TMI Blog2006 (4) TMI 530X X X X Extracts X X X X X X X X Extracts X X X X ..... loans stated in ground No. 1 above as unexplained cash credit under section 68 is uncalled for being not on the basis of evidence found as a result of search or relatable to such evidence. 3.On facts and circumstances of the case, the learned Assessing Officer has failed to take the telescopic view of debit and credit entries in computation of undisclosed income . 4.On facts and circumstances of the case, the learned Assessing Officer should have given the relief of ₹ 3,66,609 out of unexplained jewellery, towards jewelleries acquired by Hindu Spouse on marriage before block period. This jewellery was not seized during search proceedings . 2. Ground Nos. 1 and 2 relate to the additions made on account of cash credits found during the course of the search. 3. We have heard the rival submissions and carefully perused the orders of the authorities below and documents placed on record. During the course of the search, assessee s regular books of accounts were found and from the ledger regularly maintained during the course of business it was noticed that there was a loan of ₹ 41,82,986 introduced in the name of various parties and an amount of ₹ 5,05,632 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings, entry in the books of account or other documents or transactions represents, wholly or partly income or property which has not been or would not have been disclosed for the purpose of this Act. If this definition of undisclosed income is applied to the facts of the present case, one would find that whatever entries were noticed by the Revenue, they all were disclosed in the ledger regularly maintained for the purpose of Income-tax, Act and later on the return was prepared on the basis of these documents and were filed with the department. In support of his contention, the learned counsel for the assessee has relied upon the following Judgments : 1.B. Noorsingh v. Union of India [2001] 249 ITR 378 (Mad.) 2.Dy. CIT v. Damodardas Jairambhai Wadhwa [2005] 2 SOT 98 (Kol.) 3.Smt. Sita Devi Daga v. Asstt. CIT [1998] 67 ITD 151 (Indore) 4.Kasturchand Baid v. Asstt. CIT [1997] 94 Taxman 226 (Nag.) (Mag.) (SMC). 5.M.P. Ramchandran Nair v. Asstt. CIT [1999] 102 Taxman 250 (Coch.) (Mag.) 6.Gulkandi Devi Agrawal v. Asstt. CIT [2000] 66 TTJ (Nag.) 844 7.Salvi Divakar Shankar v. Asstt. CIT [2000] 72 ITD 552 (Pune) 8.CIT v. Ashok Taksali [2002] 257 ITR 352 (Raj.) 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, shall be the aggregate of the total income of the previous years falling within the block period computed in accordance with the provisions of this Act, as reduced by the income declared and return filed before the due date. If the return was not filed before the due date, the income declared in the return, shall form a part of the block period irrespective of the fact that tax computed on the return was paid or deducted at source. In these circumstances, there is no infirmity in the mode of computation adopted by the department. 9. Having heard the rival submissions and from careful perusal of the record, we find that for the assessment year 1997-98, till the date of search i.e., 16-6-1998, assessee did not file its return of income. The return of income was filed on 31-3-1999 under section 139 (4) of the Income-tax Act. No doubt, the return was not filed before the due date of filing of return prescribed under section 139(1) of the Income-tax Act. But the return filed under section 139(4) cannot be called to be invalid return, as the Law permits to do so. The Act has provided an opportunity to the assessee to file a return of income under section 139(4) if it is not filed u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it has been held that where the return is filed under section 139(4) on the basis of books regularly maintained for the purpose of the Income-tax Act, income returned does not fall within the purview of undisclosed income. This Order of the Tribunal was later on upheld by the Madhya Pradesh High Court. Once, it is, established from the documents available on record that the books were maintained for the purpose of Income-tax Act, the income declared therein cannot be called as an income which would not have been disclosed for the purpose of the Act. The onus is upon the Revenue to bring some material on record to prove that the books were maintained for other purposes than the Income-tax Act and income declared in the return of income was an income which would not have been disclosed for the purpose of this Act. Similar view was expressed by the Pune Bench of the Tribunal in the case of Salivi Divakar Shankar (supra) in which it has been held that the salary income earned by the assessee from a Public Institution like RBI from which adequate tax was deducted at source though no return was filed by the assessee, cannot be treated as undisclosed income for the purpose of block asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . As regards the contention of the Department that the definition is illustrative and not exhaustive or that ordinary meaning of undisclosed has to be seen, does not appear tenable in the context of the case. As stated earlier, there are no restrictive words requiring disclosure by the assessee and in his return. Disclosure for the purpose of the Act has to be given a very wide meaning and in that sense an income from salary disclosed by the employer in the return under section 206 can be regarded as disclosure for the purpose of the Act and such income particularly when tax is deducted at source cannot constitute undisclosed income for the purpose of Chapter XIV-B. For the purpose of Chapter XIV-B reference to section 271(1)(c) is irrelevant as is clear from section 158BF. Similarly, Explanation 3 does not regard all cases of non-filing of return of cases of concealment. In the present case, tax was deducted at source adequately and being under a bona fide impression that no return is required to be filed, the assessee did not file the return. If this constituted reasonable cause, then even under Explanation 3 to section 271(1)(c) income would not have constituted concealed income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndisclosed income for the block period as per the definition of undisclosed income envisaged under section 158B(b) of the Income-tax Act. 13. Now, the next question comes with regard to the computation of undisclosed income of the block period for which mode was given in section 158BB of the Income-tax Act in which clause (ca) of sub-section (1) deals with this type of situation whenever return was not filed before the due date of filing of the return. According to this clause, the return of income should be taken as nil if it is not filed before the due date prescribed under section 139(1) of the Income-tax Act. Meaning thereby, nothing is to be reduced from the total income of the assessee of the previous years falling within the block period in order to compute undisclosed income. But, whenever it is held that particular income is not a part of undisclosed income, it cannot be considered as a part of the undisclosed income of the block period by adopting a mode of computation prescribed under section 158BB of the Income-tax Act. Clause (ca) does not deal all type of situations. There may be a situation where the assessee has not disclosed its income by any manner to the depar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we are of the view that the revenue authorities are not justified in treating this cash credit introduced in the regular books of account of the assessee and the interest paid thereon as part of undisclosed income for the block period. We, therefore, set aside the Order of the CIT(A) and direct the Assessing Officer to reduce the income computed on the basis of the ledger seized during the course of the search from the total undisclosed income for the block period. Accordingly, the additions made in this regard are hereby deleted. 15. The next ground relate to addition of ₹ 3,66,609 on account of unexplained investment in jewellery. In this regard, it is noticed that total jewellery of ₹ 14,16,738 was found from the premises of the assessee. The revenue authorities did not seize certain jewelleries worth ₹ 3,66,609 as the assessee s family is staying in the said premises which consisting of assessee himself, his wife Smt. Rajul, his son, Mr. Urmil, his daughter-in-law, Mrs. Sonal and his two daughters Miss. Ami and Miss Punita. As there were two married women and two unmarried daughters, the jewellery weighing 1,153.750 grams was not seized. It was contended o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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