9911796707
TMI Blog2015 (10) TMI 2824X X X X Extracts X X X X X X X X Extracts X X X X ..... egular methodology accepted by the Revenue in the regular assessments. The stand of the Assessing Officer, in our view, leads to an inherent contradiction in the final assessment because the resultant income would be a mix of two methodologies. Firstly, the resultant income contains income from business computed on the basis of regular methodology and secondly, income in relation to undisclosed receipts of the same business, which is assessed on receipt basis. To obviate such inherent contradiction, in our view, assessee- company had rightly asserted at the time of filing of returns of income under section 153A of the Act that the income from undisclosed receipts be also computed as per the regular methodology accepted by the Revenue in the past. Therefore, on this aspect we uphold the plea of the assessee. Addition made under section 69C of the Act for unexplained cash expenditure - CIT-A restricted the addition telescoping benefit against the unexplained expenditure found noted in the search material - HELD THAT:- We do not find any infirmity in the decision of the CIT(A), which is ostensibly based on the facts emerging from the record. Thus, the order of the CIT(A) on this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earch, though in totality there was no difference. The aforesaid difference is the bone of contention between the assessee and Revenue before us. 3. In order to appreciate the controversy, brief background of the dispute can be summarized as follows. At the time of search the additional income was offered for the assessment years 2002-03 to 2007-08 as follows:- Assessment Year Amount (Rs. In Lac) Basis 2002-03 84.51 Gross Receipts 2003-04 220.81 Gross Receipts 2004-05 97.35 Gross Receipts 2005-05 154.00 Gross Receipts 2006-07 115.00 Gross Receipts 2007-08 250.52 Remaining balance out of 10 crores disclosed. Total 922.19 3.1 At the time of search, the amount was disclosed year-wise on the basis of the year of receipt. In other words, undi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see was not accepted by the Assessing Officer, who instead taxed the income surrendered by the assessee on the basis of the year of receipt of such amounts. Accordingly, the assessment finalized by the Assessing Officer for the assessment years 2002-03 to 2007-08 contained assessment of undisclosed receipts as follows:- Assessment Year Amount (Rs. In Lac) Basis 2002-03 84.51 Gross Receipt 2003-04 224.81 Gross Receipt 2004-05 97.35 Gross receipt 2005-06 846.66 Gross Receipt (154.0)+ Sec 69 Unexplained expenditure (690.66) 2006-07 115.00 Gross Receipt 2007-08 8.33 (742.85 on protective) -- Total 1375.66 3.3 Notably, in relation to assessment year 2005-06 the Assessing Officer noticed that the seized record showed receipt of ₹ 140.00 lac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncy. 6. On this aspect, Ld. Departmental Representative appearing for the Revenue has defended the orders of the authorities below by pointing out that the undisclosed receipts found at the time of search ought to be assessed in the year to which they relate. 7. We have carefully considered the rival submissions. The short point involved before us relates to the year of taxability of the undisclosed receipts of business found during the course of search. Section- 4 of the Act prescribes charge of income tax on the total income of the previous year of an assessee and section -5 of the Act postulates the scope of such total income. Notably, the income chargeable under the head profits and gains of business or profession is liable to be computed in accordance with method of accounting prescribed under section 145 of the Act. Therefore, the income chargeable to tax for any particular assessment year under the head profits and gains of business or profession is computed as per the methodology of accounting prescribed in section 145 of the Act. In the present case assessee company is engaged in the business of development of real estate properties and is declaring income from s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee- company had rightly asserted at the time of filing of returns of income under section 153A of the Act that the income from undisclosed receipts be also computed as per the regular methodology accepted by the Revenue in the past. Therefore, on this aspect we uphold the plea of the assessee. 7.1 As a consequence, we set aside the orders of the CIT(A) for all the captioned assessment years and direct the Assessing Officer to recompute the income as per aforesaid directions and as per law. 8. In so far as the appeal of the Revenue for assessment year 2007- 08 is concerned, there is no merit in the same in as much as the CIT(A) has merely deleted the amount assessed by the Assessing Officer on protective basis, even though such amount was assessed in the respective assessment years. Thus, in so far as appeal of the Revenue for assessment year 2007-08 is concerned, the same is dismissed. 9. In assessment year 2005-06, the plea of the Revenue is against the action of the CIT(A) in allowing telescoping benefit against the unexplained expenditure found noted in the search material. In this context, brief facts are that the search material revealed that in assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X
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