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2014 (11) TMI 482 - DELHI HIGH COURTWhether the amount brought to tax by the AO is not undisclosed income – Amount deposited with bank taxable as income or not – Held that:- Shailendra Mahto, Suraj Mandal and Simon Marandi had never filed income tax returns u/s 139 of the Act between 1st April, 1986 and 26th April, 1996 - They were never assessed to tax for the period - Shailendra Mahto, in fact, did not file returns even on issue of notice u/s 158BC of the Act - The block assessment orders in the case of individual assessees would show that the major and substantial amount of undisclosed income relates to the period between 1st April, 1993 and 31st March, 1994 - sub-clause (ca) of Section 158BB(1) would be applicable as no return of income was filed by the individual asseessee before the due date of filing of return - The income returned accordingly would be treated as NIL inspite of the entries, if any, in the books of accounts or documents - Shibu Soren had filed return for the assessment year 1994-95 on 31st March, 1996, but this would be a return u/s 139(4) of the Act which permits filing of a belated return, but it would not be a return u/s 139(1) of the Act - this return cannot be treated as a return filed before the due date. Whether additions made relate to undisclosed income – Held that:- The Tribunal has only decided the second aspect, i.e. whether or not the deposits in Punjab National Bank, Naoroji Nagar, New Delhi could have been made subject matter of addition as undisclosed income in the block assessment proceedings - the assessees throughout had pleaded and claimed that the money deposited in the bank accounts did not belong to them but was money of JMM - there is a fundamental fallacy in the reasoning given by the Tribunal to hold that no addition could have been made in the block assessment proceedings for want of undisclosed income - The Tribunal ignored the position that the four individual assessees had not filed returns of income and therefore, Section 158BB(1) clause(ca) of the Act would be attracted - the factum that the details of SB A/cs and the FDRs were made available would not make any difference - The search undertaken had revealed several incriminating evidence/material relating to the opening and operation of bank accounts and on how the money was utilized, etc. - These details were relevant to examine and consider the contention of the respondent individual assessee that the money did not belong to them but to the political party, JMM - It would be incorrect or improper to state that the search did not reveal or unearth relevant material or evidence relating to undisclosed income as defined u/s 158B(b) of the Act. In the case of JMM notice u/s 158BD read with Section 158BC of the Act was issued and there was also a search of the premises of M/s Anjali Jain and Associates, Chartered Accountant and Auditor of JMM where books of accounts and other documents were found and seized. Subsequently, during investigation, statements of different persons referred to above, were recorded to ascertain and decipher whether the money deposited in the bank accounts had any connection or belonged to JMM or the said money was undisclosed income of the individual assessees - Assessment in the hands of JMM was on a protective basis - The Tribunal has not considered and examined the said evidence and has also not gone into the question whether and if in case no addition could be made in the hands of the individual assessee, substantive addition on the basis of the said evidence or material could be sustained in the hands of JMM - in case substantive addition in the hands of the individual assessee stands finally affirmed, the protective addition in the hands of the JMM would dissipate and would not be sustainable - there was no undisclosed income which could be made subject matter of block assessment and additions, if any, could be made only in the regular/normal assessment - the Tribunal has not gone into and examined the merits - Thus, an order of remand would be justified and is required as other issues on merits etc. have to be examined – Decided in favour of revenue.
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