Itta/275/2008 Of Sri Mangaram Choudary [Huf] v. The Assistant Commissioner Of Income Tax

IN THE HIGH COURT FOR THE STATE OF TELANGANAAT HYDERABAD THURSDAY,THE TWENTY FIRST DAY OF AUGUSTTWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHYANDTHE HONOURABLE SRI JUSTICE NARSING RAO NANDIKONDAtNcoME TAX TRIBUNAL APPEAL NO: 275 OF 2008 (lncome Tax Tribunal Appeal under Section 260 A of the lncome [Tax ][Act., ][196'l]against the order made in l.T.(S.S.)A.No.65lHydl2025, [for the ][Block ][Assessment]Years 1997-98 to 2003-04 Dated 28.02.2008 on the file of the [lncome ][Tax Appellate]Tribunal, Hyderabad ["8" ]Bench, Hyderabad [preferred ][against ][the ][Order ][of ][the]Commissioner of lncome Tax (Appeals)-Vl, Hyderabad [in 1.T.A.No.0137&0139/ACIT-]11(1)/Hyd/Clf(A)-Vl 2004-05 Dated 24.01.2005 [preferred against ][the ][Order ][of ][the]Asst.Commissioner of lncome Tax, Circle-1 [1 ][(1), ]Hyderabad [made ][in ] No.M-202 Dated 28.06.2004. Between:Srl Mangaram Choudary , S/o Sri Ghisaramji [Rlo ][32-37, ][New ][ltlarket ][Road,]Shapurnagar, Hyderabad...APPELLANTAND r AND The Assistant Commissioner of lncome Tax,, [Circle ][11 ]['1], [Hyderabad.] ..,RESPONDENT Counsel for the Appellant : Ms.VAISHNAVI [REP.SRI. S RAVI] Counsel for the Respondent: SRI P.MURALI S.C FOR INCOME TAX The Court made the following: JUDGMENT -, THE HONOURABLE SRI JUSTICE P.SAM KOSHYANDTHE HON'BLE SRI JUSTICE NARSING RAO NANDIKONDAINCOME TAX TRIBUNAL APPEAL NO.275 of 2OO8WDGMENT: (per Hon,ble Sri.htstice Narsing Rao Nandikonda) This appeal is filed arising out of the order, dated28.O2.2OO8 in IT (SS) A No.65/Hyd/2O05 passed by the iearnedIncome Tax Appellate Tribuna_l, Bench "B" Hyderabad (for short,'the Tribunal') for the Assessment years 1997- 199g to 2003_2004. 2. The brief facts of the case are that_ the appellant has been engaged in the business of purchase and sale of gold andsilver articles under the name and st5rle of M/s.Choudharysilver articles under the name and st5rle of M/s.ChoudharyJewellery ald Silver Palace. It is stated that as ori today, theappellant is looking after the business as Karta of HinduUndivided Famrly (HUF). While so, a survey was conductedunder Section 133 A of the Income Tax Act, i96l (for short, theAct, 196 1') on 2I.O3.2O03 at the business premises of theappellant is looking after the business as Karta of HinduUndivided Famrly (HUF). While so, a survey was conductedunder Section 133 A of the Income Tax Act, i96l (for short, theAct, 196 1') on 2I.O3.2O03 at the business premises of theappellant and found excess stock of gold a,d silver articresworth Rs.47,97,837 /- and the szune was admitted bv the 2PSXJ&NNRJ|TTA 775 2008 appellant in his sworn statement. Pursuant [to ][the ][sarne, a]warrant of search under Section 132 [of ][the ][Act, ][196 1 ][was issued]by the Director of Income [Tax ][(Investigation), Hyderabad, ][which]was executed on the appellant on [21.03.2003 and ][the ][same was]lrnally concluded on 25.O4.2OO3. [His ][statement ][was ][also]recorded under Section 132 [(4) ]of [the ][Act, ][1961 ][on ][21.O3.2OO3]arrd again on 26.03.2003, [wherein ][he ][admitted ][that ][there ][is]excess stock of gold and silver [articles ][worth ][Rs-47 ],97 [,837 ]/-,which was not disciosed in the [regular ][books of accolrnts.] 3. In the affrdavit frled in support [of ][the petition, ][it ][is]stated that in response to the [notice, ][dated ][ll.O7.2OO3, ][issued]under Section 158 BC of [the ][Act, ][1961, ][the ][appellant ][ftled]income tax returns on 18.09.2003 [for ][the ][block ][period ][of]01.O4.1996 to 21.03.2003 [showing hndisclosed income' ][as'NIL']He further stated that he [also ][filed ][regular ][income ][tax ][returns]for the Assessment Year 2OO3-2OO4 [showing ][the total ][income ][at]Rs.47,28,O77/- which includes [sum ][Rs-46,O3,947 ]l- [being]tndisclosed income' of [gold ]and silver [articles ][detected ][during]the course of survey proceedings. It [is ][further ][case ][of ][the] PSKJ&NiIRJ|TTA 275 2008 3. In the affrdavit frled in support [of ][the petition, ][it ][is]stated that in response to the [notice, ][dated ][ll.O7.2OO3, ][issued]under Section 158 BC of [the ][Act, ][1961, ][the ][appellant ][ftled]income tax returns on 18.09.2003 [for ][the ][block ][period ][of]01.O4.1996 to 21.03.2003 [showing hndisclosed income' ][as'NIL']He further stated that he [also ][filed ][regular ][income ][tax ][returns]for the Assessment Year 2OO3-2OO4 [showing ][the total ][income ][at]Rs.47,28,O77/- which includes [sum ][Rs-46,O3,947 ]l- [being]tndisclosed income' of [gold ]and silver [articles ][detected ][during]the course of survey proceedings. It [is ][further ][case ][of ][the] PSKJ&NiIRJ|TTA 275 2008 appellaxt that though the unaccounted gold and silver articleswere detected and admitted by him as hndisclosed income,during the course of survey proceedings, the same are not liablefor tax in regular assessment proceedings. But, withoutconsidering the same, the Assessing Offrcer held that theunaccounted gold and silver articles worth Rs.47,33,192/- isliable to be taxed under Section 158 BC of the Act. 1961 anderroneously passed the impugned order.during the course of survey proceedings, the same are not liablefor tax in regular assessment proceedings. But, withoutconsidering the same, the Assessing Offrcer held that theunaccounted gold and silver articles worth Rs.47,33,192/- isliable to be taxed under Section 158 BC of the Act. 1961 anderroneously passed the impugned order. 4. It is further case of the appellant that aggrieved byis further case of the appellant that aggrieved byfurther case of the appellant that aggrieved bycase of the appellant that aggrieved byof the appellant that aggrieved bythe appellant that aggrieved byappellant that aggrieved bythat aggrieved byaggrieved bythe order, dated 28.06.2004, passed by the Assessing Offrcerunder Section 158BC of the Act, 1961 for the block period01.04.1996 to 21.O3.2OO3 and the appeal No.O139/CIT (A)_YI/2O04-OS filed against the order, dated 28.O6.LOO+ pr"""dunder Section 143 (3) of the Act, 1961 for the Assessment year2OO3-2OO4, the appellant hled appeals before the Commissionerof Income Tax (Appeals)-Vl, Hyderabad. The Commissioner ofIncome Tax placing reliance on the judgment of High Court ofDelhi in L.R.Gupta v. Union of Indiar held that [,Undisclosed] It is further case of the appellant that aggrieved byis further case of the appellant that aggrieved byfurther case of the appellant that aggrieved bycase of the appellant that aggrieved byof the appellant that aggrieved bythe appellant that aggrieved byappellant that aggrieved bythat aggrieved byaggrieved by ' tga trR :2 ) P5K,J&NNRJITTA 275 [2008] Income' means it [was ][hid.den ][from ][the ][Department ][and if]was [aware ][of its ][existence ][then ][it ][was ][not]Department undisclosed income [and hnally ][the ][Commissioner ][concluded]that the income [which was ][already ][detected ][in ][the ][course ][of]under [Section ][133A ][ofthe ][Act, ][1961 ][cannot ][be ][treated ][as]survey hndisclosed [income' ][for ][the ][purposes ][of ][search ][under ][Section]l32oftheAct,lg6landaccordingly,allowedtheappeals'Aggrieved by the [order ][passed ][by ][the ][Commissioner' ][the]hled [arr ][appeal ][vide ][Appeal ][No'IT ][(SS) ][A]Department No.65/Hyd,12005 [before ][the ][Income ][Tax ][Appellate Tribunal']Bench 'B', Hyderabad, [and ][the ][said ][appeal ][was ][allowed]that [the ][excess ][unaccounted ][stock ][sha1l ][be ][liable to ][be]observing assessed in [block ][assessment proceedings ][o.tly. ] [6gg.i.ved ][by]the same, the [present ][appeal ][is ][frled ][by ][the ][appellant'] 5. Heard Ms.Vaishnavi [Ambadipudi, learned ][counsel]Sri [S.Ravi, ][learned Senior ][Counsel appearing for]representing the appellant ald [Sri ][P.Murali Krishna, ][learned ][standing]counsel for [Income ][Tax, appearing ][for ][the respondent'] - PSKJ& IIRJ|TTA ?75 2008 6. 5. Heard Ms.Vaishnavi [Ambadipudi, learned ][counsel]Sri [S.Ravi, ][learned Senior ][Counsel appearing for]representing the appellant ald [Sri ][P.Murali Krishna, ][learned ][standing]counsel for [Income ][Tax, appearing ][for ][the respondent'] - PSKJ& IIRJ|TTA ?75 2008 6. 