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2008 (12) TMI 411 - HC - Income TaxBlock assessment - computation of income - Held that: three classes of income are excluded in the computation of income for theblock period. The first one is the income assessed and the second one is theincome returned through revised return filed by the assessee and the last one is the income accounted by the assessee in any books of account or other materials maintained by the assessee. It has to be noted that the block period assessment under the main provision has to be completed based on evidence and materials collected by the Department in the course of search. The scheme of exclusion of various items of income in the computation of income for the block period under section 158BB is such that income either assessed or returned for assessment or accounted by the assessee should not be assessed as income unearthed by the Department in the course of search. Obviously, the income assessed and covered by clause (a) is covered by assessment completed prior to the date of commencement of search. The second category of income is the income covered by returns or revised returns filed, which are pending for assessments. Obviously, such returns should have been filed prior to the date of commencement of search or allowed to be filed after the date of search. The latter category is covered because the assessee can disclose income in the course of search and avoid block assessment. Such return or revised return cannot be filed after search for the purpose of exclusion from the block period assessment, it makes no difference whether the Assessing Officer acted upon such regular returns or revised returns filed after search. The regular return filed by the assessee for the year 1995-96 was belated, and the revised return filed immediately after search was a non est one. In any case, by filing a revised return after search, the assessee cannot seek exclusion of any income from block assessment. So far as the assessment year 1996-97 is concerned, the assessee admittedly did not file the return on the due date but filed a belated return after the date of search. Even though these returns may be treated as filed under section 139(4) of the Act, the income returned there- under cannot be excluded from the scope of block assessment, as such returns are filed after the commencement of the date of search.
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