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TMI Blog2012 (6) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... of the revenue. Appeal dismissed - IT Appeal No. 353 of 2006 - - - Dated:- 28-3-2012 - D.V. Shylendra Kumar and K. Govindarajulu, JJ. G. Sarangan and Smt. Vani H. for the Appellant. E.R. Indrakumar and E.I. Sanmathi for the Respondent. JUDGMENT D.V. Shylendra Kumar, J. The appeal by the assessee a Pantry Car Services firm engaged in the business of providing catering services in Indian Railways. Appeal is directed against the order of the Income-tax Appellate Tribunal allowing the appeal of the revenue in. part which was in turn directed against the order passed by the Commissioner of Income-tax (Appeals) who partly allowed the appeal of the assessee and set aside the earlier judgment by the Assessing Officer as per order dated: 27.02.2002 determining the undisclosed income of the assessee for the block period 01,04,1989 to 07.02.2000 pursuant to a search conducted at the business premises of the assessee on 07.02.2000. 2. The Assessing Officer after issue of notice and calling upon the assessee to file a return for the undisclosed income for the block period in terms of his order dated: 27,02.2002 had determined such undisclosed income for the diffe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liability was Rs. 32,02,922/-. 5. As against this order, assessee preferred an appeal to the Commissioner of Income Tax (Appeals). 6. The Commissioner allowed the appeal in part being of the view that the possible profits of the assessee from the undisclosed income cannot be more than 20% in respect of income attributable for the period relevant to three assessment years, directed deletion of addition as undisclosed income for the period and the Assessing Officer finalized the assessment by taking the undisclosed income for the block period as Rs. 10,72,000/- as against the determination by the Assessing Officer at Rs. 50,00,614/- and also directed the deletion of levy of surcharge at 10% on the tax amount, as surcharge was leviable only after 01.04.2002. 7. As against this order of the Appellate Commissioner the revenue went up in appeal before the Tribunal contending that the Appellate Commissioner was not justified in reducing the undisclosed income computation for the block assessment period and particularly in holding that in respect of the period from 01.04.1999 to the date of search i.e. upto 31.01.2000 which has been considered in two parts by the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return for the same years? 3. Whether the Tribunal was right in holding that the estimated income for the broken period relevant to assessment year 2000-2001 is liable to be considered as undisclosed income includible in the Block Assessment notwithstanding that no return was due as on the date of search (viz., 7-02-2000) and, advance tax in the sum of Rs. 90.000-00?" 14. We have heard Sri. Sarangan, learned Senior Counsel and Smt. Vani appearing en behalf of the appellant and Sri. Indrakumar, learned senior counsel appearing on behalf of the revenue. 15. Mr. Sarangan, learned senior counsel has mainly urged two points. Firstly it is submitted that the Tribunal has failed to appreciate that the assessment of undisclosed income upto the date of search was neither proper nor justified for the reason that a major part of the accounting period corresponding to assessment year 2000-01 in respect of which, there was still time for the assessee to file its return of income and to disclose the full income and in fact even when the accounting period itself had not come to an end, assuming that the assessee would have suppressed particulars of its income even for this period, i. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, no different presumption has been made in respect of this period and the order cannot be termed as either speculative or that it has no base, not can it be argued that it is not based on any material on record. 20. Mr. Indrakumar, learned senior counsel would also urge that the arguments relating to assessment of undisclosed income has resulted in assessing the very income twice, once in the block period and again in the regular assessment is not real; that in fact, it has not happened in the present situation, as the Block assessment is only in respect of the undisclosed income of the assessee and not the disclosed income, 21. We have examined submissions made at the Bar, perused the order of the Tribunal and the record. 22. The Tribunal has interfered on two grounds. Firstly, to ensure that the estimation of the undisclosed income is based on the admission made by the Manager/ Managing partner which is to the effect that the practice of the assessee was to reflect 75% of his business turnover in the books of account. This being supported by the other material found during search and admission also having been made. We do not find any irregularity or illegality or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riod and it is frowned upon in terms of the judgment of the Gauhati High Court and Delhi High Court as cited by the learned counsel appearing: for the assessee. We find that the judgments have no application to the present situation as the subject-matter of the assessment for the block period is only the undisclosed income and no part of the disclosed income is made the subject-matter. 26. A perusal of the assessment year makes it very clear and undisclosed income being taken at 25% over and above the disclosed turnover attributable to the turnover as reflected in the books of account and that being an admission of the assessee and the profit worked out at 25% on the undisclosed turnover, there is absolutely no scope to contend that the same income has been subjected to tax twice i.e., once during the regular assessment and again in the block period Argument proceeds on an erroneous and incorrect premise and therefore cannot succeed. 27. Insofar as the rejection of the cross-appeal of the assessee before the Tribunal is concerned and the appeal of the assessee insofar as this question is concerned, though no separate appeal is filed on this aspect but nevertheless we find t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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