TMI Blog2005 (2) TMI 440X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. In pursuance of the above search, a notice under s. 158BC dt. 20th Sept., 1999 was served on the assessee. The assessee filed a return of income for the block period on 5th Nov., 1999 returning an undisclosed income of Rs. 1,26,100. During the course of search on 13th July, 1999 in the case of one Shri T. Balakrishna, it came to the knowledge of the Department that Shri T. Balakrishna had taken advances to the tune of Rs. 50 lacs from the assessee. The advances were made during the previous year relevant to the asst. yr. 1999-2000 for which the due date for filing the return had not expired. The assessee also filed a regular return of income for the asst. yr. 1999-2000 on 4th Nov., 1999 declaring an income of Rs. 53,57,470 including the said amount of Rs. 50 lacs which was earned during the relevant previous year. The AO, vide his order under s. 158BC of the Act, dt. 27th Sept., 2000, assessed a sum of Rs. 50 lacs as undisclosed income of the block period and determined the total undisclosed income at Rs. 53,83,200. A regular assessment under s. 143(3) was also made for the asst. yr. 1999-2000 on the same date assessing the sum of Rs. 50 lacs protectively. Learned CIT(A) confirm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under s. 158B(b), does not mean that the disclosure has to be made by way of filing return of income. The decision would squarely apply to this case and therefore the addition of Rs. 50,00,000 being sum advanced to Mr. T. Balakrishna is to be deleted in view of the above decision. 5. Learned Departmental Representative, Shri Manjunatha Swamy strongly supported the orders of authorities below. He submitted that under s. 158BC what will constitute the undisclosed income which is not recorded in the books of accounts. At the time of survey, the books of account revealed that the transaction was not recorded pertaining to loan given to Shri T. Balakrishna. This was admitted by assessee not only in statement under s. 131 but even while filing a separate letter addressed to the AO. Thus, there is undisputed fact that advance is out of unaccounted income. He invited our attention to the question and answer during statement recorded under s. 131 on 13th July, 1999 extracted herein: "(7) Whether you have shown in your books of account, the amount has been given to Balakrishna? I have not shown above amount in my books of account. (8) What is the reason? This is because out of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inagar, Bangalore, by way of cash around one year back. I am to receive interest of 21 per cent per annum from Shri T. Balakrishna for the first one year. However, I have not received any interest till date from him. I have deposited this money Rs. 50,00,000 (Rupees fifty lacs) in M/s Mahaveer Jewellery and M/s Mahaveer Pawn Broker at Rajajinagar, Bangalore. I have not shown the amount in my books of account and I am offering this amount as undisclosed income as per law. I will make arrangements to pay the tax on the above income of Rs. 50,00,000 and interest income which I am going to earn, as per law. Yours faithfully, Sd/- 13th July, 1999" He relied upon the decision in L.R. Gupta Ors. vs. Union of India Ors. (1992) 101 CTR (Del) 179 : (1992) 194 ITR 32 (Del). He also submitted that the decision of Tribunal, Chennai Bench are on different set of facts wherein the due date for filing return of income was not over. He accordingly submitted that order of learned CIT(A) is to be upheld. 6.1 We have carefully considered the relevant facts, argument advanced and the decisions cited. The word "Undisclosed income" is defined in s. 158B(b) which reads as follows : " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 132. To compute the undisclosed income under s. 158BC, the same is to be based on material found during search conducted under s. 132 only and not survey conducted under s. 133A. The material should be found during search. The confirmation of undisclosed income declared during survey loses its character as 'undisclosed income' during search, as it is no longer undisclosed thereafter. Hon'ble Supreme Court in the case of CIT vs. Tarsem Kumar (1986) 58 CTR (SC) 129 : (1986) 161 ITR 505 (SC) was concerned with somewhat similar situation. In the said case the facts as noted are as under : "An amount of Rs. 93,500 which was, inter alia, seized from the respondent by the Customs authorities and lay in their custody, had to be returned to him pursuant to an order of the High Court in a writ petition. Before the amount was returned, the ITO served a warrant of authorization dt. 10th May, 1972, issued under s. 132 of the IT Act, 1961, on the respondent as well as on the Customs authorities and the IT authorities took possession of the amount. On a writ petition filed by the respondent, the High Court held that the IT authorities could not seize the amount from the Customs authorities u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been disclosed for the purposes of this Act, or income or property which would not have been disclosed for the purposes of this Act. 37. Disclosed for the purposes of this Act definitely means, disclosed for the purposes required by the various provisions contained in the IT Act, 1961. Disclosed for the purposes of the IT Act, 1961 does not mean, disclosed for the purposes of making an assessment alone. There is no such a restriction given in the definition of 'undisclosed income', so as to presume that particulars furnished by an assessee through filing a return of income alone constitute disclosing the particulars for the purposes of this Act. The assessee might be furnishing details and particulars regarding his property and income in compliance of the requirements made by appropriate authorities invoking different provisions of the IT Act, 1961. In the present case, the assessee has furnished the details regarding her business, investments in such businesses, sources of income, etc. Through her letter dt. 15th May, 1995, in compliance of the notice issued by the ADI, Madurai, under s. 131 of the IT Act. Disclosing certain details and particulars in compliance of a requisitio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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