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Issues involved: Interpretation of Section 158BC of the Income Tax Act, 1961 in the context of block assessment proceedings based on a search conducted on a taxpayer.
Summary: 1. The Revenue appealed against the Tribunal's decision to delete an addition of Rs. 57,53,250 (actual addition in AO is Rs. 53,57,796) u/s 158BC of the Income Tax Act, 1961. The issue arose from credit balances of sundry creditors reflected in the assessee's balance sheet for Assessment Year 2002-03, which were also part of the regular return filed by the assessee. 2. The Tribunal noted that the credit balances in question were part of the regular return filed by the assessee and were not undisclosed income found as a result of the search. The assessing officer identified certain sundry creditors as bogus due to lack of confirmatory letters, but the CIT (Appeals) and Tribunal ruled in favor of the assessee, stating that these amounts could not be part of the block assessment as they were already disclosed in the regular return. 3. The High Court upheld the Tribunal's decision, emphasizing that the credit balances of sundry creditors were part of the regular return filed by the assessee for the relevant assessment year. Therefore, these amounts could not be included in the block assessment u/s 158BC as they were not undisclosed income discovered during the search. 4. The Court concluded that the appeal did not raise any substantial question of law and dismissed it accordingly.
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