9911796707
TMI Blog2001 (10) TMI 285X X X X Extracts X X X X X X X X Extracts X X X X ..... come returned by the appellant for the asst. yr. 1997-98 amounting to Rs. 47,032 was undisclosed income of the appellant under s. 158BB(1)(c) of the Act. Sec. 158BB only prescribes the method of computing the undisclosed income for the block period. However, prior to making such computation, the existence of undisclosed income as such, is required to be shown. If there is no undisclosed income, the question of application of different clauses of sub-s. (1) of s. 158BB for the purpose of computing undisclosed income for the block period cannot arise. 4. The learned CIT(A) erred in holding that the assessment was not barred by limitation. The learned CIT(A) erred in observing that the search finally concluded on 1st Oct., 1997. As per the Panchnama executed in the assessee's case, the search commenced on 30th Sept., 1997, at 10.00 a.m. and the proceedings were closed on 30th Sept., 1997, at 5.50 p.m. as finally concluded. This would further be fortified by the fact that the block period mentioned in the assessment order is from 1st April, 1987 to 30th Sept., 1997 and not up to 1st Oct., 1997. Since the search was concluded on 30th Sept., 1997, the assessment should have been made o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .75 lakhs was his income. The various facts which transpired during the search i.e. arranging the loan by the appellant, filing of the complaint and the way the same has been taken to the books of M/s Satyabala Financial Services will reveal that the appellant was attempting to suppress the income of Rs. 1.75 lakhs by manipulation. The present explanation of the appellant is not supported by facts and evidence. He has not been able to justify the retraction from his sworn statement. Therefore, I do not find any merit in this ground and sustain the addition." 4. Before the Tribunal the assessee contended that this is the income of M/s Satyabala Financial Services a proprietary concern of his wife Smt. K. Indrani and it was accounted in the books of the said concern. He brought the attention of the Tribunal to the observations of the AO at p. 2 of the assessment order which goes as hereunder: "Shri G. Kanakaraj, the assessee had arranged a loan of Rs. 4.75 lakhs to Shri Dakshinamoorthy and two others from Smt. Krishnammal, wife of retired High Court Judge. When the loan was arranged G. Kanakaraj the assessee has also taken a blank cheque from two guarantors Shri Vanila Arasu and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant for the asst. yr. 1997-98 amounting to Rs. 47,032. This amount was included in the block assessment income as undisclosed income of the appellant under s. 158BB(1)(c) of the Act. 7. This issue was considered by the AO in para No. 4 at p. 5 of the assessment order as under: "The assessee filed his return of income for the asst. yr. 1997-98 outside the time-limit, that is, on 19th Dec, 1997, admitting a total income of Rs. 47,032. This is also brought to block assessment as undisclosed income." Except this observation, there is no other material relied on by the AO for treating this amount as undisclosed income of the block period. Regarding this issue the learned CIT(A) has considered in para 6 onwards in the impugned order as hereunder: "6.1 The AO has added this amount with the observation that the appellant had not filed this return within the time available for the asst. yr. 1997-98 but filed the same only after the search. 6.2 I find that the AO has rightly included this amount under s. 158BB(1)(c). Therefore, I uphold the addition." From these observations also, it is evident that there is no reasoning as to how this amount is an undisclosed income, moreso, whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This would further be fortified by the fact that the block period mentioned in the assessment order is from 1st April, 1987, to 30th Sept., 1997, and not up to 1st Oct., 1997. Since the search was concluded on 30th Sept., 1997, the assessment should have been made on or before 30th Sept., 1999, and consequently the assessment made on 28th Oct., 1999, is time-barred and untenable in law." This ground relates to limitation aspect that was raised before the CIT(A) as additional ground and the learned CIT(A) has considered this issue in the impugned order in paras 8 8.1 as follows: "8. During the course of hearing of the appeal, an additional ground has been filed on 20th March, 2000, mentioning that the assessment is barred by limitation. The contention of the appellant is that the search was concluded on 30th Sept., 1997, and the time-limit for completion of the assessment had expired on 30th Sept., 1999. It is pleaded that the order made on 28th Oct., 1999, is time-barred. 8.1 I find that though the main part of the search was concluded on 30th Sept., 2000, the follow up actions were continued till October, 2000. It cannot be said that the search was concluded only on 30th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present at the time of search in his residential premises. But his wife Smt. K. Indrani was present and that the assessee was present on the day when search was conducted in the proprietrix concern of Smt. Indrani called M/s Satyabala Financial Services and that, that search finally concluded at 4.00 a.m. having been started at 10 a.m. on 30th July, 1997. Thereby the search was finally concluded on 1st Oct., 1997, only. Therefore, the assessment order passed on 28th Oct., 1999, is well within the period of two years provided under the relevant provisions of law. 11. Even assuming that the statement recorded from the assessee while the concern of his wife M/s Satyabala Financial Services- was searched, that the search finally concluded at 4 a.m. having been commenced at 10.00 a.m. on 30th Sept., 1997, can be enforced or relied for framing a block assessment against the said concern M/s Satyabala Financial Services, proprietrix concern of the wife of the assessee. If the Department wants to enforce that statement against the assessment made in the name of the assessee, it has to issue notice under s. 158BD subject to the satisfaction of the concerned authority. But in the present c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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