1999 (11) TMI 874 - AT - Income Tax

Summary

Issues Involved:
1. Addition on account of low household withdrawals.
2. Deduction u/s 80HHC.
3. Alternative deduction u/s 80-O.

Summary:

Issue 1: Addition on account of low household withdrawals

The assessee contested the addition of Rs. 1,18,891 by the Assessing Officer (AO) for alleged inadequate household withdrawals. The tribunal found that no material evidence was discovered during the search to justify this addition. The AO's inference was based on a comparison of household expenses in different years, which was deemed insufficient. The tribunal concluded that the addition was made on surmises and conjectures, thus deleting the addition of Rs. 1,18,891.

Issue 2: Deduction u/s 80HHC

The AO disallowed the deduction u/s 80HHC of Rs. 84,36,746 in the block assessment. The tribunal clarified that the block assessment is meant to assess undisclosed income detected as a result of search, not to make a regular assessment. Since the assessee had already filed a return for the relevant assessment year and the issue of deduction u/s 80HHC was pending in regular assessment, it should not have been dealt with in the block assessment. The tribunal directed the AO to reduce the income determined in the block assessment by the amount assessed in the regular assessment, thereby deleting the disallowance of deduction u/s 80HHC from the block assessment.

Issue 3: Alternative deduction u/s 80-O

The assessee alternatively claimed deduction u/s 80-O. The tribunal examined whether the income received from Star TV for telecasting rights of films qualified for deduction u/s 80-O. It was determined that the telecasting rights did not constitute a patent, invention, model, design, secret formula, or similar property right, nor did it involve providing information concerning industrial, commercial, or scientific knowledge, experience, or skill. Consequently, the claim for deduction u/s 80-O was rejected.

Conclusion:

The appeal against the block assessment was allowed, and the appeal against the regular assessment was partly allowed.