TaxTMI 
TaxTMI 
TaxTMI 
2009 (5) TMI 564
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....-------------------- Year ending Assessed undisclosed income (Rs.) -------------------------------------------- 31-3-1997 1,54,400 -------------------------------------------- 31-3-1998 1,54,400 -------------------------------------------- 31-3-1999 1,52,400 -------------------------------------------- 31-3-2000 4,39,400 -------------------------------------------- 31-3-2001 ....
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....8-99 Nil Nil 1,54,400 1,54,400 --------------------------------------------------------- 1999-2000 44,350 Nil 1,52,400 1,96,750 --------------------------------------------------------- 2000-01 1,40,671 1,12,000 3,27,400 5,80,071 --------------------------------------------------------- 2001-02 66,110 36,794 3,05,404 4,08,308 --------------------------------------------------------- 2002-03 13,520 19,650 1,94,875 2,28,045 --------------------------------------------------------- 2003-04 Nil 26,805 1,33,787 &....
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.... the amount had not been or would not have been disclosed and that the deposit and the interest paid on the deposits should be false on the basis of the unearthed evidence; - that reliance was placed on the decisions in the following cases: (i) CIT vs. Ansal Buildwell Ltd. (2008) 219 CTR (Del) 238 : (2008) 5 DTR (Del) 246 : (2008) 304 ITR 378 (Del); (ii) Bhagwati Prasad Kedia vs. CIT (2001) 167 CTR (Cal) 336 : (2001) 248 ITR 562 (Cal); (iii) CIT vs. Baroda Chain Works (2007) 293 ITR 176 (Guj). 7. Shri Omkareshwar Chidra, CIT-Departmental Representative, supported the orders of the AO and the CIT(A). He contended that the statements/confessions made during the search were retracted after one and a half years and that the retractions were not supported by any evidence. He vehemently argued saying that the orders of the AO and the CIT(A) needed to be upheld. He placed reliance on the decisions in the following cases. (i) Pro main Ltd. vs. Dy. CIT (2005) 95 TTJ (Del)(SB) 825 : (2005) 95 ITD 489 (Del)(SB); (ii) K.P. Mohammed Salim vs. CIT (2008) 216 CTR (SC) 97 : (2008) 6 DTR (SC) 179 : (2008) 300 ITR 302 (SC); (iii) Carpenters Classics (Exim) (P) Ltd. vs. Dy. CIT (2007) 108 TTJ....
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....t have been disclosed for the purposes of this Act or any expense, deduction or allowance claimed under this Act which is found to be false." 12. The sub-s. (1) of s. 158BB dealing with computation of 'undisclosed income' of the block period reads as under: "158BB. Computation of undisclosed income of the block period. (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 this Act, on the basis of evidence found as a result of search or requisition of books of account or other documents and such other materials or information as are available with the AO and relatable to such evidence), as 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." 13. The assessee-firm and its four sister concerns are engaged in finance business. During the search, in the case of one of the sister concerns M/s Lakshmi Finance, one Shri Arthnareeswaran came to repay the loan and he was examined and interrogated by one of the officers of the search party. It was stated by ....
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....y the assessee-firm in the manner described above was invested in the firm itself as deposits/loans in the names of third parties. He further stated that out of the total pronote loans amounting to Rs. 75,69,000 appearing in the books of account of the assessee-firm about Rs. 16,00,000 represented income earned as unaccounted interest. The answer given by Shri P. Nallappan is reproduced by the AO in para 7 of his order. 19. Shri P. Nallappan, the managing partner of the assessee-firm submitted a list of such 'non-genuine' deposits/loans aggregating to Rs. 15,54,000 which is enclosed with the assessment order as Annex. (I). 20. In order to verify and confirm what had been stated by Shri P. Nallappan, post-search enquiries were made and letters were issued to persons as under: ------------------------------------ Sl. Name Sl. Name No. No. ------------------------------------ 1. Pappu 5. C. Nallammal ------------------------------------ 2.&....
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....as inter alia, noted that the creditors/depositors were closely related to one partner or the other, that all the alleged loans were stated to have been advanced in cash, that the alleged creditors/depositors were small agriculturists, or drawing meager salary from employment, that in several cases the source was stated to be gifts received on marriage and/or birthday, that where it was claimed that the creditors/depositors were assessed to tax, it was found during post-search enquires that the returns were filed after the search, that most of the alleged creditors/depositors did not receive their interest, that the creditors/depositors, in many cases did not have creditworthiness, that it was claimed that the deposits/loans were repaid by cheque, but enquiries revealed that these payments were made after the search, and these cheques were deposited in bank accounts opened for this specific purpose and money was immediately withdrawn. 24. It is seen from the facts discussed in the above paras that a transaction resulting in undisclosed income was taking place and was detected during the search. It was fortuitous that one of the persons who had taken loan was present at the time of....
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....ect of commission on sale of flats by M/s Televista Electronics Ltd. was found. In the books of account Rs. 12,50,000 was shown towards commission. According to the AO, the post-search inquiries revealed that the bill was bogus and no commission was paid to M/s Televista Electronics Ltd. On this basis, the AO added Rs. 12,50,000 as undisclosed income. The CIT(A) confirmed the addition, whereas the Tribunal deleted it. The High Court dismissed the appeal filed by the Department on the ground that no substantial question of law arose. The High Court observed as under: "10. On a reading of both these provisions of law (ss. 158B and 158BB), which are inserted in the Act by the same amending statute, that is, the Finance Act, 2002, it appears to us that undisclosed income should be that which is discovered as a result, inter alia, of a document or transaction which has not been or would not have been disclosed for the purpose of the Act. This pre-condition does not arise insofar as the present case is concerned because admittedly the document recovered during the search represented a disclosed transaction of sale of property that had taken place for which M/s Televista Electronics Ltd.....