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Issues involved:
The judgment involves the issue of addition of cash credits by the Assessing Officer and the subsequent deletion of the same by the learned Commissioner, which was upheld by the Tribunal. The key question was whether the findings recorded by the learned CIT(A) in deleting the addition made by the assessing officer on account of unexplained cash credits were justified in law. Details of the Judgment: Search Operation and Notices u/s 158BD: A search operation was conducted, and notices were issued under Section 158BD. The assessee filed a return in response to the notice declaring nil as undisclosed income. The initiation of proceedings under Section 158BD was challenged on the grounds that regular returns for earlier years had already been filed. Assessing Officer's Findings: The Assessing Officer noted a credit of Rs. 1,00,000 and another credit of Rs. 3,87,000. Out of the latter, Rs. 2,00,000 was explained from a transfer entry, and the remaining Rs. 1,87,000 was added to the income. Additionally, an amount of Rs. 8,000 was also added with no explanation provided regarding its source. Decision of Commissioner and Tribunal: The Commissioner found that the credit entries were part of the details filed by the assessee along with regular returns for the relevant assessment years. Citing precedents, it was held that these entries could not be subject to proceedings under Chapter XIV-B. The Tribunal affirmed this decision, emphasizing that entries in regular books of accounts can be considered under Chapter XIV-B only if not disclosed to the department. Interpretation of Sections 158BA and 158BB: The Court analyzed Sections 158BA and 158BB, highlighting that assessments under Chapter XIV-B are in addition to regular assessments. The undisclosed income for the block period should not include income already assessed in regular assessments. The computation of undisclosed income under Section 158BB involves reducing disclosed income from the aggregate total income of the block period. Conclusion: Since the returns for the relevant year were filed before the search operations, and the income in question was already shown in those returns, it could not be added again during assessment under Chapter XIV-B. The appeal was dismissed, ruling in favor of the assessee and against the Revenue. This judgment clarifies the treatment of disclosed income in regular returns during block assessments and underscores the importance of considering such disclosures in determining undisclosed income for the block period.
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