6. Learned counsel for the appellant has argued andcontented that the arnount of Rs.47,97,837 l- cannot be treatedas l-rndisclosed income' as deflned in sub-section (1) (b) ofSection 1588 of the Act 196 1, it cannot be taxed. The saidSection reads as follows: '1588 [Definitions-In ]this [Chapter, ]unless the contextotherwise require- (a) .... (b) "undisclosed income" includes any money, bullion, jewellery or othervaluable artir:le or thing or any income based on any entr!, in the books ofaccount or other documents or transactions, where such money, bullion,jewellery, valualtle article, thing, entry. in the books of account or otherdocument or tralsaction represents wholly or partty income or properq.,which has not been or would not have been disctosed for the purposes ofthis Act [or aly expense, deduction or allowalce claimed under this Actwhich is found to be false]" She further argued that only the income which hal to be taxed is under sub-section (1) of Section 1588 of the Act, 1961, whichf-1r -----r cia(ts ias t(Jlluw s 15888. CoEputatioE of utdisclosed income of the block period.-(1| The 'undisclosed income' of the block period shall be the aggregate ofthe total-inconre of the previous years falling within the block period(1| The 'undisclosed income' of the block period shall be the aggregate ofthe total-inconre of the previous years falling within the block periodcomputed [in accordance with the provisions of this Act, on the basis ofevidence found as a result of search or requisition of books of account orother documents and such other materials or information as areother documents and such other materials or information as areavailable \yith rhe Assessing Ofllcer arld relatable to such evidence], as 6PSKJ&NNRJtl't a,275,2A)g reduced [by the ][aggregate ][of the ][total ][ilrcome' or ][as ][the ][case ][may ][be' ][as]increased [by the ][aggregate ][of ][the ][losses ][of ][such ][previous ][Years']determined- makes [[it clear that ]][[the]] makes [[it clear that ]][[the]]7. The [said ][Provlslon]hndisclosed [income' for ][the ][block period ][i'e'' ][from ][O1'04' 1996 ][to]2l.03.2003shouldbecomputedonthebasisofevidenceadduced. [She ][further ][argued ][that the ][appellant ][has ][disclosed]the trndisclosed [income' ][during ][survey ][before ][initiating ][search]proceedings. [Hence' ][the ][same ][cannot ][be ][taken as ][hndisclosed]income, [and ][she ][supported ][the ][order ][passed ][by ][the ][learned]Commissioner [of ][Income ][Tax (Appeals)' ][In ][support ][of ][her]contentions, [she also ][placed reliance ][on the ][judgment ][of ][High ][of]Madras [in ][case ][of Smt' ][Sivabala Devi ][v' ][ACIT2'] 8. Per contra'learned [Standing ][Counsel ][ior ][Income Tax]Department [appearing ][for the ][respondents vehemently ][argued]and supported [the ][order ][passed ][by ][the ][Income ][Tax ][Appellate]He further [contended ][that ][the]Tribunal [Bench ]['B', ][HYderabad']196l Prescribes [a ][sPecial]of Income [Tax ][Act,]provlslonsprocedure [for ][Assessment ][of ][search cases ][(i'e'' ][cases ][where] l/ ' [roo+ ][8g ][tto ][133 ][vlo] PSKJ&NflRJ|TTA 275 2008 search is initiated under Section 132) for search initiated after30.06.1995 alcl on or before 31.OS.2003, in which [.Undisclosed]Income' has been found. No such kind of special procedure isprescribed for making assessment on the basis of informationcollected during the course of survey under Section 133A of theAct, 1961. 9. It is an admitted fact that the appellant. being Hindu l/ ' [roo+ ][8g ][tto ][133 ][vlo] PSKJ&NflRJ|TTA 275 2008 search is initiated under Section 132) for search initiated after30.06.1995 alcl on or before 31.OS.2003, in which [.Undisclosed]Income' has been found. No such kind of special procedure isprescribed for making assessment on the basis of informationcollected during the course of survey under Section 133A of theAct, 1961. 