TMI Blog2005 (10) TMI 430X X X X Extracts X X X X X X X X Extracts X X X X ..... ious persons connected with Electrotherm (I) Ltd. group on 12-12-1995 which was concluded on 14-12-1995. From the papers seized from the residence of Shri Shailesh Bhandari, Shri Pukhraj Shah and the factory premises of Electrotherm (I) Ltd., it was found that the assessee Smt. Jyoti M. Bhandari had sold 1,900 shares out of the entire holding of 91,400 shares and the assessee Smt. Indubala B. Bhandari had sold 4,500 shares out of the entire holding of 1,66,000 shares up to 26-6-1995. Notices were, therefore, issued under section 158BD read with section 158BC on 19-12-1996 requesting the assessee to show cause as to why the same be not related as undisclosed income of the assessees. Section 142(1) notices were also issued thereafter and the assessees ultimately filed the returns of income on 2-12-1997 with barely 29 days left before the expiry date within which the return was to be filed. The regular returns of income were filed declaring income of Rs. 1,88,520 and Rs. 4,08,048 respectively by these two assessees which was treated by the Assessing Officer as income from undisclosed sources. The assessments were also made under section 143(3) on 29-12-1997. The assessees only grieva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n these cases was 12-12-1995 which was concluded on 14-12-1995 and, therefore, the assessments completed on 29-12-1997 would not be of any help to the assessees for reducing the income from the undisclosed income of the block period. 5. We have heard the parties and considered their rival submissions. The cases relied upon by the assessee, in our opinion, have no bearing on the issue raised in these cases after the amendment with retrospective effect from 1-7-1995 by Finance Act, 2002 in section 158BB(1)( a ). In the first decision cited by the assessee in the case of Nagin Das M. Goradia ( supra ), the issue was that in the absence of any incriminating material having been found against the assessee during search, the Assessing Officer cannot treat the regular income returned in belated return after the date of search and the income below taxable limit for which no return was filed as undisclosed income for the purposes of block assessment. In the present cases, capital gain was found to be income of the assessees on the basis of the material found during the course of search and, therefore, that case would not be of any help to the assessee. Clause ( c ) of section 158BB wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not been conducted the assessee would not have disclosed the income. It was also held that there were no facts or evidence on record to presume that the assessee would not have disclosed the income and, therefore, the income declared by the assessee in the belated return did not come within the definition of undisclosed income under section 158B of the Act. This was a case decided on December 1, 1999 and was prior to the amendment by Finance Act, 2002 with retrospective effect from 1-7-1995 and, therefore, would not be of any help to the assessee. The definition of undisclosed income in section 158B( b ) includes any money, bullion, jewellery or other valuable article or thing or any income based on any entry in the books of account or other documents or transactions, where such money, bullion, jewellery, valuable article, thing, entry in the books of account or other document or transaction represents wholly or partly income or property which has not been or would not have been disclosed for the purposes of this Act or any expense, deduction or allowance claimed under this Act which is found to be false. This clause ( b ) to section 158B deals with two situations where th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e date for filing the return of income has expired but no return of income has been filed, the reduction to be allowed is Nil unless the case of the assessee falls in clause ( c ) of section 158BB and that position is to be seen with reference to the date of commencement of the search or the date of requisition. On the date of commencement of search and requisition, the assessees had not filed the returns nor the assessments were made and, therefore, this case also would be of no help to the assessees. 9. In the case of Harishkumar J. Gupta ( supra ), again the decision is dated 27th December, 1999, i.e., prior to the amendment by Finance Act, 2002 with retrospective effect from 1-7-1995. 10. The case of B.K. Agarwal ( supra ) was decided on 31st May, 2001 and the amendment provisions were not subject-matter of consideration before the Tribunal and, therefore, this case would also be of no help to the assessees. 11. In the case before the Calcutta High Court in the case of Bhagwati Prasad Kedia ( supra ), the question was whether the Assessing Officer was entitled to question in block assessment the loan which was a subject-matter of the regular assessment and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e also cases decided on 29-9-2000, i.e., before the insertion of Explanation by Finance Act, 2002 with retrospective effect from 1-7-1995. In these circumstances, in our opinion, the income of the assessment year 1995-96 though assessed under section 143(3) but the returns having been filed after the commencement of the search and date of requisition and assessments also completed thereafter under section 143, no reduction could be given to the assessees while determining the undisclosed income as per provisions of section 158BB(1) of the Act. The contention of the ld. counsel of the assessees is that Explanation ( b ) to section 158BA(2) does not prescribe any time-limit before or after which the regular assessment was to be made and it is, therefore, to be taken as if any income assessed by way of regular assessment is to be excluded. We do not find any substance in this contention of the assessees because what has to be excluded is income assessed by way of regular assessment under section 143 or 144 or 147 which has been concluded prior to the date of commencement of the search or date of requisition. It is this assessment which is mentioned in section 158BB(1)( a ) that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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