2013 (10) TMI 1023

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....unal was justified in holding that income unearthed or detected during the course of a search cannot be assessed in the block assessment on the ground that the assessee has disclosed the transactions in the regular books of account?" A search and seizure operation was conducted under section 132(1) of the Income-tax Act, 1961 ("the Act") in the residential premises of the assessee on January 3, 1996. The assessee is the managing director of two private limited companies whose business premises were also covered by the search operations. After the search and seizure, a notice under section 158BC of the Act was issued to the assessee for filing a return of income for the block period April 1, 1985, to January 3, 1996. The assessee co....

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....ncome of the assessee. The Tribunal came to the conclusion that the provisions of Chapter XIV-B of the Act would not be attracted to the present case. The information or details on the basis of which the Assessing Officer passed the assessment order were already furnished to him and were available in the balance-sheets or books of account maintained by the assessee in the normal course of business. All the unexplained credits and the interest accrued thereon were disbelieved by the Assessing Officer who could have otherwise examined their genuineness in the normal course of assessment. The appeal was accordingly allowed by the Tribunal. Learned counsel for the assessee has referred to two decisions in support of his case and in fact, ....

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.... [2001] 249 ITR 501 (Bom). Undisclosed income has been defined in section 158B(b) of the Act as follows :          "undisclosed income' includes any money, bullion, jewellery or other valuable article or thing or any income based on any entry in the books of account or other documents or transactions, where such money, bullion, jewellery, valuable article, thing, entry in the books of account or other document or transaction represents wholly or partly income or property which has not been or would not 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." The above provision makes it clear that undisclosed ....

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....h has been detected as a result of search. It is not intended to be substitute for regular assessment. Its scope and ambit is limited in that sense to materials unearthed during search. It is in addition to the regular assessment already done or to be done. The assessment for the block period can only be done 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 the Assessing Officer. Therefore, the income assessable in block assessment under Chapter XIV-B is the income not disclosed but found and determined as the result of search under section 132 or requisition under section 132A of the Act." (emphasis is supplied) In the prese....