9911796707
TMI Blog2007 (5) TMI 637X X X X Extracts X X X X X X X X Extracts X X X X ..... ch and seizure operation under section 132 of the Act was conducted in the case of the assessee and consequent to this search, proceedings under Chapter XIV-B of the Act were initiated against the assessee for the block period 1-4-1985 to 15-9-1995 and notice under section 158BC of the Act was issued on 29-2-1996 requiring the assessee to file the return of income. The assessee filed the return declaring the undisclosed income of ₹ 50 lakhs for this block period. 3. During the course of assessment proceedings, it was noted that the assessee is running the business on the basis of loans taken from various parties/banks. The examination of the documents/seized documents showed that the assessee was introducing money mainly through th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing the completed contract method, therefore, the Assessing Officer held that the component of interest requires to be recalculated and thus, disallowed a sum of ₹ 50 lakhs on account of interest. 5. Aggrieved from the order of the block assessment, the assessee filed an appeal before the Tribunal. The Tribunal vide its impugned order deleted the addition of ₹ 96,72,125 and also deleted the addition of ₹ 50 lakhs made by the Assessing Officer with regard to the interest amount. 6. Being dissatisfied with the order of the Tribunal, the revenue has filed the present appeal. 7. It has been contended by the learned counsel for the revenue that the information furnished by the assessee was not supported by document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty reads as follows :- (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 the Act. 10. It is clear from the above definition that the income or the property, which has been disclosed or would have been disclosed for the purpose of this Act, does not form part of the undisclosed income for purpose of block assessment. Under the provisions of Chapter XIV- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income, which has been detected as a result of search. As the statutory provisions go to show, it is not intended to be a substitute for regular assessment. Its scope and ambit is limited in that sense to materials unearthed during search. It is in addition to the regular assessment already done or to be done. The assessment for the block period can only be done on the basis of evidence found as a result of search or requisition of books of account or documents and such other materials or information as are available with the Assessing Officer. Evidence found as a result of search is clearly relatable to sections 132 and 132A. (p. 145) 14. Thus, we hold that there is no basis for making an addition on account of undisclosed income in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebited was false. The claim of the assessee that no such interest was ever debited for the assessment year 1995-96 is also correct. 17. In the present case, there is no specific finding by the Assessing Officer that the claim or deduction of interest has been made of such sums which claims have been found to be false. It is also not clear from the record as to how the Assessing Officer has arrived at the figure of ₹ 50 lakhs with regard to the interest in this case. Thus, the Tribunal has rightly held that the sum added of ₹ 50 lakhs is beyond the scope of Chapter XIV-B of the Act and, therefore, it rightly deleted the same. 18. The above being the position, no fault can be found with the view taken by the Tribunal. Thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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