TaxTMI 
TaxTMI 
2008 (12) TMI 411
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....ect of which tax was deducted at source for the assessment year 1997-98 in the computation of income for the block period April 1, 1986 to March 5, 1997, under section 158BB of the Act. The assessment under Chapter XIV-B was initiated pursuant to a search carried out on March 5, 1997, in the premises of the assessee. As on the date of search, the assessee had already filed the return for the assessment year 1995-96. However, subsequent to the date of search, the assessee filed a revised return on March 6, 1997, disclosing a further income of Rs.68,143 for the said year. For the assessment year 1996-97, though the time for filing the return was over as on the date of search, the assessee had not filed return. However, after the date of searc....
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....ritten the books of account including the contract receipts, out of which the estimated income arises, and therefore, the assessee was not entitled to exclusion. Accordingly, the Assessing Officer included the additional income returned for the year 1995-96, the income returned and assessed for the year 1996-97 and the income in respect of which tax deducted at source was made by the awarders for the year 1997-98, in the block assessment made under section 158BC of the Act. The assessee succeeded in the two levels of appeal before the first appellate authority and before the Tribunal. This appeal is filed against the order of the Tribunal confirming the order in first appeal. 3. We have heard learned standing counsel of the Income-tax De....
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....rns ; (c) where the due date for filing a return of income has expired, but no return of income has been filed,- (A) on the basis of entries as recorded in the books of account and other documents maintained in the normal course on or before the date of the search or requisition where such entries result in computation of loss for any previous year falling in the block period ; or (B) on the basis of entries as recorded in the books of account and other documents maintained in the normal course on or before the date of the search or requisition where such income does not exceed the maximum amount not chargeable to tax for any previous year falling in the block period ; (ca) where the due date for fili....
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.... this Chapter, losses brought forward from the previous year under Chapter VI or unabsorbed depreciation under sub-section (2) of section 32 shall not be set off against the undisclosed income determined in the block assessment under this Chapter, but may be carried forward for being set off in the regular assessments." 5. The case of the Revenue is that the income returned through the revised return filed for the year 1995-96 and belated return filed for the year 1996-97, after the date of search, cannot be excluded in the computation of income for the block period. Learned counsel for the assessee, on the other hand, contended that once assessments are made based on the return filed under clause (a) of the above provision, such ....
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....Department in the course of search. The scheme of exclusion of various items of income in the computation of income for the block period under section 158BB is such that income either assessed or returned for assessment or accounted by the assessee should not be assessed as income unearthed by the Department in the course of search. Obviously, the income assessed and covered by clause (a) is covered by assessment completed prior to the date of commencement of search. The second category of income is the income covered by returns or revised returns filed, which are pending for assessments. Obviously, such returns should have been filed prior to the date of commencement of search or allowed to be filed after the date of search. The latter cat....