9911796707
TMI Blog2005 (1) TMI 709X X X X Extracts X X X X X X X X Extracts X X X X ..... earing on the following substantial question of law: "Whether, in the facts and circumstances of the case, a notice under Section 158BD of the IT Act could have been issued and was justified to the appellant, despite the fact that return for the relevant asst. yr. 1996-97 showing the receipt of Rs. 6.66 lakhs from sale of plot had already been filed and tax liability on the same was also met?" 2. Facts necessary for the disposal of the appeal need mention in brief to appreciate the issue sought to be raised in this appeal. 3. A search operation was conducted under Section 132(1) of the IT Act in the residential premises of Shri Kripal Singh Bhatia, the husband of- assessee on 1st Feb., 1996. 4. In this raid operation, it was revealed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pter XIV-B. A notice under Section 142(1) was also issued. The assessee on 11th Sept., 1997 filed the return for the block period and disclosed her income at nil. 7. In block assessment proceedings, out of which this appeal arises, the contention of assessee was that, since the consideration was received on sale of capital asset (land), the assessee is liable to pay capital gains by paying tax at the rate of 20 per cent. It was also contended that since the income was not undisclosed and hence, the tax cannot be charged at the rate of 60 per cent as per Section 113 of IT Act which is applicable only to return of income disclosed under Section 158BC, i.e., block period assessment. The contention of assessee did not find favour either to AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious year has not expired, and such income or the transactions relating to such income are recorded on or before the date of the search or requisition in the books of account or other documents maintained in the normal course relating to such previous years, the said income shall not be included in the block period." 11. Perusal of definition of undisclosed income would show that it not only includes within its sweep, property which has not been disclosed by an assessee in his/her return but it also includes within its fold that property which would not have been disclosed for the purpose of this Act by the assessee. 12. Section 158BA(3) applies to those cases where some part of income, which is or can be made subject-matter of block ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is, as already mentioned supra; subject to the condition that entry must be made prior to the date of search and not subsequent to it. The object underlined in Sub-section (3) is very clear. If the intention of assessee is to pay normal rate of. tax, he .would disclose all the income/transaction in his/her books of account. But if his/her intention is to evade the tax, then he/she would not disclose the income/ transaction in his/her books of accounts thereby will enjoy the income without paying any tax on it. It is only when he/she is subjected to search operation, he/she would make entry in his/her books subsequent to date of search to avoid higher rate of tax at 60 per cent. Such entry, i.e., an entry made subsequent to date of search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale deed recited a sale consideration of Rs. 9 lakhs. Secondly, only a sum of Rs. 9 lakhs was shown to be received by cheque. Thirdly, the balance amount of Rs. 20,60,000 received in cash was not entered in the books of account of any of trio, nor was anywhere disclosed in any document such as bank account or in wealth-tax returns or in the form of issuing a receipt in favour of purchaser against sale consideration by any of the trio including the assessee to the extent of her l/3rd share of Rs. 6,66,666. In this view, the intention of assessee was not to disclose receipt of Rs. 20,00,000 or her l/3rd share out of Rs. 20,00,000, i.e., Rs. 6,66,666 in her income for the year in question. It was thus a clear case which falls in the wordings ..... X X X X Extracts X X X X X X X X Extracts X X X X
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