TaxTMI 
TaxTMI 
2012 (6) TMI 206
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.... after issue of notice and calling upon the assessee to file a return for the undisclosed income for the block period in terms of his order dated: 27,02.2002 had determined such undisclosed income for the different assessment years comprised in the block period on the premise that the books of account which were examined by the Searching Officer at the premises of the assessee during the search, revealed that full particulars of turnover of the assessee in the catering business carried on by it, had not been reflected in the books of account and even before the searching officer, managing partner of the firm had admitted that the firm was not in the practice of entering its entire sale transactions in the books of account, that the entries in the books of account reflected only about 75% of the actual sales/receipts etc. 3. The Assessing Officer had computed the assessment on the following premise. Asstt. Year Accounted Sales as per P & L A/C Estimated Sales (Accounted Sales X 100/60) Unaccounted Sales % G.P. on Accounted Sales Undisclosed Income 1 2 3 4 5 6 1995-1996 50,000 1996-1997 7,929,3....
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.... the Assessing Officer and also contended that the partial relief extended for the other two assessment years i.e. for the assessment year 1997-98 and 1998-99 is not justified, as the regular assessments for these two years, on the basis of the disclosed income of the assessee in the return filed by the assessee for these assessment years. 8. The assessee joined issue not only on this aspect to support the view of the Commissioner of Income-tax (Appeals), but also for a good measure, chose to file a cross-appeal seeking for improvement of the relief in its favour over and above what was given by the Commissioner of Income-tax (Appeals). 9. The Tribunal which heard the appeal and the cross-appeal together allowed the appeal of the revenue in part, but rejected the cross-appeal of the assessee. 10. Cross-appeal of the assessee which relates to the assessment year 1997-98 and 1998-99 and on the premise that addition for this period was not justified as regular assessment had taken place etc, was found to be of no merit as in fact addition for this period was not subject-matter of the block assessment. 11. The Tribunal fixed the estimated undisclosed income by adopting an u....
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....ulars of its income even for this period, i.e., for the period from 01.04.1999 to 81.01.2000 was presumptive and speculative and therefore the block assessment insofar as considering the possibility of undisclosed income for this period is concerned, is definitely not sustainable and that the Tribunal has failed to appreciate this aspect of the matter. 16. The second contention urged is that by assessing the undisclosed income for the period relevant for the assessment year 2000-01, the Assessing Officer has virtually subjected the income attributable to this period to tax twice as the assessee is obliged to file a return and the assessee will be disclosing the income in the regular return and on the regular income it will be again brought to fax subjecting to levy twice the very income once in the assessment for the block period and again in the regular assessment and therefore to this extent levy of tax liability is vitiated and the Tribunal has failed to appreciate this aspect of the matter. 17. Smt. Vani, learned counsel for the appellant has placed reliance on the judgment of the Gauhati High Court in the case of 'Dr. Mrs. Alaka Goswami v. CIT [2004] 268 ITR 178/138 Taxm....
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....regularity or illegality or anything wrong in law in the Tribunal directing the undisclosed income being computed based on the admission made by the very assessee. Insofar as the assessment of profit on the undisclosed part of the income is concerned, making it at 25% cannot be found fault with and it is also not in dispute, particularly when the assessee itself had indicated that the profit margin was around 28%-30% of the sales turnover. 23. Insofar as the submission made by the Sri. Sarangan, learned senior counsel is concerned, it is to be noticed that insofar as the first argument is concerned while it is a fact that the assessee had time to file its return particularly as even the accounting period had not come to an end and that in fact assessee could file a return once the accounting period came to an end the subject-matter of the block assessment period was not the disclosed income or that can be disclosed, but only the undisclosed income even as indicated in Section 158BC of the Act, When the assessee had itself admitted as to what is the extent of such undisclosed income and on the basis of such an admission, if it is computed for the entire block period, one cannot f....