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2014 (9) TMI 390 - HC - Income TaxBlock assessment - Books of accounts forming part of return - Whether the amount reflected in Books of Account forming part of returns of a particular AY can constitute the subject matter of the proceedings under Chapter-XIVB of the Income Tax Act – Held that:- Section 158B(b) of the Act defines the term undisclosed income – Following the decision in Commissioner Of Income-Tax Versus Vinod Danchand Ghodawat [2000 (6) TMI 13 - BOMBAY High Court] - only such adverse material, as was unearthed during the search, alone can be the basis for the purpose of block assessment, and not the one, that disclosed in the books of accounts in the earlier assessment years - there is no duty cast on the assessee to draw specific attention to each and every item of the books of accounts and it is for the ITO to draw conclusions, based on the record and material placed before him and elicit clarifications in the event of doubt - the amounts which were disclosed in the books of accounts for the earlier assessment years cannot be treated as undisclosed income, in the block assessment proceedings – Decided in favour of assessee. Deduction on unaccounted cash payments - Whether an assessee is entitled to claim deductions or allowances in respect of amounts which are found as unaccounted cash payments in the course of search under the resultant block assessment – Held that:- The Tribunal was rightly of the view that the payments and receipts and the source of expenditure, have not been explained satisfactorily and it were not reflected in the books of accounts of the assessee - each of the amounts which are added by invoking Section 69C of the Act, did not form part of the books of accounts and that there was no proper explanation or supporting material, as to their source, in spite of opportunity was given to the appellant by the AO - Section 69C of the Act would take in its sweep, not only of the expenditure which was reflected in the books of accounts about also the other items of expenditure regarding which no proper explanation is forthcoming from the assessees, once they were discovered in the course of search and seizure – Decided against assessee.
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