TMI Blog2005 (3) TMI 713X X X X Extracts X X X X X X X X Extracts X X X X ..... the following grounds : ( i )That the Hon ble CIT(A) erred in holding that the investment of Rs. 67,125 made by Shri Murali his son and owned by him is assessable as the undisclosed income of the appellant overlooking the fact that the son is professionally equipped and has been in business and earning income and that Shri Murali is an assessee in his own right and without even examining him. ( ii )That the Hon ble CIT(A) erred in upholding the assessment of the estimated income of Rs. 75,000 as undisclosed income overlooking the fact that the said sum has been assessed in regular assessment in a substantive manner and not protectively overlooking the Explanation B to sub-section (2) to section 158BA. 2. Briefly stated, in the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irmed in appeal. The S.L.Ps filed in the Apex Court also were turned down. The assessment in appeal thus came to be made in this backdrop. Copies of these orders are in the paper book filed by the assessee. 3. In appeal against the said block assessment, the assessee challenged the validity of the block assessment on the ground that as the contents of the locker were known to the department, it was not a case of detection of any undisclosed asset or income by the department, as a result of search and as the items referred to above did not fall within the ambit of the definition of the term undisclosed income as defined in section 158B( b ), there was no undisclosed income liable to be assesseed in block assessment. The assessee cited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceeding is invalid. On the other hand, the learned senior DR Shri Manjunathaswamy strongly defended the order of the learned CIT(A) by submitting that Shri Murali was only 19 years of age and thus could not have earned enough to purchase the said site by himself and that it was nothing but the investment of the father in the name of his son. In respect of the addition of Rs. 75,000, although it was an estimate as the same is not on the basis of any books of account, the provisions of section 158BB were rightly applied. The substantive assessment made in regular assessment has no bearing on the block assessment. 6. Although we find considerable substance in this submission on a very subtle but significant point, we do not consider it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not justified. In respect of the addition of Rs. 75,000, it was contended that the said income was not detected as a result of any document seized, admittedly it was only an estimate of income for the year, that the return showing this income was filed on 23-3-1999 and so the same came to be known only on the said date, that by definition as contained in section 158B( a ), block period ended on the date of the commencement of the said search which was on 1-4-1997 and so the said income was not liable to be brought to tax in the block period. Section 158BB is a computation provision which cannot supersede the charging provision of section 158B( b ), that first of all as income must come within the definition of the term undisclosed income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound and in para 6.1 that "the property appears to have been purchased only out of funds of the appellant" thereby indicating an element of guess work which cannot be the basis for a block assessment. Needless to state, block assessment is different from regular assessment and it can be based only on material detected in the course of search. Reference may be made to the latest decision of the Hon ble High Court of Calcutta in the case of CIT v. Ashim Krishna Modal [2004] 270 ITR 160. Further, one cannot overlook the very important fact that the assessee is a goldsmith by profession and he comes from a family of goldsmiths and the claim of the assessee that his son is actively engaged in the profession of goldsmith has not been challeng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the sum of Rs. 75,000 was only an estimate and could not have come within the definition of the term undisclosed . When it is not undisclosed income, there is no question of applying the provisions of section 158BB(1)( d ) at all. It is an admitted position that the gold valued at Rs. 1,68,364 was undisclosed and this could legitimately be assessed as undisclosed in the block assessment made but if it is to be taken that a sum of Rs. 75,000 was income earned during the previous year relevant to the assessment year 1997-98, then the said sum is available to explain the investment made during the year. Hence, looked at from any angle, the assessment of the sum of Rs. 75,000 in block assessment is not warranted. In view of the findi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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