2004 (9) TMI 77 - HC - Income Tax

Block assessment under section 158BC(c) search - additions of Rs. 1,54,07,808 and Rs. 59,67,500 as unexplained investments - Tribunal is right in holding that no case for rectification had been made out. It is not in dispute that the addition of Rs. 59,67,500 was on account of capital employed in the liquor business and no separate addition had been made on account of peak credit in 21 bank accounts. It is also not denied that the interest income of Rs. 2,52,370 and Rs. 2 lakhs was liable to tax. In this view of the matter, no fault can be found with the order of the Tribunal in assessing the interest income separately in addition to the amount of Rs. 59,67,500. - We, therefore, find no merit in this appeal and dismiss the same in limine.

Summary

Issues:
Appeal under section 260A of the Income-tax Act, 1961 against the order of the Income-tax Appellate Tribunal for rectification of its order relating to block assessment years 1987-88 to 1997-98.

Analysis:
The High Court judgment dealt with an appeal filed by the assessee under section 260A of the Income-tax Act, 1961 against the order of the Income-tax Appellate Tribunal. The Assessing Officer had made additions of unexplained investments during block assessment under section 158BC(c) of the Act. The Tribunal upheld the addition related to the peak investment made in the liquor business and calculated the peak amount in undisclosed bank accounts. The assessee later filed an application for rectification, claiming a mistake in the calculation of peak amount in bank accounts. The Tribunal rejected this application, stating that the addition was on account of capital employed in the liquor business and no separate additions were made for bank account peaks. The High Court agreed with the Tribunal, emphasizing that the interest income was liable to tax and no modification was warranted. The Court found no fault in separately assessing the interest income along with the unexplained investment amount.

The High Court thoroughly examined the records and concluded that the Tribunal's decision was correct. It was established that the addition of a specific amount was related to capital employed in the liquor business, and no separate addition was made for peak credit in bank accounts. The interest income, as highlighted by the assessee, was indeed taxable. Therefore, the Court upheld the Tribunal's decision, stating that no error was apparent in separately assessing the interest income along with the unexplained investment amount. Consequently, the appeal was dismissed in limine, indicating that no merit was found in the appeal.