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TMI Blog2015 (8) TMI 991X X X X Extracts X X X X X X X X Extracts X X X X ..... income already given by the assessee to the Department much prior to conduct of the search, as is so in the present case, the same cannot be termed as undisclosed income. It is not disputed by either of the parties that search was conducted by the Department on 29.05.2001, whereas disclosure by way of information or by way of filing of the return of income (both on 20.08.1998) was already there with the Department, which was given by the assessee nearly three years prior to the search. In fact, it was that very communication of the assessee dated 20.08.1998 which was the basis on which the Department claims the said income to be an undisclosed income. We cannot thus accept the situation where the very communication of the assessee disclosing certain information regarding its income to the Department itself is treated as undisclosed income of the assessee, attracting the provisions of Chapter XIV-B of the Act. - Decided in favour of assessee. - ITA No.191/2009 - - - Dated:- 4-8-2015 - Vineet Saran and B Manohar, JJ For The Appellant : Sri K V Aravind, Adv. and Sir G Kamaladhar, Adv. For The Respondent : Smt Jinita Chatterjee, Adv., for Sri S Parthasarthy JUDGEMENT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax @ 60% plus surcharge of 2%, along with interest. Challenging the said order, the assessee filed an appeal before the Commissioner of Income Tax, which was dismissed by order dated 15.03.2007. Aggrieved by the said order of the Appellate Commissioner, the assessee filed a further appeal before the ITAT, which has been allowed by order dated 30.04.2008. Challenging the said order, this appeal has been filed by the Revenue and has been ADMITTED on the following substantial question of law: Whether the Tribunal was correct in holding that a sum of ₹ 88,00,505/- claimed by the assessee as earned from export of exhibition rights of cinematographic films would not constitute undisclosed income as per Section 158B(b) of the Act as the said amount has been declared in the regular return of income for the assessment year 1994-95 filed belatedly without noticing that the return is treated as non-est of law? 4. We have heard Sri K.V.Aravind, learned counsel for the appellants as well as Smt.Jinita Chatterji, learned counsel for the respondent at length and perused the record. 5. The submission of learned counsel for the appellants is that disclosure of income referred to u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alt with while dealing with their submissions. 8. Chapter XIV-B deals with Special Procedure for Assessment of Search Cases. Section 158B gives the definitions of certain terms for the purpose of the said chapter. Sub-section(b) of the said Section defines undisclosed income which is as under: 158B(b) : undisclosed income includes any money, bullion, jewellery or other valuable article or thing or any income based on any entry in the books of account or other documents or transactions, where such money, bullion, jewellery, valuable article, thing, entry in the books of account or other document or transaction represents wholly or partly income or property which has not been or would not have been disclosed for the purposes of this Act or any expense, deduction or allowance claimed under this Act which is found to be false. The said definition may be simply read as to mean that an undisclosed income would include any money, bullion, jewellery or other valuable article or thing or any income which has not been or would not have been disclosed for the purposes of the Act. Meaning thereby, if the search is conducted after the filing of return, what has to be considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such communication by the assessee to a third party from which it had got the information regarding such income. It is also not a case where the assessee was trying to conceal any information from the Department but on the other hand it was that very communication dated 20.08.1998 of the assessee to the Department which is the basis of treating the income of ₹ 88,00,505/- as undisclosed income of the assessee. From the facts of the case it appears that there was a confusion in the mind of the assessee (whether it be a genuine one or not) regarding his income of ₹ 88,00,505/- derived from export, being taxable or not. For such reason, the said income was initially not offered to tax. However, it is not disputed that the assessee had himself gone to the Department disclosing such income, initially by way of a disclosure under the VDIS on 30.12.1997 and then by filing a return on 20.08.1998, preceded by his communication dated 20.08.1998, which formed the basis of the notice under Section 158BD of the Act. 11. We have to consider the definition of undisclosed income in the light of the aforesaid facts. In the facts as narrated above, in our view, it cannot be said th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of A.R.Enterprises (supra) would not apply to the present case. 13. In the present case, the disclosure by the assessee had been made to the Department by way of a disclosure under the Scheme (VDIS) of the respondent as well as by its communication dated 20.08.1998 and also the return of income filed by the assessee on the same date, which was duly acknowledged by the Department and hence it cannot be said that there was no disclosure of such income made by the assessee prior to the search conducted by the Department. 14. Learned counsel for the respondent has relied on two decisions of Madras High Court (i) The Commissioner of Income Tax vs- P.S.Mani (Tax Case (Appeal) No.549/2007 and (ii) The Commissionerof Income-Tax vs- J.K.Narayanan (2007) 293 ITR 179 wherein it has been held that keeping in view the provisions contained in Section 158B(b) of the Act, the belated returns, which had been filed by the assessee, even though invalid, contained information showing the earning of the corresponding income and such information having been imparted by the assessee to the Assessing Officer long before the search, it would not be proper to hold that there was any undisclosed i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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