9911796707
TMI Blog2014 (7) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... ate the intention to disclose income most definitely when the same is not disclosed in the returns filed for the concerned assessment years - Non-disclosure of the income received by the assessee by way of salary was required to be treated as “undisclosed income” within the meaning thereof in Section 158B(b) under Chapter XIV-B of the Act liable to tax at 60% - Decided in favour of Revenue. Reduction of addition of unexplained investment – Held that:- At the time of search unexplained investment it was found and even after the search the assessee did not file the return of income and declared the same at the time of filing the return after the block assessment proceedings were initiated - the intention of the assessee is to be presumed that he was not to disclose the income and therefore, the same is required to be treated as undisclosed income within the meaning thereof in section 158B(b) under Chapter XIV-B of the Act - no specific reasons and/or evidence on record to reduce the addition on account of unexplained investment – the Tribunal has materially erred in reducing the addition on account of unexplained investment – Decided in favour of Revenue. - Tax Appeal No.448 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... countant and he was advised that as the assessee had made the investment in FDRs etc. from his salary income and interest income, which can be considered as known sources, the salary and income from other sources can not be treated as undisclosed income. Accordingly, the assessee filed regular return of income of AY 1996-97 and 1997-98 u/S.139(4) of the Income Tax Act, 1961 (hereinafter referred to as Act ) on 30.09.1997 showing salary and income from other sources considering it as normal income. That the Assessing Officer issued a notice under Section 158BC of the Act which was served on the assessee on 09.10.1997. In response to the said notice, the assessee filed the return in Form No.2B on 24.11.1997 showing undisclosed income at Rs.13,64,954/- for the block period and paid full tax at the rate of 60% on this income. The assessment was however, framed by the Assessing Officer at a total income of Rs.18,33,771/- making certain other additions to the income of salary and interest/dividend disclosed by the assessee in the return of undisclosed income. The Assessing Officer also treated the returns of income filed u/S.139(4) of AYs 1996-97 and 1997-98 as invalid as he assessed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee in return of block period ? (c) Whether the Appellate Tribunal is right in law on facts in reducing the addition on account of unexplained investment of Rs. 1,88,884/- to Rs.35,000/- without any evidence ? [3.0] Shri Sudhir Mehta, learned advocate appearing on behalf of the appellant has vehemently submitted that the learned Tribunal has materially erred in not treating the non-disclosure of the income earned by way of salary by the assessee as undisclosed income within the meaning thereof in section 158B(b) under Chapter XIV-B of the Act on the ground that on the aforesaid amount of salary TDS was deducted. It is submitted that as such the aforesaid issue is now not res integra in view of the decision of the Hon ble Supreme Court in the case of Assistant Commissioner of Income Tax v. A.R. Enterprises reported in [2013] 350 ITR 489 (SC). It is submitted that in the aforesaid decision in the case of A.R. Enterprises (Supra), the Hon ble Supreme Court has held that since the tax to be deducted at source is computed on the estimated income of an assessee for the relevant financial year, such deduction cannot result into disclosure of the total income for the relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on which is posed for consideration of this Court is whether non-disclosure of the income by not filing the return of income on which the TDS is deducted, whether the same can be treated as undisclosed income within the meaning thereof in Section 158B(b) under Chapter XIV-B of the Act and for which the block assessment proceedings is permissible or not? [5.2]. Now, the aforesaid issue is not res integra in view of the decision of the Hon ble Supreme Court in the case of A.R. Enterprises (Supra). In the case before the Hon ble Supreme Court, the Hon ble Supreme Court considered the payment of advance tax and tax deducted at source. While dealing with the advance tax, the Hon ble Supreme Court in para 37 to 40 has observed and held as under: 37. We are, therefore, of the view that since the Advance Tax payable by an assessee is an estimate of his current income for the relevant financial year, it is not the actual total income, to be disclosed in the return of income. To repeat, the vital distinction being that the current income is an estimation or approximation, which may not be accurate or final; whereas the total income is the exact income disclosed in a valid retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me for the relevant assessment year. Any anomaly in the return entails serious consequences, which may not otherwise be attracted on estimation of income for the purpose of payment of Advance Tax. It would thus, be difficult to accept the plea that payment of Advance Tax is tantamount to the disclosure of income or that it indicates the intention of the assessee to disclose income. While dealing with the issue whether the tax deducted at source amounts to disclosure of income in paragraphs 42 to 44, the Hon ble Supreme Court has observed and held as under: 42. Lastly, since C.A. No. 2580/2010 refers to a slightly different issue, we deem it fit to record our observations with respect to the same. In this appeal, the issue is whether tax deducted at source (and not payment of Advance Tax) amounts to the disclosure of income. 43. Section 190 of the Act states- 190 (1) Notwithstanding that the regular assessment in respect of any income is to be made in a later assessment year, the tax on such income shall be payable by deduction [12][or collection] at source or by advance payment [13][or by payment under subsection (1A) of section 192], as the case may be, in accordanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /-was found and even after the search the assessee did not file the return of income and declared the same at the time of filing the return after the block assessment proceedings were initiated. Considering the decision of the Hon ble Supreme Court in the case of A.R. Enterprises (Supra), when the return was filed by the assessee after the block assessment proceedings were initiated by the Assessing Officer as observed by the Hon ble Supreme Court in the aforesaid decision, the intention of the assessee is to be presumed that he was not to disclose the income and therefore, the same is required to be treated as undisclosed income within the meaning thereof in section 158B(b) under Chapter XIV-B of the Act. Even as such no specific reasons and/or evidence on record to reduce the addition on account of unexplained investment of Rs.1,88,884/-to Rs.35,000/-. Under the circumstances, the learned Tribunal has materially erred in reducing the addition on account of unexplained investment of Rs.1,88,884/- to Rs.35,000/-. Under the circumstances, the question No. (c) is also answered in favour of the revenue and against the assessee. [6.0] In view of the above and for the reasons stated ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
