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M/S. Sai Sree Developments Pvt. Ltd, ... vs Department Of Income Tax on 3 October, 2013 cites

Commissioner Of Income Tax-I vs Rana Gurjit Singh on 3 February, 2011

33. As far as the case of M/s SITES is concerned, we find that the assessee company commenced its business from 1/1/2003 and the search was conducted on 30/1/2003. Therefore, it is the first month of business and hence, the assesse could not maintain cash book and ledger but the assessee had issued acknowledgment for all the business receipts and remitted the cheques/DDs cash received into current account maintained with Allahabad Bank (cited Supra). The CIT(A) had observed at page 11 of his order that the the receipts issued were in fact seized during the course of search and that all the payments for business expenditure were made through account payee cheques from the bank account. Therefore, we find that the assessee has maintained the documents in the normal course of its business. Section 158BA(3) provides that where the assessee proves to the satisfaction of the AO that any part of the income referred to in sub sec. (1) thereof relates to the assessment year for which the previous year has not ended or the date of filing the return of income under sub sec. (1) of sec. 139 for any previous year has not expired and such income or the transactions relating to such income are recorded on or before the date of search or requisition in the books of accounts or other documents maintained in the normal course relating to such previous years, the said income shall not be included in the block IT(SS)A Nos.1 & 2/H/13 27 IT(SS)A Nos.6 & 8/H/12 ITA No.1033/1034/H/12 period. In the case before us, the previous year relevant to the period of search had not ended and the assessee's income is recorded in the documents maintained with the bank. Therefore, in our opinion, the provision of sub sec. (3) of sec. 158BA is very much applicable. The reliance of the assessee on the deicison of the Hon'ble Delhi High Court in the case CIT Vs. Maha Singh Rana reported in (2008) 172 Taxman 144 (Del) is in support of this contention. The Hon'ble High Court has held in the said case that an income would be treated as undisclosed income if but for the search, it would not have been disclosed in the books of account or other documents and that in the case therein, even before the search took place, the cash receipt/income was disclosed in the other document, i.e in the bank account of the assessee and, therefore, the provision of sec. 158BA(3) are applicable and the Revenue should have assessed the income of the assessee u/s 143(3) and not under Chapter XIV B of the Income- tax Act. We find that the facts of the present case are similar to the facts of the case before the Hon'ble Delhi High Court. Though the assessee has raised these grounds before the CIT(A,) the CIT(A) has not adjudicated on this issue but has granted relief to the assessee by holding that AO ought to have considered both receipts and the payments reflected in the bank account for arriving at the undisclosed IT(SS)A Nos.1 & 2/H/13 28 IT(SS)A Nos.6 & 8/H/12 ITA No.1033/1034/H/12 income and since it has not carried out such exercise, the total undisclosed income computed by the AO at Rs.4,75,70,510/- cannot be sustained. We have already observed above that since the previous year relevant to the assessment year had not expired by the date of the search and the assessee had disclosed the receipts and payments in the bank account maintained by the assessee and since the AO has made the additions only on the basis of the entries in the bank account, we are of the opinion that this income cannot be treated as undisclosed income during the block assessment. Therefore, the Revenue's appeal is dismissed.
Punjab-Haryana High Court Cites 11 - Cited by 4 - A K Mittal - Full Document
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