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TMI Blog2015 (1) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... search, that an order of block assessment can be passed - no search as such was conducted against the respondent - the proceedings under Chapter XIVB of the Act were initiated against him on the basis of the alleged discoveries in the course of search, conducted in the premises of M/s. Mahaveer Group of Companies - it is quite possible that if a search, conducted against one assessee reflects some facts and figures referable to another assessee, proceedings can be initiated against the latter also - the finding that there was suppression of the sale of gift articles worth ₹ 49,90,175/- by M/s. Mahaveer Group of Companies itself is not well-founded - in their books of account, the transactions were very much reflected - the respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 158BD of the Act was issued to the respondent on 02.09.1996. That was followed by a show cause notice, dated 24.07.1997. Taking into the explanation that was offered by the respondent, an order of block assessment, covering the period 1987-88 to 1997-98 was passed on 30.09.1997. The cost of the gift articles, being ₹ 49,90,175/- was treated as undisclosed income of the respondent and tax at 60% thereon was levied. The respondent filed I.T. (SS) A.No.237/Hyd/1997 before the Hyderabad Bench A of the Income Tax Appellate Tribunal (for short the Tribunal). The appeal was allowed by the Tribunal through order, dated 06.06.2002. Hence, this appeal under Section 260A of the Act by the Revenue. Sri S.R.Ashok, learned Senior ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and thereby, an act of suppression of income, the punitive proceedings under Chapter XIVB of the Act were initiated. She contends that the Tribunal has applied correct principle of law and that no interference is warranted. Making of block assessments is a rare phenomenon. It is only in respect of the assessees who are suspected to have withheld the important information and thereby, the income, that the searches are made. A comparison of what is disclosed in the search on the one hand and what has already been disclosed over the years in the returns on the other, is required to be made. It is only when something which did not form part of the assessments of the earlier years is unearthed or discovered in the search, that the occasion t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isition where such entries result in computation of loss for any previous year falling in the block period; or (B) On the basis of entries as recorded in the books of account and other documents maintained in the normal course on or before the date of the search or requisition where such income does not exceed the maximum amount not chargeable to tax for any previous year falling in the block period; (ca) where the due date for filing a return of income has expired, but no return of income has been filed, as nil, in cases not falling under clause (c); (d) where the previous year has not ended or the date of filing the return of income under sub- section (1) of section 139 has not expired, on the basis of entries relating to such in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Honble Supreme Court in ACIT Vs. HOTEL BLUE MOON 2010 (321) ITR 362 SC as well as several High Courts. This Court in SRINIVASA FERRO ALLOYS LIMITED Vs. ASSISTANT COMMISSIEONER OF INCOME TAX (2014) 368 ITR 424 explained the scope of Section 158BB of the Act and in particular, the scope and ambit of the proceedings under the Chapter in general. It was observed that it is only when some material which did not form part of the books of account, the returns and the corresponding orders of assessment is unearthed in the course of search, that an order of block assessment can be passed. In the instant case, no search as such was conducted against the respondent. The proceedings under Chapter XIVB of the Act were initiated against him o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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