1999 (7) TMI 110 - AT - Income Tax

Summary

Issues Involved:
The appeal concerns the addition of undisclosed income by the Assessing Officer and the applicability of Chapter XIV-B of the Income-tax Act, 1961 to the case.

Issue 1 - Addition of Undisclosed Income:
The Assessing Officer made an addition of Rs. 2,00,000 as undisclosed income of the assessee based on a search and seizure operation under section 132. The assessee objected to this addition, arguing that the amount cannot be treated under Chapter XIV-B of the Income-tax Act.

Issue 2 - Scope of Assessment under Chapter XIV-B:
The dispute revolves around whether the excess stock found during a survey at the business premises of the assessee can be assessed under Chapter XIV-B. The counsel for the assessee contended that the action under section 133A, which led to the stock difference, falls outside the scope of Chapter XIV-B, which specifically pertains to undisclosed income resulting from searches under sections 132 and 132A.

Judgment:
The Tribunal analyzed the provisions of section 158BA(1) and concluded that only actions under sections 132 and 132A are to be considered for assessing undisclosed income under Chapter XIV-B. As the excess stock was already reflected and assessed under regular assessment, it cannot be taxed again under Chapter XIV-B. The Tribunal distinguished a previous decision cited by the Departmental Representative, emphasizing that the amount offered by the assessee during assessment proceedings and not challenged in the appeal cannot be treated as undisclosed income. Consequently, the impugned addition of Rs. 2,00,000 was deemed unjustified and deleted, leading to the allowance of the appeal.