TaxTMI 
TaxTMI 
2004 (12) TMI 36
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....the income-tax authorities in Koorg District in Karnataka State. The appellants, on the other hand, were residents of Mattannur, in Kannur District. A search was conducted in the business premises and the residence of Kader Haji on November 22, 1995, in which various incriminating documents, investment details and account books relating to the appellant-assessees were seized. In the course of examination Kader Haji explained that investment in the names of his sons, all undisclosed investments and other outgoings shall be considered separately in their assessments. Hence notices were issued to the sons under section 158BD of the Income-tax Act. In response thereto, the assessees-appellants filed returns for the block period in Form No. 2B declaring the undisclosed income as "nil". The appellants are partners in the firms, M/s. Safa Wood Industries, Mattannur, M/s. Cresent Medicals and M/s. Kayvee Associates, Medikara. They are also partners in KVKM Enterprises, Bangalore. In the course of the assessment, the assessee also furnished statement of wealth relevant to the period included in the block assessment. The assessee's various investments and sources were also scrutinised. Afte....
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....e-tax Act. According to the appellant the following substantial questions of law arise for consideration: (i) Was the Appellate Tribunal correct in law in not holding that the block assessment initiated under section 158BC read with section 158BD on the appellant is bad in the eye of law being violative of section 127 of the Act? (ii) Was the Appellate Tribunal correct in law in not holding that the Deputy Commissioner of Income-tax, Central Circle, Calicut, cannot assess the appellant under block assessment based on another person's income? (iii) Was the Appellate Tribunal correct in law in ratifying the block assessment made on the basis of cash flow statement called for from the appellant? Is not the block assessment based on cash flow statement one which is contrary to the provisions of section 158B and section 158BB of the Act? (iv) Was the Appellate Tribunal correct in law in not holding that the computation of capital gains of the appellant is different from his father, Kader Haji is bad in law and that the capital gains for the year 1996-97 cannot be treated as undisclosed income for that year as the relevant previous year was yet to end at the particular point of tim....
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.... including the undisclosed income for the block period: Provided that no notice under section 148 is required to be issued for the purpose of proceeding under this Chapter: Provided further that a person who has furnished a return under this clause shall not be entitled to file a revised return: (b) the Assessing Officer shall proceed to determine the undisclosed income of the block period in the manner laid down in section 158BB and the provisions of section 142, sub-sections (2) and (3) of section 143, section 144 and section 145 shall, so far as may be, apply; (c) the Assessing Officer, on determination of the undisclosed income of the block period in accordance with this Chapter, shall pass an order of assessment and determine the tax payable by him on the basis of such assessment; (d) the assets seized under section 132 or requisitioned under section 132A shall be dealt with in accordance with the provisions of section 132B. 158BD. Undisclosed income of any other person. - Where the Assessing Officer is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under section 132 or whose books of account or oth....
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....aji-the original assessee was a timber merchant having business interests in Mattannur in Kerala and in Mercara in Karnataka State and that a search was conducted on November 22, 1995, in his residence and business premises and consequent on such search under section 132 of the Income-tax Act, in order to facilitate effective and co-ordinate investigation, by proceedings dated February 28, 1996, the Chief Commissioner of Income-tax, Bangalore, Karnataka, in exercise of his powers under section 127(2), transferred all the cases of the said assessee to the jurisdiction of the Assistant Commissioner of Income-tax (Investigation), Circle, Calicut, whereupon that authority issued notice under section 158BC to file a return setting forth the total income including undisclosed income for the block period. Kader Haji filed writ petitions before the Karnataka High Court, challenging the order passed by the Chief Commissioner of Income-tax, Bangalore, contending that the show-cause notice issued by that authority did not contain the entire reasons which prompted them to pass the impugned order. The High Court dismissed the writ petition and the appeals filed therefrom also ended with the sam....
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....ssessment" would fall within the expression "case" enabling the Commissioner to transfer those cases relating to block assessment to the subordinate officer. The same argument is reiterated and learned counsel for the assessee would contend that section 158BD of the Income-tax Act contemplates the handing over of the documents to the Assessing Officer having jurisdiction over such other person and hence according to him, the officer who conducted the search and the officer to whom the files are handed over in the case of the other person must be a different officer and even though the transfer in the case of Kader Haji is sustained by this court, according to him, he is not raising any ground as against the transfer as such in the case of the appellant; but would contend that the order transferring the case by the Chief Commissioner of Income-tax, Bangalore, to the Assistant Commissioner of Income-tax, Investigation Circle-I at Calicut, will only enable the officer to complete the assessment in any particular year; but not to make any block assessment. We find no force in this contention. Section 158BD only enables the officer who conducted the search in the case of a person to h....