TMI Blog2011 (9) TMI 653X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Appellate Tribunal relating to assessees viz., N.Chandramoulidevi, V.Hemalatha and N.Venkatesan. 2. The following substantial question of law is raised in T.C.Nos.463 and 464/2005:- "1. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in setting aside the block assessment made under Section 158BC of the Income Tax Act on the assessee for the block period ended 09.11.1995 with the direction that the total income or loss of each previous year should be computed as per the provisions of Chapter IV, even though the returns for the assessment years 1994-95 and 1995-96 were not filed without considering the retrospective amendment made to Explanation to Section 158BB by Finance Act with effect from 01.07.1995?" 3. The following substantial questions of law are raised in T.C.No.1308 of 2005:- " 1. Whether, in the facts and circumstances of the case, the Tribunal was right in holding that losses of the assessment year 95-96 claimed in the belated return had to be set off against the undisclosed income for the block assessment years85-86 to 95-96 ? 2. Whether in the facts and circumstances of the case, the losses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Commissioner of Income Tax Vs. Soora Subramanian reported in (2011) 330 ITR 591 (Mad), wherein, this Court pointed out that on a debatable issue, there could be no rectification of the assessment order. As far as the reported decision is concerned, we do not think that that the said decision will have any relevance to the case on hand, since, a reading of the judgment of this Court shows that it related to the question of rectification and as regards loss adjustment in the computation of income of the Block period. 8. Referring to the unreported decision of this Court in T.C.280 of 2004 dated 07.07.2004 in the case of Commissioner of Income Tax, Coimbatore Vs. Sri Soora Nagarajan, learned counsel for the Revenue submits that the same exercise may be done in the cases before us too to remand the matter back to the Assessing Officer for considering the effect of amendment to Explanation to Section 158 BB, which was made under the Finance Act, 2002 with effect from 01.07.1995. 9. Learned counsel for the assessee also placed before us the decision of the Apex Court in the case of E.K.Lingamurthy and another Vs. Settlement Commissioner (IT and WT) and another reported in (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... total income assessed for each of the previous years falling within the block period shall be income determined before allowing deduction of salary, interest, commission, bonus or remuneration by whatever name called : Provided that undisclosed income of the firm so determined shall not be chargeable to tax in the hands of the partners, whether on allocation or on account of enhancement; (Substituted by the Finance (NO.2) Act, 1996, w.r.e.f.1.7.1995. Prior to its substitution clause (b) read as under : (b) of a firm, or its partners, the method of computation of undisclosed income and its allocation to the partners shall be in accordance with the method adopted for determining the assessed income or returned income for each of the previous years falling within the block period." (c) assessment under Section 143 includes determination of income under sub-section(1) or sub-section (1B) of section 143 ..............." Section 158BB and the Explanation after amendment by the Finance Act, 2002, w.r.e.f. 01.07.1995 :- "158BB (1) The undisclosed income of the block period shall be the aggregate of the total income of the previous years falling within the block period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of the Act.Even though the judgment in the case of E.K.Lingamurthy and another Vs. Settlement Commissioner (IT and WT) and another reported in (2009) 314 ITR 305(SC), was with reference to the pre-amendment provision, in considering the said provision, the Apex Court pointed out as follows:- "......Ordinarily, in the case of regular assessment, the unit of assessment is one year consisting of twelve months whereas in the case of block assessment, the unit of assessment consists of ten previous years and the period up to the date of the search. Section 158BB provides for aggregation of income/loss of each previous year comprised in the block period. The block period assessment under Chapter XIV-B is in addition to regular assessment. Analysing Section 158BB(4) read with Explanation (a) thereto, one finds that only brought forward losses of the past years under Chapter VI and unabsorbed depreciation under Section 32(2) are to be excluded while aggregating the total income or loss of each previous year in the block period but set off of the loss suffered in any of the previous year in the block period against the income assessed in other previous years in the block per ..... X X X X Extracts X X X X X X X X Extracts X X X X
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