TMI Blog1999 (9) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... yr. 1987-88 and asst. yr. 1988-89 on 29th June, 1987, and 30th July, 1998, respectively. Search under s. 132 was carried out at the assessee's business premises as well as at the residence of its managing director and other director on 29th Nov., 1988, and 30th Nov., 1988. 5. During the course of search on 29th Nov., 1988 at the residence of premises No. 44, Thornhill Road, Allahabad, Sri Shyama Charan Gupta, managing director of the assessee-company disclosed an amount of Rs. 50 lakhs on account of various undisclosed investments, as the assessee's income, whereas during the course of search on 30th Nov., 1988 at the business premises of M/s Shyam Biri Works (P) Ltd. the assessee's director Sri Uma Charan Gupta disclosed a sum of Rs. 32,24,000 on account of unrecorded entries in regular books. Later on the assessee seems to have furnished an affidavit giving year-wise details of disclosed income of Rs. 33 lakhs as well as undisclosed income of Rs. 14,83,845. The year-wise details of disclosed income in the hand of 'Shyam Biri Works' and 'M/s Shyam Biri Works (P) Ltd.' were as under: ------------------------------------------------------------------ Assessment Shyam Biri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : Deduction under s. 80HH 22,662 --------- Total income 10,46,370 --------- Asst. yr. 1988-89 Profit as per P L a/c 15,58,754 Add: (a) Depreciation for separate consideration 7,38,230 (b) Excess amount of travelling expenses 615 (c) Donation 43,774 (d) Income disclosed under s. 132(4) 13,30,000 21,12,619 --------- --------- Gross Total 36,71,373 Less: Depreciation allowable under IT Rules 12,93,984 --------- 23,77,389 Less: Deduction under s. 80HH 38,371 Deduction under s. 80HHA 7,417 45,788 --------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned Departmental Representative emphasised that the benefit under cl. (2) of Expln. 5 to s. 271(1)(c) are available only for the previous year during which the search action has taken place and for this purpose he strongly relied on the existence of words "Return of income to be furnished before expiry of time specified in cl. (a) or cl. (b) of sub-s. (1) of s. 139". The learned Departmental Representative submitted that immunity was available only with respect to the return which has not yet fallen due as per provisions of s. 139(1)(a) and 139(1)(b) which otherwise means that the immunity was available only for the period which fell under the definition of previous year during which search was conducted. According to him, since in the present case, the search was conducted on 29th the 30th Nov., 1988, the benefit as per cl. (2) of Expln. 5 to s. 271(1)(c) were available only with respect to previous year 1988-89 relevant to asst. yr. 1989-90, for which the Revenue has not imposed any penalty. Objecting to the assessee's claim that the disclosure was a result of understanding given by the Revenue that assessee will not be subjected to any penalty under s. 271(1)(c) and pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the books of account, if any, maintained by him for any source of income or such income is otherwise disclosed to the Chief CIT or CIT before the said date; or (2) he, in the course of the search, makes a statement under sub-s. (4) of s. 132 that any money, bullion, jewellery or other valuable article or thing found in his possession or under his control, has been acquired out of his income which has not been disclosed so far in his return of income to be furnished before the expiry of time specified in sub-s. (1) of s. 139 and also specifies in the statement the manner in which such income has been derived and pays the tax, together with interest, if any, in respect of such income." 11. After careful consideration of cl. (2), what we are able to understand is that the words "Return of income to be furnished before the expiry of time specified in cls. (a) and (b) of sub-s. (1) of s. 139", cannot be read without the words "Income which has not been disclosed so far in his return of income" preceding the aforesaid words and if we read the complete sentence which is comprising out of words "has been acquired out of his income which has not been disclosed so far in his return of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Expln. 5 to s. 271(1)(c). 15. With regard to the assessee's claim that the disclosure was as a result of understanding given by the authorised officer that the assessee will not be subjected to penalty under s. 271(1)(c) or the prosecution, though there is no evidence on record to support the plea but the question No. 8 put by the authorised officer to Shri Uma Charan Gupta while recording his statement under s. 132(4) of the Act during the course of search at business premises of the assessee on 30th Nov., 1988, leads one to understand that the officer, if had not given any assurance, at least might have induced the assessee by explaining the immunity available under this clause. Whatever may have been the story behind the putting such a question, one cannot ignore the existence of question No. 8 in the statement recorded under s. 132(4) which, if not directly, at least indirectly indicates that the assessee was given some assurance, but since the disclosure by Shri Uma Charan Gupta was only to the extent of Rs. 32,24,000 and it is not clear as to whether income disclosed in these two assessments was out of another disclosed income of Rs. 50,00,000 the assessee cannot be b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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