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2016 (5) TMI 727 - HC - Income TaxSearch and seizure operation under Section 132 - addition on the basis of the notebook and the Bank passbook - validity of documents seized - addition to undisclosed income - Held that:- Section 158BB of the Act empowers the Assessing Officer to frame assessment of the block period on the basis of evidence found as a result of search. As discussed above, the diary, KPS-5 and undisclosed passbook of the S.B. A/C No.9266 though recovered from the survey of the premises of Sujata Hotel Pvt. Ltd., but not only the assessee had made a statement that his passbook and the cheque book are kept in the Sujata Hotel Pvt. Ltd but had also relied upon them while submitting his Block Return and had taken the said stand in his reply to the questionnaire. Still further, the Assessing Officer can take into consideration the other materials or information as are available with the Assessing Officer and relatable to such evidence recovered during the search operation. Therefore, such documents can be taken into consideration by the Assessing Officer. The documents taken into consideration are related to the search operation at the premises of the assessee on the own admission of the assessee while replying to the questionnaire to explain the basis of his undisclosed income declared by him. Thus, we find that not only the survey was not illegal but also that the material collected was relied upon by the assessee himself to explain the basis of undisclosed income for assessment years 2001-02 and 2002-03 shown in his block return, and therefore clearly relatable to evidence found as a result of search, etc. and, thus, was rightly made basis to frame block assessment by the Assessing Officer. Assessing Officer could take into consideration the note book KPS-5 and passbook of S.B. A/C No.9266 recovered from the premises of Sujata Hotel Pvt. Ltd. but from the office cabin which was in the control of the assessee. Tribunal has consequently erred in law in upholding the deletion of the additions made by the Assessing Officer on the basis of the notebook and the Bank passbook - Decided against assessee
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