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Issues involved: Search operations u/s 132 of the Income-tax Act, 1961, block assessment u/s 158BC, undisclosed income determination, applicability of section 145, computation of undisclosed income u/s 158BB.
Summary: The High Court of Allahabad heard an appeal regarding undisclosed income determined during a block assessment period. The assessee, running a partnership concern, had cash and documents seized during search operations u/s 132. The Assessing Officer determined undisclosed income, which was challenged before the Income-tax Appellate Tribunal. The Tribunal deleted a portion of the income added by the Assessing Officer, leading to the current appeal. The main issues raised in the appeal focused on the applicability of section 145 of the Income-tax Act, 1961, and the computation of undisclosed income u/s 158BB. The Tribunal's findings emphasized that section 145 can only be applied after rejecting unreliable books of account or documents. It was concluded that if the books of account or documents are rejected, there can be no computation of undisclosed income based on them. Regarding the computation of undisclosed income u/s 158BB, the Tribunal held that the Assessing Officer was not justified in estimating income for a specific period where no details were found in the seized documents. The Tribunal directed the Assessing Officer to consider the appellant's undisclosed income based on specific documents, resulting in the deletion of a significant portion of the determined undisclosed income. Ultimately, the High Court dismissed the appeal, stating that no substantial question of law arose from the Tribunal's order based on the facts and findings presented.
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