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TMI Blog2014 (1) TMI 1189X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) of the Income Tax Act, 1961 on 27thth October 1997. A notice under section 158BC of the IT Act was issued to the Assessee on 25thth March 1998. On 5thth October 1999 a notice under section 142(1) of the Income Tax Act was issued by the Joint Commissioner, Income Tax in connection with the assessment for the block period 1stst April 1987 to 27thth October 1997 asking him to produce the Books of Account and documents. The Assessee filed his returns wherein he has declared undisclosed total income of Rs. 8,85,000/- representing undisclosed investment made in acquiring relief bonds with the aforesaid sum. On clarification again being sought, the Assessee submitted his explanation whereupon notices under section 158BFA(2) of the Income Tax Act were issued asking him to show reasonable cause as to why he failed to furnish return of the undisclosed income. The appellant assessee appeared and replied to the show-cause. By order dated 29thth October 1999, the Assessing Officer / Assistant Commissioner of Income Tax, Investigation Circle, Ranchi found the undisclosed salary income of Rs. 3,39,900/-; unexplained payment on account of purchase of property totalling Rs. 3,00,000/-; unexplain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ITAT, Circuit Bench, Ranchi in I.T.(SS) No. 63/Pat/2001 challenging the addition of salary income for the period 1stst April 1995 to 31stst March 1996 asserting that the Assessee was getting Director's remuneration of Rs. 48,000/- from M/s Runga Projects Limited from 1stst April 1995. Learned Tribunal on hearing the department's representative as well as the Assessee, came to a conclusion that the learned CIT has rightly deleted the addition of undisclosed salary income for the subsequent year as the addition made by the Assessing Officer was not proper. It also found that on the basis of rectification petition under section 154 of the Income Tax Act, the Assessee should get further relief of Rs. 48,000/- on the basis of own averments made by the learned CIT (Appeals). Learned Tribunal further allowed the relief of Rs. 48,000/- on the addition of undisclosed salary of Rs. 1,80,000/- in the financial year 1995-96. In relation to other grounds raised by the Assessee relating to the addition of Rs. 3,00,000/- alleged to have been paid by one P.P. Sharma to Sarswati Kunj Cooperative House Building Society, the learned Tribunal after consideration of the submission of the parties, c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rved that the matter requires investigation and remanded the matter. In any case, such loose sheets could not be the basis for any addition made as undisclosed income to the Assessee. 7.Learned counsel for the Revenue, on the other hand, has supported the impugned judgment. He has relied upon the provisions of section 158 B(b) of the Income Tax Act which lay down the special procedure for assessment of search cases. As per section 158B(b), undisclosed income 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. Learned counsel for the Revenue has relied upon section 132(4A) of the Income Tax Act and submitted that where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search, it may be presume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis of entries made in such diary, certain persons were sought to be implicated for offence under the Indian Penal Code and Prevention of Corruption Act. The facts situation in the present case however is different. The instant proceeding arises out of search conducted under the provisions of section 132(1) of the Income Tax Act in the premises of the appellant, pursuant to which, the appellant was served with a notice under section 158BC of the Income Tax Act to submit returns for the block period 1stst April 1987 to 27thth October 1997. The Assessing Officer after consideration of the report filed by the appellant, proceeded to add undisclosed income of salary of Rs. 3,39,900/- on the basis of certificate seized from the premises of the appellant issued by M/s Rungta Projects Limited pertaining to the period 1stst April 1995 to 31stst March 1996. The Assessee was the Director in the same company i.e. M/s Rungta Projects Limited. The aforesaid addition was under challenge. The Appellate Authority thereafter deleted the addition to the extent of Rs. 1,80,000/- for the subsequent assessment year 1998-99. The Commissioner of Income Tax (Appeals) found that the addition can only be j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore us which relate to search and seizure, are also quoted here-under: "132(4A) Search and seizure._ Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search, it may be presumed_ (i) that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person; (ii) that the contents of such books of account and other documents are true; and (iii) that the signature and every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested." 12.A provision has been made under section 158B(b) of the Income Tax Act that undisclosed income would include any money, bullion, etc. or any income based upon any entry in the books of account or other documents or transactions representing ..... 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