TMI Blog2011 (9) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... ximate calculation based on probabilities. - In the instant case admittedly the seized material showed undisclosed income for a period of 89 days. On that basis the assessing officer has estimated the undisclosed income for 365 days and then has arrived at the undisclosed income for two years. Such a computation of income based on estimation is contrary to the aforesaid statutory provision. - Decided in favor of assessee. - ITA NO. 3051 OF 2005 - - - Dated:- 19-9-2011 - SHRI N. KUMAR AND SHRI RAVI MALIMATH, JJ. Represented By: Shri G. Kamaladhar for the Appellant. Shri A. Shankar and M. Lava for the Respondent. JUDGMENT N. Kumar, J. The revenue has preferred this appeal against the order passed by the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 965/- for two years 1997-98 and 1998-99. He gave deduction of 50% of the said amount towards expenditure and he arrived at the total undisclosed income at Rs. 39,13,500/- and levied tax on the said amount. Toe assessee on his part after admitting that he was maintaining two accounts and he had also destroyed few receipts, offered Rs. 10,00,000/- as the undisclosed income which was not accepted. 3. Therefore, the assessee preferred an appeal against the order passed by the assessing officer. But, the Commissioner of Income Tax (Appeals) declined to interfere with the block assessment order. 4. Aggrieved by the same, the assessee preferred an appeal to the Tribunal. The Tribunal held that the seized material is for limited period of 89 da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he relief on that basis. Aggrieved by the said order, the revenue is in appeal. 5. The learned counsel for the revenue assailing the impugned order contended that, admittedly the assessee had maintained a parallel account. It had destroyed the chits. What is seized pertains to only 89 days. In the case of block assessment, the income of the entire block period is to be taken into consideration. In the absence of any other material and in the light of the admission, the assessing officer was justified in making an estimate of the undisclosed income on the basis of the seized material. The Tribunal was not justified in restricting the undisclosed income to the admitted amount of Rs. 10,00,000/- and thus committed an error in interfering wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e block period computed, in accordance with the provisions of this Act, on the basis of evidence found as a result of search or requisition of books of account or other documents and such other materials or information, as are available with the assessing officer and relatable to such evidence, as reduced by the aggregate of the total income, or as the case may be, as increased by the aggregate of the losses of such previous years. Therefore, while computing the undisclosed income for the block period, the evidence found as a result of search or requisition of books of account or other documents and such other materials or information as are available with the assessing officer and relatable to such evidence has to be taken into considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation" is completely distinct and different from the word "estimate", which means: the action of valuing or appraising: an approximate calculation based on probabilities. Under the scheme of the Act, the Assessing Officer has to compute the undisclosed income falling within the block period. He does not estimate or appraise the undisclosed income. As opposed to this the word 'assessment' has been defined to mean 're-assessment' as well. The ordinary meaning of the word "assessment" is: the action of assessing; the amount assessed; the determination of the amount of taxation; the scheme of charge or taxation; valuation of property or income for the purpose of taxation. The word "assess" is a comprehensive word, and in a taxing statute it of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry to the aforesaid statutory provision. It is in that context when the total value of the undisclosed income for 89 days as reflected in. the receipts which were seized amounted to Rs. 5,48,000/- and on the admission of the assessee that he has destroyed similar receipts in the past, when he offered Rs. 10,00,000/- as the undisclosed income. taking into consideration that he was a young entrepreneur of 24 years and he had started the business just two years back, the Tribunal was justified in accepting Rs. 10,00,000/ as the undisclosed income which is in far excess of the undisclosed income as could be gathered from the seized material and in deleting the excess undisclosed income as arrived at by the assessing authority. In that view of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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