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2014 (10) TMI 363 - HC - Income TaxMeaning of undisclosed income u/s 158BB – Computation of undisclosed income of the block period – Whether the share certificates belongs to assessee or not - Held that:- The items, such as, money, bullion, jewellery and other residuary items, which constitute the wealth or income, would be treated as an undisclosed income, provided that such items were not disclosed for the purpose of the Act - It means such items were not the subject matter of any returns filed under the Act - once the items mentioned in the definition were the subject matter of the returns filed under the Act, they cannot be treated as undisclosed income - the returns need not be those filed by the concerned assessee alone - The provision does not indicate or that the returns insist covering those items must be that of the concerned assessee alone - the provisions of a taxation law, that too of the punitive nature, need to be interpreted in a strict manner - The basis for the AO to disbelieve those statements was that the filing of returns, though before the search was conducted, was done as an afterthought, in some cases, or that filing of returns was not warranted at all, having regard to the financial status of the concerned assessee. The Tribunal took the view that the scope of powers of an officer conducting search cannot be expanded to cover the adjudication or verification of the assessments already made - the block assessment is to be made strictly in accordance with Section 158BB of the Act – the AO propose to treat the undisclosed income as an independent entity and subject to making tax without following the provision u/s 158BB of the Act - Such a course would push the assessee to a further hardship and result in denial of the very safeguard that was prescribed by the Legislature - the persons, in whose names they were issued, have stated that they belong to them and it was also found in the search itself, that shareholders have submitted their returns - there was no basis for treating the share certificates as belonging to anybody else - relying upon Commissioner of Income Tax v. Lovely Exports Private Limited [2008 (1) TMI 575 - SUPREME COURT OF INDIA] – Decided against revenue.
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