9911796707
TMI Blog1998 (11) TMI 148X X X X Extracts X X X X X X X X Extracts X X X X ..... notice issued under s. 158BC. The AO completed the assessment determining the total undisclosed income of the block period at Rs. 13,96,100. The additions have been made for the asst. yrs. 1994-95 to 1997-98 mainly as credits, disallowance under s. 40A(3) of the IT Act and also estimated disallowance of commission payments. There is also addition of Rs. 10,000 as disallowance of motor car expenses, treating the same as undisclosed income for the asst. yr. 1994-95, even though the disallowance had been made earlier in the regular assessment completed on 4th March, 1997 under s. 143(3) of the IT Act. The addition as undisclosed income of the block period on account of unproved cash credits, was to the extent of Rs. 3,72,000 as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the CIT, Central, Madras on 20th June, 1997. The learned representative submitted that the AO must have sent the draft assessment order and the file to the CIT, Central, Madras immediately after the receipt of the assessee's letter dt. 13th June, 1997 without proper verification of the facts and applying his mind on the various points as clarified in the letter. It was his contention that the assessee was denied adequate opportunity to present the case, as the AO has to complete the assessment after getting the approval of the CIT before 30th June, 1997. He admitted that confirmation letters to prove the genuineness of some of the credits in the assessee's books of accounts could not be furnished on account of insufficient time available ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re 30th June, 1997, after getting approval of the CIT, Central, Madras. The AO took up the case for hearing and issued a detailed letter to the assessee on 15th May, 1997, asking for clarification on various matters and also evidence in support of the credits appearing in the assessee's books. The assessee gave the reply on 28th May, 1997, clarifying a number of points and stated that in support of the credits totalling Rs. 3,60,000 confirmation letter would be furnished later. Later, the assessee gave another letter on 13th June, 1997 along with which letters of confirmation were filed from 12 persons. From the remaining creditors no letters were filed. The assessee got the confirmation letters from the remaining parties only later, but by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the entire matter afresh. 7. Though on the whole the assessment is to be redone in a proper manner, we would like to make certain observations about the computation of the undisclosed income in this case. For the asst. yr. 1994-95 there is addition of Rs. 10,000 by way of disallowance of car running expenses. From p. 4 of the assessment order it can be seen that there was an earlier assessment for the asst. yr. 1994-95 on 4th March, 1997, wherein Rs. 10,000 had been added as disallowance out of motor car expenses. It is the same addition that had been repeated in the block assessment. The result is that the sum of Rs. 10,000 which has suffered tax at the normal rate in the regular assessment under s. 143(3) is now taxed at the rate of 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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