TMI Blog2003 (1) TMI 229X X X X Extracts X X X X X X X X Extracts X X X X ..... ducted in the business premises of M/s Jalan Enterprises on 9th Nov., 1995 and similar gifts from strangers were found to have been recorded in the bank account. Accordingly, notices under s. 158BC r/w s. 158BD were issued to the assessee and aftercompletion of the proceedings block assessment was made against the assessee. 4. In ITA No. 1040/All/1997, search was conducted in the premises of Shri Radhey Shyam Jalan and in the business premises of M/s Jalan Enterprises on 9th Nov., 1995 and similar evidence of gift was recovered. Similar notices were issued under s. 158BC/BD to the assessee and block assessment was completed. 5. Lastly, in ITA No. 1041/All/1997, search was conducted in the residential premises of Shri Radhey Shyam Jalan on 9th Nov.,1995 and evidence of gift was recovered. Notices under s. 158BC r/w s. 158BD were issued to the assessee and after completion of the block assessment, respective additions were made by way of block assessment order. 6. The assessee is in appeal against the assessment orders on various grounds which are not necessary to be reproduced here. 7. We have heard the learned counsel for the assessee and the learned Departmental Repres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned counsel for the assessee whether in these cases the AO had been satisfied as required under s. 158BD before initiating the proceedings under s. 158BD. Sec. 158BD is reproduced for the sake of convenience: "158BD. Where the AO is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under s. 132 or whose books of account or other documents or any assets were requisitioned under s. 132A, then, the books of account, other documents or assets seized or requisitioned shall be handed over to the AO having jurisdiction over such other person and that AO shall proceed against such other person and the provisions of this Chapter shall apply accordingly." We had an occasion to deal with this point of law in the matter of M/s Vishwanath Prasad Ashok Kumar Sarraf, Varanasi in ITA No. 1574/All/1997 vide order dt. 29th Aug., 2002, on similar facts. Certain important points were noticed by the Tribunal, which we may mention briefly. Chapter XIV-B inserted by Finance Act, 1995, w.e.f. 1st July, 1995, provides special procedure for assessments in search cases. Sec. 158BC of the IT Act provides special procedure for block ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese two provisions under Chapter XIV-B is that for assessment under s. 158BC, the AO is not required to record his satisfaction before proceeding to determine the undisclosed income in respect of block period. However, in the case of s. 158BD, the AO, who had been handed over the seized material, documents and assets, etc. by the search party will have to satisfy himself that any undisclosed income belongs to any person other than the person searched under s. 132 or whose books of account or documents were requisitioned under s. 132A of the IT Act. Therefore, though it is not provided under the Act what satisfaction is to be recorded by the AO but the Act clearly provides that before proceedings under s. 158BD the AO, who received the seized material and documents from the search party, shall have to be satisfied that any undisclosed income belongs to any person other than the person searched. The difference is created in these two provisions of law under the same Chapter XIV-B that it should be the objective satisfaction of the AO and that satisfaction of the AO has to be on the material found during the search and the AO will have to identify that such seized material, which reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocedure for assessment of search cases under Chapter XIV-B is applicable to the case of different assessees. 15. The assessment could be made of undisclosed income if during the block period undisclosed income is recovered as a result of evidence found during the search. The definition of undisclosed income is given in s. 158B(b), which is reproduced for the sake of convenience : "158B(b) : "Undisclosed Income" includes any money, bullion, jewellery or other valuable article or thing or any income based on any entry in the books of account or other documents or transaction where such money, bullion, jewellery, valuable article, thing, entry in the books of account or other documents or transaction represents wholly or partly income or property which has not been or would not have been disclosed for the purpose of this Act. 16. Therefore, we propose to examine whether in the case of all the appellants/assessees any undisclosed income was recovered during the block period. (i) In ITA No. 1031/Alld/1997 return for asst. yr. 1994-95 was filed on 26th Oct., 1994 and balance sheet shows the loan. The assessment is also framed. (ii) In ITA No. 1032/Alld/1997 gift is shown ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e balance sheets. All these details clearly show that the assessees have shown their respective loans and gifts in their return of income prior to the search. Only in one case no return was filed in which gift-tax has been paid and advance tax was also paid earlier. Even according to the Revenue, all these loans and gifts are deposited in the respective bank accounts of the assessees. All the evidences and gifts and loans were also recovered during the course of search. The definition of undisclosed income clearly shows that the same could be treated as undisclosed income where such money, bullion, jewellery, valuable articles or things or any income based on any 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. However, all these details were shown in the respective returns of the assessees. The assessees had deposited all the amounts of loans and gifts in their bank accounts. The bank account is also shown in the balance sheet prior to the search. We have also examined that whatever income was treated as undisclosed income by the AO is con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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