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2006 (3) TMI 86 - MADRAS HIGH COURTUndisclosed income - Whether the Tribunal is right in confirming the disallowance of supervisory charges, which were duly recorded in the accounts regularly maintained by the appellant and which were not seized or requisitioned either under section 132 or section 132A?- In the absence of a finding that the said expenditure is bogus or false, the Revenue cannot treat the same as undisclosed income. The order of the block assessment was passed before the amendment, but when the Tribunal passed the order, the definition of undisclosed income was amended by the Finance Act of 2002 w.e.f. July 1,1995. Unfortunately, the Tribunal did not give any factual finding whether the claim of supervisory charges is a bogus one or not. Even taking into account the amended provision, mere disallowance made under section 40A(2) could not be treated as undisclosed income. The scope of section 40A(2) is to disallow only unreasonable or excessive payments in computing the income of the assessee. - therefore, we answer the question in favour of the assessee
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