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2015 (2) TMI 729 - HC - Income TaxApplicability of block assessments as per section 158BB - return of income had been filed by the assessee beyond the date prescribed under section 139(1) - Held that:- It is clear that the income unearthed on the basis of evidence found as a result of search or requisition of the books of account or documents or such other materials or information available with the Assessing Officer and relatable to such evidence alone could be assessed so as to declare undisclosed income for all the six assessment years in the block period. The Tribunal has not examined the case in a proper perspective and in the light of the settled position of law. The income that has been disclosed by the assessee in the returns of income, other than the income unearthed as a result of search, cannot be treated as undisclosed income while assessing the income during the block period. Thus remand these appeals to the Tribunal to consider the appeals afresh in the light of the observations made in this judgment. - Decided in favour of revenue for statistical purposes. Agricultural income - Assessing Officer expressed doubt about the genuineness of this income from agriculture and having so observed did not accept the said claim and brought it to tax - appellate authority deleted the said addition as undisclosed income for the block period - Held that:- It appears from the record and so also the orders passed by the appellate authority and the Tribunal that the agricultural income for 1995-96 was accepted by the Assessing Officer. Further, the income of ₹ 3,50,000 for the assessment year 1996-97, was deleted being undisclosed income for the block period. We do not find any reason to interfere with the orders passed by the appellate authority and the Tribunal, more particularly, in view of the fact that the agricultural income from the very same agriculture lands for the assessment year 1995-96 was accepted by the Assessing Officer. Hence, we confirm the findings of fact recorded by the appellate authority and the Tribunal. - Decided in favour of assessee. Deduction under section 54 and section 54F - what the assessees had transferred was their undivided share in the land and not the land plus residential house/apart ments - Held that:- Section 54F provides that if the assessee has a residential house he cannot seek the benefit of long-term capital gain. Under this provision, merely because, the words "residential house" are preceded by article "a" would not, in our opinion, exclude a house shared with any other person. Even if the residential house is shared by an assessee, his right and ownership in the house, to whatever extent, is exclusive and nobody can take away his right in the house without due process of law. In other words, co-owner is the owner of a house in which he has share and that his right, title and interest is exclusive to the extent of his share and that he is the owner of the entire undivided house till it is partitioned. The analogy applied by the Tribunal based on the judgment of Banarsi Dass Gupta [1987 (4) TMI 7 - SUPREME Court], wherein, the Supreme Court considered the provisions contained in section 32 of the Act, in our opinion, would not apply to the facts of the present case. The right of a person, may be one-half, in the residential house cannot be taken away without due process of law or it continues till there is a partition of such residential house. Thus, we are unable to agree with the view expressed by the Tribunal on this issue and we set aside the findings recorded on this question of law - Decided against assessee. Valuation of closing stock - Valuation of closing stock of immovable properties should be treated as nil, as claimed by the assessee in view of the fact that the said properties were involved in litigation as held by tribunal - Held that:- Though the reasons recorded by the Tribunal, in our opinion, are not happily worded, we are also of the view the question as regards the valuation of closing stock in respect of the land in litigation deserves to be considered afresh in the light of the settled position of law that the assessee, in such a situation, has a choice to value the stock at cost or market price, whichever is lower. None of the authorities have considered this question in a proper perspective. It was necessary to find out the value of the land at which it was purchased and the market price, at the relevant time, in the light of the fact that the property was in litigation, and then fix the liability. - Decided in favour of revenue for statistical purposes. Undisclosed income of the assessee during the block period - Tribunal held that the amounts standing to the credit of G. Anand having not been claimed as expenditure cannot be treated as undisclosed income of the assessee during the block period - Held that:- Find ourselves in agreement with the findings recorded by the Assessing Officer and the appellate authority, which observed that the amount of ₹ 10,00,000 remained unexplained and treating the same as undisclosed income. It is also pertinent to note that the assessee has not only not disclosed the said amount but failed to file the return of income for the assessment year 1998- 99 before the search. In other words, he did not file the return of income for this assessment year within the time stipulated under section 139(1) and (4) of the Act. He also failed to maintain the books of account for the said assessment year and in this backdrop, the said amount of ₹ 10,00,000 has rightly been brought to tax. The Tribunal did not consider the materials on record in a proper perspective and has simply by single sentence in the order set aside the concurrent findings of fact recorded by the authorities below. Observation/finding in view of the facts and circumstances of the case, recorded by the Tribunal, is perverse and deserve to be set aside. - Decided in favour of revenue. Undisclosed investment towards purchase of NSC - AO make the said addition in the regular assessment proceedings - Tribunal reversed the findings holding that the assessee did not claim deduction in respect of the investment in NSC it would be out of the purview of the undisclosed income - Held that:- Having regard to the quantum of amount and the findings recorded by the Tribunal, this substantial question of law was not seriously pressed. We are also not inclined to interfere with the order of the Tribunal in respect of the sum of ₹ 50,000 invested in NSC by the assessee. - Decided in favour of the assessee
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