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2021 (2) TMI 1141 - AT - Income TaxDetermining the “undisclosed income” - Search proceedings - A.R. submitted that the addition has been made on the basis of a balance sheet found during the course of search proceedings - HELD THAT:- There are no corroborative evidences to show that the Balance sheet found during the course of search represents true nature of transactions. On the contrary, the assessee, being a limited company, has filed annual reports containing Balance sheets with Registrar of companies, which is based on books of accounts. Hence the balance sheet found during the course of search has to be considered as a “dumb document” only. In that view of the matter, the quantum of investment made as share application money in the above said company should be taken as ₹ 131 lakhs only. The assessee has claimed that he has invested ₹ 130 lakhs. Since the claim of the assessee is supported by the books of accounts, the same is required to be accepted. Assessee has explained the sources, major portion of which represents agricultural income and it has been declared to the revenue in the returns of income filed prior to the date of search. The revenue has not found any material to show that the agricultural income and other income declared by the assessee in the returns of income are false. Hence, we are of the view that the AO, in the block assessment proceedings, cannot tinker with the income/agricultural income already declared by the assessee in the returns of income filed prior to the date of search. Hence the sources for ₹ 130 lakhs also require to be accepted. Accordingly, in effect, there is no incriminating material available with the AO in support of the undisclosed income determined by him. Accordingly, we set aside the order passed by Ld CIT(A) and direct the AO to delete the entire amount of undisclosed income determined by him. Surcharge levied u/s 113 - HELD THAT:- Since we have deleted the entire undisclosed income in the earlier paragraphs, the question of levying of surcharge has become academic. In any case, it is the submission of the assessee that the decision rendered in the case of Suresh N Gupta [2008 (1) TMI 396 - SUPREME COURT] has since been modified by Hon’ble Supreme Court in the case of Vatika Township ([2014 (9) TMI 576 - SUPREME COURT]Accordingly, in case if any need arise for levying of surcharge in the instant case, the law laid down by Hon’ble Supreme Court in the case of Vatika Township (supra) needs to be followed. Interest u/s 158BFA(1) of the Act upto the date of original assessment order and not upto the date of assessment order passed in the set aside proceedings - HELD THAT:- As rightly pointed out by Ld A.R, the order passed by the Tribunal earlier and the order passed by the AO in the set aside proceedings are continuation of original assessment proceedings. It is not a case of quashing of original assessment order and initiation of altogether new proceedings. Hence, we agree with the view expressed the Ld CIT(A) that the interest u/s 158BFA(1) should be charged upto the date of original assessment order, i.e., the expression “date of completion of assessment under clause (c) of sec. 158BC” should mean the original assessment order only. We further notice that there is no provision under the Act to extend charging of interest beyond the date of completion of the original assessment proceedings. Accordingly, we confirm the order passed by Ld CIT(A) on this issue.
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