TMI Blog2013 (8) TMI 635X X X X Extracts X X X X X X X X Extracts X X X X ..... the findings of the Assessing Officer, at the outset, that the assessee has not maintained the regular books of accounts for the assessment year 1998-99, ignoring the fact that the assessment for the assessment year 1998-99 was completed under Section 143 (3). The A.R., however, could not explain the amount of Rs.10,000/-, Rs.15,000/-, Rs.7100/- and Rs.5000/- totalling Rs.1,27,100/-, which was not entered in the regular books of accounts and which was treated as undisclosed income. The assessee had maintained account on computers and that notice in Register A-10 sufficiently explained the entries except an amount of Rs.1,27,100/-, which was treated to be undisclosed income found during the course of search – Decided against the Revenue. - Income Tax Appeal No. - 28 of 2013 - - - Dated:- 24-7-2013 - Hon'ble Sunil Ambwani And Hon'ble Surya Prakash Kesarwani,JJ. For the Appellant : Shambhu Chopra For the Respondent : Rahul Agrawal ORDER We have heard Shri Sambhu Chopra, learned counsel for the income tax department. Shri Rahul Agrawal appears for the respondent assessee. This income tax appeal under Section 260-A of the Income Tax Act, 1961 arises out of judgme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19,08,845/- and Rs. 58,95,209/-, to Rs. 2,25,422/-, Rs. 8,78,569/-, Rs. 10,65,148/-, Rs.63,42,895/- and Rs. 16, 42, 908/- respectively and enhanced the addition of Rs. 94, 73,189/- to Rs. 1,04,98,275/-. The CIT (A) has also restricted the addition of Rs.59,45,386/- made by AO to Rs.34,99,396/- considering that 5000 bags were spoiled (rotted) and held that no separate addition is required to made for this amount. The appeals were filed both by revenue and the assessee. The ITAT restricted the addition made by A.O. of Rs.94,73,189/-, and enhanced to Rs.1,04,98,275/- by CIT (A), to Rs.1,27,100/-. The ITAT held:- "All the entires as given in Annexure A-10 cannot be regarded to be the undisclosed income of the assessee in the view of the definition of the undisclosed income given under section 158B(b). Since the entries relating to the sum of Rs.1,27,100/- are not recorded in the regular books of accounts, only that sum can be regarded to be the undisclosed income of the assessee. Accordingly, we reduce the addition of Rs.1,04,98,275/- to Rs.1,27,100/-. Thus ground nos 3 in assessee's appeal stand partly allowed and no separate addition is sustained on the basis of Annexure A-53." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceipt amounted to Rs.54,35,755/- against disclosed hire charges at Rs.39,32,202/-, on which the additional hire rent was quantified to Rs.15,03,553/- and added to the income of the assessee for A.Y. 1999-2000. During the period relevant to A.Y. 2000-01 the storage capacity of Das cold storage had increased and the same was evidenced by various seized registers which shows booking of 303395 bags. This shows a total rent of Rs.1,97,20,675/- against the disclosed rent of Rs.78,11,830/- Therefore, the additional hire rent comes to Rs.1,19,08,845/- and was added to the income of the assessee for A.Y. 2000-01. The storage of potatoes in K.P. Cold Storage was to the extent of 154403 bags. The same would give a storage rent of Rs.1,00,36,195/- against the disclosed rent of Rs.41,40,987/- and thus the additional hire rent comes to Rs.58,95,208/- and was added to the income of the assessee for A.Y. 2000-01. We have gone through the orders passed by the CIT (A) and ITAT and find that ITAT has given good and sufficient reasons to record findings that though the block period is of 10 years, the current year in the case will relate to 1.4.1999 to 16.2.2000, which clearly denotes that book ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business purpose or not, whether these advances were duly recorded in the books of accounts or not. However much interest has been received on these advances. Books of accounts during the course of search for the current year were not found on 16.2.2000. All the books of accounts relate to the earlier year and were not complete. It was told by the assessee that books are maintained on computer and at any time printout from the computer can be taken. But as per the department, at the time of search, no information was available on the computer so that the printout could be taken. The assessee filed its reply on 30.11.2001 and pointed out to the Assessing Officer that no money was advanced. All the transactions and entires were duly recorded in the computerized books of accounts which can be verified. Computerized accounts were duly maintained and were complete. All the dates were in the computer when it was seized and since search, the computer is in the possession of the Department. All the entires made in the Annexure are duly incorporated in the computer account. The annual accounts were complied and prepared on the basis of the computerized account and accordingly income tax ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because the entire undisclosed income of the block period is subject to tax @ 60%. 17. Coming to this findings of the CIT(A), we of the view that no doubt the Assessing Officer has to determine the undisclosed income of the block period and has to pass the order of assessment determining the tax payable on the basis of such assessment in accordance with Chapter XIV-B. Chapter XIV-B is an independent Code laying down special procedure for assessment in search cases, Block period is defined under Section 158B(a) to mean the period comprising the previous year relevant to the 10 assessment year ( as the search has taken place on 16.2.2000) preceding the previous year in which the search was conducted under section 132 and also included the period upto the dater of commencement of search or date of such requisition in the previous year. Section 158BA(1) supersedes any other provisions of the Income Tax Act. It requires the Assessing Officer to assess the undisclosed income in accordance with the provisions of chapter XIV-B. The assessment made under this Chapter is in addition to the regular assessment in respect of each previous year included in the block period. The total undisclo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) that computation of the income of a particular Assessment Year within the block period is not relevant. In our opinion, the income has to be first computed in a particular assessment year. If the income will not fall in a particular Assessment Year, it cannot form part of the undisclosed income. To that extent we set aside the order of the CIT(A)." The Tribunal also carried out exercise in which the assessee was asked to verify from the DR whether entries in Annexure A-10 were duly recorded in books of account. The D.R. after several sitting with the assessee filed written submissions and reiterated the findings of the Assessing Officer, at the outset, that the assessee has not maintained the regular books of accounts for the assessment year 1998-99, ignoring the fact that the assessment for the assessment year 1998-99 was completed under Section 143 (3). The A.R., however, could not explain the amount of Rs.10,000/-, Rs.15,000/-, Rs.7100/- and Rs.5000/- totalling Rs.1,27,100/-, which was not entered in the regular books of accounts and which was treated as undisclosed income by ITAT as defined under Section 158 falling in Chapter XIV-B. On going through the orders passed b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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