TMI Blog2013 (6) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... d 15.7.2005 passed by the Income Tax Appellate Tribunal, Jodhpur Bench, Jodhpur ('Tribunal'), whereby, the appeal filed by the assessee has been partly allowed and certain additions made vide Assessment Order dated 31.7.1998 for block period F.Y. 1986-87 to 1996-97 have been deleted. The appeal was admitted on the following substantial questions of law by this Court on 3.4.2006:- (i) - Whether in the facts and circumstances of the case, the Tribunal was justified in law in deleting the additions made by the Assessing Officer for the relevant assessment year falling within the block period of 1986-87 to 1996-97 primarily on the ground of Section 158BB is not applicable for the purposes of making additions unless the additions are directly referable to material found during the course of search and seizure proceedings? (ii)- Whether in the facts and circumstances of the case, the Tribunal was justified in deleting the additions on account of cash credit to the extent of Rs.2,04,500/- by setting aside the additions made by the Assessing Officer on the ground that the opportunity was not given though demanded to produce the so-called creditors, without remitting the case back to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO, the Tribunal was of the opinion that in cases of search and seizure no addition can be made de hors the material found as a result of search and as the additions were not based on the material found during the course of search, the said additions were deleted and consequently, the appeal was partly allowed. It is contended by the learned counsel for the Revenue Mr. K.K. Bissa that the Tribunal has not considered and appreciated the provisions of Chapter XIV-B of the Act in correct perspective. It was submitted that the AO can use all the material and evidence placed before him and in his possession to compute undisclosed income by framing block assessment and the onus of proof lies on the assessee and in the instant case, the assessee has failed to discharge his onus and therefore, the additions made were quite justified and consequently, the appeal deserves to be allowed. On the other hand, it was contended by Mr. Anjay Kothari, learned counsel for the assessee that in fact, no substantial question of law arise for consideration in the appeal and submitted that the finding of the Tribunal that the AO had estimated undisclosed income without reference to the material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and the block assessment under Chapter XIV-B of the Income Tax Act. Further while dealing with the same issue, this Court in Commissioner of Income Tax v. Rajendra Prasad Gupta : (2001) 248 ITR 350 (Raj.) held as under:- We are of the opinion that so far as the contention of learned counsel for the appellant that the Assessing Officer has necessary jurisdiction to resort to best judgment assessment in proceedings under section 158BB, the correctness of it cannot be doubted. However, under the scheme of the provisions for block assessment, it is apparent that it relates to assessment of undisclosed income of the assessee excluding the income subjected to regular assessment in pursuance of the returned filed by the assessee for such period. It is also apparent from the perusal of section 158BB that the returns are also required to be filed in pursuance of the notice under section 158BC (a) and the assessment is to be framed on that basis in the light of material that has come into possession of the assessing authority during the course of search which is the foundation of the proceedings. That being so, the correctness or otherwise of the returns filed in pursuance of the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer has estimated the income without reference to the material in his possession which cannot be countenanced. Thus, finding has rightly been reached by the Tribunal on the basis of the material that was on record by applying the principle of law correctly. Such finding does not give rise to any substantial questions of law. Further in the case of Commissioner of Income Tax v. Late Manohar Lal Soni : (2009) 316 ITR 365, this Court has held that where the total income for any previous year does not exceed maximum amount not chargeable to tax, for any previous year falling within the block period, that income is required to be reduced from out of the aggregate income of the block period arrived at in accordance with the provisions of Section 158BB and it cannot be said to be the undisclosed income even if no return is filed within the time prescribed under Section 139 as the assessee was not under obligation to file the return. In the case of Commissioner of Income Tax v. Chandra Chemoux : (2008) 298 ITR 98 (Raj.), this Court held that addition can be made only when evidence is available as a result of search or requisition of books of account, documents and other ..... X X X X Extracts X X X X X X X X Extracts X X X X
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