9911796707
TMI Blog1994 (9) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... e premises of the assessee-company which is engaged in the business of manufacture of iron and steel products. After the search, a settlement was arrived at by the assessee-company with the CIT in accordance with which the assessee offered to tax the excess amounts claimed towards burning loss. The total amount of income thus offered was Rs. 1,46,75,130 spread over a long period covering the assessment years 1976-77 to 1984-85. It is the contention of the assessee that this income was represented by certain assets outside its books, which were found out during the search. In the surtax assessments under consideration, the assessee claimed that the cumulative figures of extra profit in this way disclosed and offered by it for taxation, as at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich the parameters for considering whether concerned amounts would constitute "reserve" had been discussed. The CIT(A) finally came to the conclusion that it was clear from the facts of the case that the assessee's contention was not to be accounted inasmuch as none of the conditions laid down by the Mysore High Court and the Supreme Court for inclusion of certain amounts within "reserve" was satisfied. Finally, the CIT(A) rejected the claim of the assessee. 4. A full fledged representation was made before us by Shri Venkatesan, learned counsel for the assessee on 2-8-1994. He strongly argued that since the amounts under consideration represented the secret profits of the assessee-company, they were required to be included within "reserve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Venkatesan asking for even further adjournment. This was not allowed in view of the fact that the appeals were rather old ones and were also stay-granted appeals. 6. On going through the facts of the case, we find that the assessee wants to take the opportunity of the disclosure made by it of excess claims of burning loss, consequent on the search and seizure proceedings in its premises. Certain amounts already claimed as expenses were declared by it to represent its concealed income and the same were also offered for taxation. No evidence was however led at any stage to show that, the socalled concealed income was retained in the business of the assessee in some form or other. Although the learned counsel for the assessee stated tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any kept outside its books as a general or a specific reserve of the company. The argument taken up by the learned counsel for the assessee that the entire net profit of the assessee had been transferred to general reserve does not hold good in this case inasmuch as the said net profit represented the declared net profit as per the books of the company. Nobody knows what the company should have done about the secret profits kept outside the books. The reliance placed by the learned counsel for the assessee on the three decisions as mentioned above is of no use to the assessee inasmuch as none of the decisions support the assessee's contention that even secret profits kept outside books will also have to be treated as "reserve" without any a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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