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TMI Blog2015 (3) TMI 275X X X X Extracts X X X X X X X X Extracts X X X X ..... that the said sum represented the disclosed income of the assessee during the block period for which no returns were required to be filed as the said disclosed income was below the limit of income chargeable to tax under the Act? 2. Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the sum of Rs. 69,298/-was to be assessed under Chapter XI-VB of the Act as undisclosed income of the assessee, when it was not disputed that the said sum represented items of income disclosed in the bank accounts and other records of the assessee? 3. Whether on the facts and in the circumstances of the case, the Tribunal erred in upholding the assessment of Rs. 69,298/- in the hands of the assessee? 4. Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the sum of Rs. 6,79,300/- was to be assessed under Chapter XI-VB of the Act as undisclosed income of the assessee, when the sid sum represented jewelery that had been acquired by the assessee's father and father-in-law on the occasion of her marriage? 5. Whether on the facts and in the circumstances of the case, the Tribunal erred in uphol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in determining the undisclosed income that the maximum nontaxable limit for each year should not be included, was not accepted in view of Section 158BB(1)(c) of the Act. Therefore except for Rs. 48 Thousand which relates to Assessment Year 1997-98 for which return was to filed, the benefit of non taxable limits was not extended to the Appellant. 6. Being aggrieved, this appeal has been filed. The appeal can broadly divided into two issues: (a) First issue raised in Question Nos. 1 to 3 is in respect of maximum nontaxable limit of income for each year is not to be included in undisclosed income; and (b) Second issue raised in Question Nos. 4 to 8 is in respect of jewelery in appellant's possession is being taxed as unexplained investment under Section 69 of the Act. First Issue Question- Nos. 1 to 3: 7. Mr. Mistry, learned Senior Counsel for the Appellant points out that Section 158BB of the Act has been amended by Finance Act, 2002 with retrospective effect from 1 July 1995 as relevant is as under: "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 computed, [in accordanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be found with the same in not extending the benefit of income not chargeable to tax during the regular assessment proceedings while computing undisclosed income for block period. This was on account of the appellant's failure to file a return of income and the unamended sub-section (c) of Section 158BB(1) of the Act excluded the benefit of any reduction in undisclosed income. However the amendment by Finance Act, 2002 replaced/substituted the original sub-section (c) of Section 158BB(1) of the Act by a new sub-section (c) consisting of sub-sections (A), (B) and (ca) of the Act. As a consequence of the aforesaid amendment with retrospective effect from 1995,where the due date of filing the return has expired and no return has been filed, yet the total undisclosed income for the block period would interalia be reduced by aggregate of total income to the extent such income does not exceed the maximum amount not chargeable to tax for any previous year falling in the block period. However the same is subject to the condition that such income not chargeable to tax is determined on the basis of entries recorded in the books of account and other documents maintained in the normal cours ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e before the date of the search. Second Issue - Question Nos. 4 to 8: 12. Mr. Mistry, learned Sr. Counsel of the Appellant points out that the jewelery of Rs. 6.79 Lakhs was received by her on the occasion of her marriage from her father and father-in-law. This was the explanation offered by her in respect of the jewelry in her possession. The authorities under the Act have not disputed the fact that the jewelery had been received by respondent-assessee from her father and fatherinlaw. However, the explanation that has been offered by her father and father-in-law is not accepted by the authorities under the Act on account of their failure to produce purchase invoices in respect of the jewelery. It is submitted that once the assessee has explained the source of the jewelery in her possession being gifts received on the occasion of her marriage from her father and father-in-law and the Assessing Officer does not dispute the same, it is then not open to him to disbelieve the explanation without any cogent reason. It is particularly emphasized that Section 69 of the Act gives discretion to the Assessing Officer to deem the same to be an income of assessee. However such discretion mus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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