TMI Blog1998 (6) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... income of the assessee for the block period in question and levied income-tax at the rate of 60 per cent which came to Rs. 2,07,564. 3. The assessee disputed the figures adopted by the AO in respect of (i) LIC loan of Rs. 1,30,000 as against the actual receipt of Rs. 1,35,000, (ii) repayment of LIC loan of Rs. 50,000 and the interest thereon at Rs. 18,732, (iii) cost of construction of the house property at Rs. 3,29,000, (iv) domestic expenses and personal expenses at Rs. 3,84,750, (v) alleged deposit in the bank in the name of Deepa amounting to Rs. 67,000 and (vi) ultimately the computation of the undisclosed income at Rs. 3,45,940 under s. 158BC of the IT Act, 1961. 4. We have heard the learned counsel for the assessee, C. Kochunn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ., 1996. The CIT transferred this file to the AO for making an assessment. According to the learned counsel for the assessee, C. Kochunni Nair, the transfer of the assessment for the block period cases by the CIT is not correct. According to him, it is not an assessment from year to year, but it is an assessment of a unit of block period and therefore he challenged the transfer of the files to the AO. 8. A notice under s. 158BC for the block period 1st April, 1985 to 4th Jan., 1996 was issued to the assessee on 13th Aug., 1996 calling upon the assessee to file the return of income for the above block period. The assessee received this notice on 19th Aug., 1996, but did not file the return of income. Another notice under s. 142(1) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the valuation cell and since a general rate has been adopted, the valuation need not be accurate. According to the assessee, the cost of installation of pipes and electrical fittings shall be much lesser than that estimated by the valuation cell if Kerala State PWD rates are adopted. Further, since wood has been purchased from Kerala Government Factory, cost of material was much lesser than what is adopted by the valuation cell. The assessee also argued that no expenditure on account of drawing of plan, etc. has been incurred since a friend of his has done the job for him. The AO considered the above arguments of the assessee as only general in nature. The AO found that no specific complaint has been raised by the assessee and, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dmitted by the assessee and at Rs. 3,29,000 adopted by the valuation cell. 12. Another disputed point is regarding the estimation of domestic and personal expenses of the assessee. The assessee estimated the quantum of expenditure on account of domestic and personal purposes during the period 1st April, 1985 to 4th Jan., 1996 at Rs. 2,83,200. The AO considered the estimate made by the assessee as very much on the lower side. For the sum financial year 1984-85, the assessee has estimated this expenditure at Rs. 1,250 per month. The assessee has his wife and three children to be looked after. Hence, he considered that a monthly expenditure of Rs. 1,250 for a family of the assessee's magnitude is not at all sufficient for a decent living. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -95, 1995-96 and 1996-97. Thus, the assessee gets a relief of Rs. 32,250 from the total expenses estimated of Rs. 3,84,750 by the AO. We have already directed the AO to grant a relief of Rs. 49,000 from the cost of construction of the house building in computing the undisclosed income of the assessee. The total relief thus comes to Rs. 81,250. 14. The cash flow statement prepared by the AO showed the inflow at Rs. 14,58,792. As already stated the relief granted to the assessee on the above two counts comes to Rs. 81,250. Therefore, this sum of Rs. 81,250 has to be reduced from the difference of Rs. 3,45,940 between the inflow and outflow of cash. Accordingly, the balance undisclosed income for the block period in question stands at Rs. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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