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TMI Blog2014 (2) TMI 1159X X X X Extracts X X X X X X X X Extracts X X X X ..... hat some documents seized during the course of search also had link with the assessee. Notice u/s 158BD was issued on 1.9.2002 requiring the assessee to file return for undisclosed income. No return was filed. Page 131 of Annexure A-6 found during the course of search, is a copy of account of M/s Soni & Associates, the proprietorship concern of the assessee, in the ledger of M/s Apoorve Apparels, the proprietorship concern of Shri Ashish Soni. On this page, there was shown opening balance of Rs. 53,529/- and below that the words `fabrication charges' were mentioned with pencil and corresponding entry in the ledger in front of this description was Rs. 4,35,300/-. While replying to the Departmental query, Shri Ashish Soni submitted in the blo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... completion of assessment was liable to be quashed. 4. We do not find any force in the submissions of the ld. AR in this regard. Sec. 158BE deals with the `Time limit for completion of block assessment'. Whereas sub-sec. (1) deals with period of limitation in respect of assessment u/s 158BC, sub-sec. (2) deals with the period of limitation for completion of block assessment u/s 158BD. Clause (b) of sub-sec. (2) provides that where search has taken place after 1.1.1997, the assessment u/s 158BD should be `completed' before two years from the end of the month in which the notice under this Chapter was served on such other person. Coming to the facts of the instant case, we find that notice in the case of the assessee was issued u/s 158BD on 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a period of six years from the end of the relevant assessment year. 6. We are dealing with an assessment getting started u/s 158BD after the assessee had filed return originally declaring income of Rs. 55,300/-. Since such assessment was started pursuant to certain material found in the hands of Shri Ashish Soni indicating that the assessee had not correctly reflected actual receipts from Shri Ashish Soni, such an assessment is fulfilling the requirements of sec. 147. This section provides that where any income chargeable to tax has escaped assessment for any assessment year, such income and also any other income which comes to the notice of the A.O subsequently, may be assessed or reassessed subject to the provision of sections 148 to 153 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he person searched u/s 158BC showing the undisclosed income from such documents as relating to the other person. In such circumstances, there is a requirement on the part of the Assessing officer of the person searched to record satisfaction that such income should be assessed in the hands of the other person. The facts before us lie in altogether different realm. We are confronted with a situation in which Shri Ashish Soni availed the services from the assessee for which a consideration of Rs. 4,35,300/- was agreed upon. The said sum was not included by him in his expenditure, for which the Assessing Officer made addition u/s 69C as 'Unexplained expenditure'. Such expenditure of Shri Ashish Soni was the income of the assessee, who failed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he expenditure incurred by the assessee outside the books of account. It was further held by the tribunal that : `The assessee did not explain the source of such expenditure but only pleaded that the entry has been wrongly made by the accountant of the assessee. We do not agree with the submissions of the assessee as made. In our opinion, onus is on the assessee to explain the source of expenditure incurred by him. Since the assessee failed to explain the source of expenditure, therefore, the CIT(A) in our opinion, has correctly sustained the order of the A.O treating this unexplained expenditure to be the income of the assessee to the extent of Rs. 3,80,000/- u/s 69C of the Act". It is further relevant to observe that the Tribunal proceede ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. AR that the entire amount of Rs. 4,35,300/- cannot be included in the assessee's total income and only profit margin therefrom should be added, is again devoid of any force. No material has been placed on record to demonstrate that the assessee did not account for certain expenditure in her books account for which she rendered job services to M/s Soni & Associates for a sum of Rs. 4,35,300/-. In such a case, it is gross receipt and not the profit element therein, which escaped taxation and is hence liable to tax. The impugned order is accordingly modified and the addition is sustained at Rs. 3,80,000/-.
11. In the result, the appeal of the assessee is partly allowed.
Order pronounced in the open Court on 21/02/2014. X X X X Extracts X X X X X X X X Extracts X X X X
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