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TMI Blog2016 (2) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... i Lease and Finance Pvt. Ltd., E-10, Sector 15, NOIDA (hereinafter referred to as 'the assessees') by filing the present appeals, sought to set aside the impugned orders both dated 12.12.2011 passed by the Assessing Officer, New Delhi for the block assessment period from 01.04.1986 to 27.06.1996 on the grounds inter alia that: A. IT(SS)A No.02/Del/2012: "1. The assessing officer erred in law and on facts in making an addition of Rs. 8,93,034/- being interest on NCD with Citibank ignoring the facts and evidences placed on record that the transactions regarding NCD were duly recorded in the books of account and the said interest was duly declared as income in the regular return of income filed before the due date. Thus the addition so ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on facts in not allowing credit of TDS certificate of Rs. 62,226/- issued by Citibank and submitted to the department though the said amount is included in the interest of Rs. 8,96,459/-. Thus directions should be issued to allow credit of the said amount against tax due to the assessee." 3. Briefly stated, the facts of these case are: the assessees, being related to Prakash Chand Yadav group of cases, one of the accused in Rs. 133 crore urea import scam, were searched u/s 132(1) of the Act on 20.09.1996 regarding the bank account No.0-412419-006 in Citi Bank, Connaught Place, New Delhi, and thereafter, pursuant to notice u/s 158BC, the assessments were completed on 30.09.1997 at an undisclosed income of Rs. 1,28,93,034/- and Rs. 8,96,459 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... total amount of Rs. 1,20,00,000/- credited in the accounts of the assessee has been received from Shri Anil Sanghi in account No. 0-412419-006 in Citi Bank, Connaught Place, New Delhi from his current account No.612 having been transferred out of the amount of Rs. 27,64,93,670/- declared by Shri Anil Sanghi as his undisclosed income for the block period and offered for taxation by him. The said amount has already been taxed in the hands of Anil Sanghi. The amount of Rs. 1,20,00,000/- credited in the accounts of the assessee and debited in the account of Anil Sanghi which is not treated as undisclosed income of the assessee for the Assessment Year 1996-97 in view of the directions of the Tribunal. 6. Regarding interest income of Rs. 8,93,03 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... light of orders of tax authorities below and facts and circumstances of the case. 10. Grounds No.1 and 2 of I.T.(SS) A. No.02 & 05/Del/2012: Initially, notice u/s 158BC of the Act was issued on 07.04.1997 and assessment u/s 158BC(c) of the Act was completed on 30.09.1997 at undisclosed income of Rs. 1,28,93,034/- against retuned undisclosed income of Rs. 'nil'. 10.1 In the second round of litigation, amount of Rs. 1,20,00,000/- credited in the assessee's account No.0-412419-004 maintained with Citi Bank, Connaught Place, New Delhi from the current account No.612 of Shri, Anil Sanghi and Associates in J & K Bank, NOIDA out of the amount of Rs. 27,64,93,670/- declared by Anil Sanghi as his undisclosed income for the block period offered fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue has come up for consideration before Hon'ble Karnataka High Court in the case cited as CIT and Another Vs H. E. Mynuddin Pasha, 338 ITR 533 and the operative part of which is reproduced as under: "SEARCH AND SEIZURE- BLOCK ASSESSMENTUNDISCLOSED INCOME- MEANING OF TAX DEDUCTED AT SOURCE FROM INCOME AND ADVANCE TAX PAID BY RECIPIENT - INCOME NOT UNDISCLOSED INCOME OF PARTNERS- FIRM DISCLOSING REMUNERATION TO PARTNERS AND DEDUCTING TAX AT SOURCE ON THEM - NO UNDISCLOSED INCOME IN HANDS OF PARTNERS -I.T. ACT, 1961 S.158BC. Undisclosed income for the purpose of block assessment has been defined under the I.T. Act, 1961. The proceedings under the regular assessment and the assessment for the block period stands to operate on different fie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deducted by Citi Bank at source for which TDS certificate has been issued and the income declared by the assessee in its regular return of income has already been accepted u/s 143(1) and 143(3) of the Act, the question does not arise to declare the interest income as 'undisclosed income'. The said income cannot be treated as undisclosed income because when the advance tax / TDS has been deducted by the bank itself then the income becomes 'disclosed income' of the assessee. The Assessing Officer has erred in declaring the interest income of the assessee for the Assessment Year 1997-98 as undisclosed income. 13. When the TDS has already been deducted by the Citi Bank on the interest income in question as referred to by the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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