TaxTMI 
TaxTMI 
2011 (9) TMI 325
X X X X Extracts X X X X
X X X X Extracts X X X X
....processing the sarees supplied by the manufacturer/dealers. A search was conducted at the premises of the assessee on 6.10.1998. During the course of search the assessee was found to be preparing two types of delivery challans. In one type of challan the company's name, phone number, sales-tax number, etc., were mentioned. In another type of challan, only serial number was appearing without the name, etc. of the assessee The Managing Director in his statement admitted that generally for second type of challan, the transactions are not accounted in the books of account. The delivery challans for unaccounted transactions was found for the period 9.9.1997 to 13.1.1998 and 1.1.1998 to 26 9.1998 (89 days). The assessing officer made a comparison....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e also estimated. The unaccounted turnover for the entire block period was estimated. The computation of undisclosed income as per Section l58BBB(1) has to be on the basis of evidence found as a result of search and such other material or information as are available with the assessing officer and relatable to such evidence. Since the assessee has admitted to carrying on transaction outside books of account, the assessing officer had no option but to estimate the income. The assessee admitted having destroyed the slips for unaccounted transactions. However, the fact also remains that at the time of search, no evidence regarding assets/investment are found. Cash found during the course of search is only Rs. 6½ lakhs. As an icing on th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... was admitted to consider the following substantial questions of law on 1.9.2006 : - (1) Whether, the Tribunal was correct in holding that the material seized during search indicting that the assessee had for continuos period of 89 days had been selling goods which were not being accounted for and that the cash of Rs. 6.50 lakhs was also seized and the Managing Directors statement recorded disclosed that such a unaccounted transaction had been canted on for the entire duration of the business which was taken into account for estimating the undisclosed income for the entire block period by the assessing officer which could not be made applicable to the block assessment? (2) Whether the tribunal was correct in holding that only undisclo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gregate of the total income of the previous year falling within the block period and the undisclosed income which is substantiated by the evidence at the time of seizure is to be taken into consideration. Out of the said aggregate income the aggregate of the total income determined in accordance with Section 143 or Section 144 or Section 147 has to be reduced. 9. Therefore, in the entire scheme of arriving at the undisclosed income for the block period there is no scope for estimating the income. It should be on actuals. In other words, the assessing officer cannot estimate the undisclosed income. He has to compute the undisclosed income as provided under Section 158BB (1). If it is a case of estimation of income it falls outside the sai....
X X X X Extracts X X X X
X X X X Extracts X X X X
....capable of one of many meanings. It will take its colour from the context in which it occurs. It bears a very comprehensive meaning, it can comprehend the whole procedure for ascertaining and imposing liability upon the taxpayer. Therefore, under Section 158BB the assessing authority has to compute the undisclosed income falling within the block period. He is not expected to assess the undisclosed income. It is only in the event of assessment of undisclosed income, if accounts books are not available, if accounts books are destroyed, if there is a suppression of actual sales, taking into consideration the totality of the circumstances, the conduct of the parties, the way in which the accounts are maintained and the incriminating materials w....