and Rs. 3,49,989 for asst. yr. 1996-97 is taken as undisclosed income of the assessee for the block period. 4. The search was conducted on10th Oct., 1996, hence the period from1st April, 1996to10th Oct., 1996is covered in the block period, the proportionate income of the assessee for this period works out to Rs. 1,84,716 taken as per the income shown by the assessee for the asst. yr. 1996-97. The return of income for the asst. yr. 1997-98 was due in June 1997. However, it has not been filed....
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....- 2. This assessment order is subject-matter of appeal, preferred by Amarnath Aggarwal. It is submitted by the learned counsel for the assessee that the AO had wrongly mentioned in para 2 of the assessment order that assessee had failed to file proof of having filed return of income for asst. yrs. 1987-88 and 1988-89 by the due date and he was not justified in treating the income of Rs. 18,400 and Rs. 18,500 for these two assessment years as undisclosed income of the assessee for the block period. In this connection our attention was drawn to pp. 13 and 14 of the paper book which are copies of assessment orders for asst. yr. 1987-88 and 1988-89 completed on23rd March, 1989and23rd Nov., 1989respectively. The assessee has certified that these documents were well before the AO and it was the contention of the learned counsel that AO has completely ignored the same. 2.1. The learned Departmental Representative has nothing to rebut the same. 2.2. After going through the copies of assessment orders for asst. yr. 1987-88 and 1988-89 which were completed well before the date of search, it was not justifiable on the part of AO to treat the income of Rs. 18,400 and Rs. 18,500 for th....
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....ncome from salary and interest for asst. yrs. 1995-96 and 1996-97 as sources of income were well within the knowledge of the Department. It was also pointed out from the chart appearing at p. 72 of the paper book that whatever income from salary and interest had been declared by the assessee for asst. yrs. 1995-96 and 1996-97, the same had been assessed by the Department without making any addition and that income cannot be treated as undisclosed income. Reliance had been placed on the decision of Tribunal Nagpur Bench SMC in ITA No. 998/Nag/1996 in the case of Smt. Jatin Bai Baid vs. Asstt. CIT dt.24th June, 1997, copy of which is appearing at pp. 73 to 78 of the paper-book. According to the learned counsel the same was the controversy before the SMC Bench and after hearing the submission of the assessee- as well as that of Departmental Representative the Bench had concluded that s. 158BB provides a procedure for computation of undisclosed income of block period and that is a machinery section per-supposing undisclosed which is to be determined first and then only it is to be computed in the prescribed manner. The Bench has also taken into consideration the sub-s. (c) of s. 158BB(....
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.... observed as under: "I have carefully considered the rival submissions made before me. A glance through the Chapter XIV-B of the IT Act, 1961 will make it clear that it provides special procedure for assessment of search cases. Sec. 158B(b) under this Chapter defines "undisclosed income" which includes any money, bullion, jewellery or other valuable article or thing or any income based on any entry in the books of account or other documents or transactions, where such money, bullion, jewellery, valuable articles, thing, entry in the books of account or other document or transaction represents wholly or partly income or property which has not been or would not have been disclosed for the purposes of IT Act. The undisclosed income includes income or property which has been defined in this definition and which has not been or would not have been disclosed for the purposes of IT Act. The words "which has not been or would not have been disclosed for the purposes of this Act" indicate that either the assessee failed to file the return or in the return filed the income has not been disclosed. But the second part applies in the case where the assessee has not filed return or omitted to....
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....time had not been lapsed for filing the return, in such case, s. 158BB(1)(c) cannot be resorted to. I am also unable to agree with the view of the Department that the due date mentioned in s. 158BB(1)(c) is the due date for filing the return under s. 139(1). It is very pertinent to note that s. 158BB(1)(b) specifically mentions s. 139(1) and ss. 147. Sec. 158BB(1)(b) states "where returns of income have been filed under s. 139 or s. 147 but assessments have not been made till the date of search or requisition, on the basis of the income disclosed in such return". It means that the returns filed under both the sections are equally to be considered for the purpose of computing the income. If that being so, it is not correct to say that in s. 158BB(1)(c), the words "due date for filing a return of income has expired but no return of income has been filed" means the due date under s. 139(1) only. There are different due dates for filing the returns in different sections under the Act. As in the case of this assessee against whom a notice has been served under s. 148 r/w s. 147 and the time for filing the return has not been expired, the due date for filing the return of income has not ....
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.... ------------------------------------------------------------ Name Item Sl. No. Weight Value as on as per list 10-10-96 as per list Rs. ------------------------------------------------------------ Smt. Rita Aggarwal&n....
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....he plea of the assessee was that she belonged to very rich family and possession of less than 50 tolas of gold jewellery by such married lady of more than fifteen years is not unbelievable fact. Reliance was placed on the CBDT Circular in which it has been emphasised on the search party that gold jewellery weighing 500 gms. in case of married lady be not seized. It appears that AO after considering all the facts noted that she may be possessed 250 gms. of jewellery and rest of the jewellery was treated as unexplained for the purpose of addition in the block period. 4.3. The AO further examined the case of the assessee that Smt. Dropdi, grand, mother of the assessee bequeathed 125.700 gms. jewellery through will. The AO did not find the alleged will as genuine. The AO also examined the plea of the assessee that ornaments of the assessee as well as of Smt. Dropdi Devi along with Shakuntla Devi were valued by registered Government Valuer as early as on 20th Dec, 1985 through Rajnish Bhushan Jain, a partner of M/s Jain Jewellers and after going through all the facts noted that this report of approved valuer was not inspiring any confidence but was manipulated move of the assessee. H....
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.... and it was not open to the CIT(A) to reject the explanation of assessee in regard to 10 tolas of gold jewellery. On the basis of this ratio the contention of the learned counsel for the assessee was that said ornaments weighing 495.300 gms. was to be treated as belonging to Smt. Rita Aggarwal who was married in the year 1979 and keeping in view the status of her family as she hails from a very rich family and her parents were also dealing in jewellery business. About 93.600 gms. jewellery the plea of the learned counsel for the assessee was that the same belonged to Miss Nidhi and Miss Yamini, daughters of the assessee and in that Circular of CBDT it has been mentioned that 25 gms. gold ornaments per unmarried lady would not be seized and if applied that yardstick to the facts then the ornaments belonging to two daughters of the assessee were slightly excessive to the said yardstick but keeping in view the status of the family it cannot be believed that it was more. About 58 gms. of gold jewellery the contention of the learned counsel is that it belonged to Satish Aggarwal. The above referred to CBDT Circular further provides that 100 gms. gold jewellery per male member of the fam....
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.... attention towards the statement of the assessee recorded at the time of search, wherein she admitted the entire jewellery belonging to her, as under: Q. Approximately 800 gms. of jewellery found in your room does it belong to you? Kindly explain. Ans. Yes. Jewellery belongs to me which were received from in-laws, parents, relations and friends over period of times on different occasions." 4.9.1. It was thus contended by him that the assessee adopted the theory of bifurcation of her jewellery amongst his family members in the light of Circular of CBDT. He stressed that the statement recorded at the time of search had more authentic and evidentiary value over the explanation furnished later. He further placed relianced on the order of AO and submitted that theory of execution of will is prima facie not believable because the will was not a registered document. It was not signed by two witnesses and it has not been proved that the will was bearing the thumb impression of Smt. Dropdi Devi. Further, the plea of the assessee that Smt. Dropdi Devi got valued the ornaments on20th Dec, 1985from Government Approved Valuer, Rajnish Bhushan Jain was rightly rejected by the AO for ....