TaxTMI 
TaxTMI 
1998 (2) TMI 165
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....he return Form is approved in rules by Board and is of binding nature on all officers under the Income-tax Act, 1961 and also ignoring the provisions of section 139(1) of the Act and, therefore, the addition of Rs. 47,723 which is assessed as undisclosed income is liable to be deleted. (ii) The ld. Assessing Officer has erred in assessing the income of Rs. 47,723 as undisclosed income ignoring the Cir. No.717 at Sl. No. 39.3(iv) and other provisions of the Act and also the fact that the particulars of entire income of A.Ys. 1987-88 to 1991-92 was already disclosed while filing the return of income of 1992-93 and as such the addition of Rs. 47,723 as undisclosed income is liable to be deleted. (iii) The ld. Assessing Officer erred in treating the regular income of Rs. 68,256 pertaining to the A.Y. 1995-96 arrived at by regularly maintained books of account. (iv) The ld. Assessing Officer has erred in making assessment on assessee under section 158BC of the Act when there was no search on assessee and no panchnama of any sort was prepared by the revenue in respect of the assessee. 3. Ground Nos. (i) and (ii) relate to the inclusion of non-taxable income for the A.Ys. 1987....
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.... assessment year cannot be included in the undisclosed income assessed by the Assessing Officer in this block assessment. He further invited our attention to section 158B in which the word 'undisclosed income' has been defined. From the plain reading of section 158B it is quite obvious that the undisclosed income includes only that money which has not been or would not have been disclosed for the purpose of this Act. The income below the taxable limit is not supposed to be disclosed by the assessee for the purpose of this Act. He further invited our attention to the order of the Nagpur Bench of the Tribunal in the case of Kasturchand Baid v. Asstt. CIT [1997] 58 TTJ (Nag.) 253 in which the Tribunal has held that the Assessing Officer could not treat the assessee's income as undisclosed income under section 158BB(1)(c) simply because the assessee had not filed the return for that year when the income was below taxable limit. The learned DR, on the other hand, relied on the assessment order. 4. We have heard the rival submissions of the parties and carefully perused the order of assessment and the relevant provisions of the Income-tax Act and the documents placed on record. An ide....
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....een maintaining the books of account regularly during the course of previous year, which were seized by the revenue at the time of search and on the basis of these books of account the return was prepared and filed under section 139(4) of the Act, on 3-1-1996 within the time allowed under the Income-tax Act, the income declared by the assessee does not fall within the category of that income which would not have been disclosed for the purpose of this Act. The maintenance of books of account regularly during the course of previous year cannot be called to have been maintained for other purpose than the Income-tax Act. 6. The learned counsel for the assessee further invited our attention to the provisions of section 158BB and Circular No. 717 issued by the CBDT and submitted that as per clause (b) of sub-section (1) of section 158BB if the return was filed under any clause of section 139, the income declared therein would be deducted while computing the undisclosed income under this section. 7. In oppugnation, the learned DR squarely relied on the assessment order. Besides, he submitted that the return was filed after the search was conducted by the revenue authorities. The ass....
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....s of account of the assessee, the intention of the assessee must be examined in proper perspective as to what purpose the books were maintained by him. If the books are maintained for business purposes or any other purposes other than the Income-tax Act, it could be gauged that the income would not have been disclosed for the purpose of this Act but if it is established from the surrounding circumstances that the assessee has maintained the books of account only for the purpose of Income-tax Act and none else, only an inference can be drawn that the books were maintained for the purpose of Income-tax Act and the income declared therein cannot be called to have been fallen within the category of income which would not have been disclosed for the purpose of this Act. A similar view was observed in the book of J.M. Harish at page 7408 that the assessee's claim would be accepted if he shows that the income or transaction relating to such income are recorded in the books of account maintained in the normal course of business. 9. In the instant case, the search was conducted on 20-11-1985 and during the course of search the books of account were seized by the revenue authorities and t....
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....eturned income should be adjusted while computing the total undisclosed income under section 158BB of the Act. For deciding this issue we also feel it proper to reproduce the relevant provisions of clause (b) of section 158BB of the Act: - "158BB. (1) The undisclosed income of the block period, shall be the aggregate of the total income of the previous years falling within the block period computed, in accordance with the provisions of Chapter IV, on the basis of evidence found as a result of search or requisition of books of account or documents and such other materials or information as are available with Assessing Officer, is reduced by the aggregate of the total income, or as the case may be, as increased by the aggregate of the losses of such previous years, determined,- (a) (b) where returns of income have been filed under section 139 or section 147 but assessments have not been made till the date of search or requisition on the basis of the income disclosed in such returns;" 11. From a plain reading of this clause we find that this clause is applicable to those cases in which the return has been filed under section 139 or 147 of the Act but the assessment has not....