9911796707
TMI Blog2006 (1) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... remises of the respondent, Shri Purushottam Khatri, Shri C.L. Khatri and their group during October 18, 1996, to October 30, 1996. Thereafter, block assessment was made under section 158BC read with section 143 by the Assessing Officer on October 29, 1997 for the block period April 1,1986 to October 18,1996 determining the total undisclosed income of the respondent as Rs. 7,22,537. Aggrieved by the said assessment, the respondent filed an appeal before the Income-tax Appellate Tribunal, Indore Bench, Indore (for short "the Tribunal"). By order dated December 11, 2000, the Tribunal held that if the total income for those years in which the returns were not filed before the search remained below the taxable income after deduction claimed unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision and thereby deleting the addition of Rs. 2,24,213 being interest earned on FDRs?" On the first substantial question of law, Mr. Rohit Arya, learned senior counsel for the appellant, very fairly submitted that section 158BB of the Act has been amended by the Finance Act of 2002 with retrospective effect from July 1, 1995 and the effect of such amendment is that the undisclosed income for the block period will be the aggregate of the total income of the previous years falling within the block period computed in accordance with the provisions of the Act including the provisions of section 80L of the Act as reduced by the aggregate of the total income or, as the case may be, as increased by the aggregate of the losses, of such previous y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome earned on the NRE FDRs by the respondent are exempt as per the provisions of section 10(4) (ii) of the Act. He further submitted that the copy of the assessment order in the case of Prakash Chotrani for the block period 1987-88 to 1997-98 filed along with the reply of the respondent as annexure R/18 would show that the Assessing Officer has held that such interest income on FDRs in NRE accounts under section 10(4) (ii) of the Act is allowable. The Assessing Officer found that there are three FDRs in the name of the respondent, of the value of Rs. 2,39,463, Rs. 1,02,368 and Rs. 2,88,167. The Assessing Officer found that the source of the FDR of Rs. 2,39,463 was a fixed deposit of Rs. 50,000 which was made from money lying in deposit i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest income earned on the NRE FDRs by the respondent from the undisclosed income for the block period. In our considered opinion, the view taken by the Tribunal is correct. Section 10(4)(ii) is quoted hereinbelow: "10. In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included-... (4)(ii) in the case of an individual, any income by way of interest on moneys standing to his credit in a Non-resident (External) Account in any bank in India in accordance with the Foreign Exchange Regulation Act, 1973 (46 of 1973), and the rules made thereunder: Provided that such individual is a person resident outside India as defined in clause (q) of section 2 of the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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