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TMI Blog2009 (12) TMI 950X X X X Extracts X X X X X X X X Extracts X X X X ..... ther on the facts and in the circumstances of the case the order of the quasi judicial authority like the Tribunal is not wholly vitiated when it falls to consider a crucial question of fact like the filing of the annual returns before the RoC which is urged by the appellant in support of its claim that the regular books of accounts were maintained before the date of search in the normal course of business especially when the plea for relief of the appellant is turned down on the alleged ground by it that books of accounts were not so maintained ? 2. Whether on the facts and in the circumstances of the case the appellate order of the Tribunal is perverse on the ground that it relied upon a totally absent alleged admission by an unnamed per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me to be filed by the assessee in response to the notice issued under s. 158BC on 13th July, 2001 as the assessee had not filed returns of income for the asst. yrs. 1992-93 to 2000-01. 3. The assessee is a manufacturer of Indian made foreign liquor and search was carried out on 18th Jan., 2001 by the respondents. After issuance of notice under s. 158BC as referred to supra and filing of the return of income, the same came to be processed by the AO under s. 143(3) r/w s. 15BBC of the IT Act, 1961 (hereinafter referred to as 'the Act' for brevity) and on the basis of certain credits found during the course of search, petitioner offered for tax in a sum of ₹ 140 lakhs. However, while filing the return, a sum of ₹ 45,50,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income and it works out to ₹ 1,20,63,124. The aggregate of the losses for the block period based on the books is ₹ 1,21,85,758 as per s. 158BB(1)(c) and the income for the asst. yrs. 1996-97 and 1998-99 are taken as nil in view of the provisions of s. 158BB(1)(ca). Therefore following the principle laid down in the s. 158BB(1), the undisclosed income of the block period works out to ₹ 2,42,48,882." 4. The appellate authority on considering the contentions raised in the appeal memo did not agree with the same and by order dt. 31st Jan., 2004 dismissed the appeal and confirmed the findings of the AO. 5. Aggrieved by the said order, the assessee filed further appeal before the Tribunal, Bangalore Bench in IT(SS)A No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for the purposes of computing of total undisclosed income which has been assessed in the block assessment. 8. Per contra, Sri M.V. Seshachala, learned counsel appearing for the respondent in support, of the order of the authorities and the Tribunal would submit that the evidence found as a result of search showed huge advances, share application money received and such undisclosed income is to be reduced by the income or loss and the increase by losses would arise only while computing the aggregate of the total income and such losses are reduced. In view of the return having been filed, the income declared for such years are to be ignored which has been done in the instant case by the AO and thus the AO was justified in rejecting the cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to as on date the books are computerised and available with us." 10. During the course of arguments it was brought to the notice of this Court that in almost identical circumstance, the Hon'ble Supreme Court in the case of E.K. Lingamurthy v. Settlement Commission (IT & WT) [2009] 222 CTR (SC) 1 : [2009] 19 DTR (SC) 99 : [2009] 314 ITR 305 (SC) has held that in computing of undisclosed income for the block assessment resulting on account of search and seizure, the brought forward loss and unabsorbed depreciation are required to be set off and is permissible by examining s. 158BBC(4) Expln. (a) of the Act and accordingly, held as follows : "In this case, we are concerned with the computation of 'undisclosed income' u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n had erred in disallowing the application of the assessee for set off of inter se losses and depreciation accruing in any of the previous years in the block period against the income returned/assessed in any other previous year in the block period." 11. We find from the order-sheet that the substantial questions of law have been formulated as enumerated hereinabove and we find that in view of the submissions made by the learned counsel for the parties and the judgment of E.K. Lingamurthy ( supra) that the substantial question of law requires to be reframed and accordingly, it is refrained as follows : "Whether the AO was correct in rejecting the claim of the assessee that set off of loss and unabsorbed depreciation is to be red ..... X X X X Extracts X X X X X X X X Extracts X X X X
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