9. It is an admitted fact that the appellant. being Hindu Undivided Family, engaged in the business of purchase and saleof gold and silver articles under the name and style ofM/s. Choudhary Jewellery and Silver palace. It is also not indispute that there was a survey operation conducted on21.O3.2OO3 under Section 133,4 of the Act, 1961, in thetSitrr". business premises of M/s. Choudhary Jewellery A palaceby the Income Tax officials. During the survey., they foundexcess stock of gold and silver articles worth Rs.47 ,97,g32 / ,which was not accounted in the regular books of accountsmaintained by the appellant arrd he also failed to explain theIsource bf investment of excess gold and s ver at the time ofsurvey. It is also not in dispute that after excess stock was PSKJ&NNRJrrTA 275 2008 found, a warrant under [Section ][132 ] [of ][the ][Act, ][1961 ][was]issued and the sarne [was ][concluded ][on ][25.03'2003 ][and ][the]respondents found cash [of ][Rs.9,840/- ][and ][15,319'67 gms of]gold and 124.624 kgs of silver. [It ][is not ][in ][dispute ][that ][the ][same]was not seized for the [reason ][that ][the ][appellalt ][undertook ][to]pay the entire amount of [tax ][Rs.28.80 ][lakhs ][relatable ][to ][the]value of excess stock of [Rs-48 ][lakhs, admitted ][\rndisclosed]income'. A notice under [Section ][158 ] [of ][the ][Act, ][196 ][1 was]issued on 1 1.07.2003 [and ][pursuant ][to ][the ][said ][notice, ][the]appellant f,rled [returns ][for ][Block ][Period ][Ol ]['O4 ]['1996 ][to]2I.O3.2OO3. Thereafter, [the ][appellant ][also frled ][regular returns]for the Assessment [Year ][2OO3-2O04 ][on ][18'09'2003 ][showing ][total]incorne of Rs.47,28,o77 /- [which ][included ][Rs.46,bQ,947/- ][being]investment [in ][gold ][ald ][silver articles ][disclosed at]unexplained the time of search admitting [undisputed ][income ][as ]['Nif ][in ][the]status of Hindu Undivided [FamilY.] 10. No doubt, as per the Judgment of High Court ofMadras in Commissioner of Income Tax v. Sivabala Dewi3 at paragraph Nos.61 arrd 62 it was held as under: 61. It will be worthwhile to refer to the principles laid down bv thehon'ble Supreme Court while working out ihe provisions underChapter XI\t B of the Act for making block assessment of''undisclosed income". In the decision reported in Asst, CIT v.Hotel BIue Moon (2010) 321 ITR 362 (SC), where the hon,bteSupreme Corrrt has held as under in paragraph l2 (page 3(;g): "12. Chapter XIV-B provides for an assessment olthe undisclosed income unearthed as a result o[search $ithout affecting the regular assessment madeor to bc rnade. Search is the sine qua non for the blockassessment. The special provisions are devised tooperate in the distinct field of undisclosed income andare clearly in addition to the regular assessmentscoverilg the previous years falling in the block period.The special procedure of Chapter XIV B is intended toprovide a mode of assessment of undisclosed income,which has been detected as a result of search. It-is notintended to be substituted for regular assessment, Itsscope arld ambit is limited in that sense to materialsunearthed during search. It is in addition to theregular assessment already done or to be done. Theassessment for the block period can only be done on \the basis of evidence found as a result of search orrequisition of books of account or documents andsuch other materials or information as. are availablewith the Assessing Officer. Therefore, the incomeassessable in block assessment under Chapter XIV Bis the income not disclosed but found ald determinedas the result of search under section 132 orrequisition under section 132A of the Act.', 62. Similarly in the decision reported in Manish Maleshrvan v.Asst. CIT (2OO7) 2a9 ITR 341 (SC), it has been hetd as under inparagraph 11 (page 348); "11 The condition precedent for invoking a btock assessment is that a search has been conducted '1zorr1 z:z crR ::z PSKJ&NNRJ|TTA 275 2008 under section 132, or documents or [assets ][have ][been]requisitioned under section [132A- ][The ][said ][provision]would apply in the case of ar-ry [person ][in ][respect ][of]whom search has been carried out under [section ][132A]or documents or assets have [been ][requisitioned ][under]section 1324. Section [158E}D, ][however, ][provides ][for]taking recourse to a block [assessment ][in ][terms ][of]section 1588C in respect of [any other ][person, ][the]conditions precedent wherefor [are ][: ][(i) ][satisfaction]must be recorded by the [Assessing ][Officer ][that ][arry]undisclosed income [belongs ][to any ][person, ][other ][than]the person with respect to [whom ][search ][was ][made]under section 132 [of ]the [Act ]; [(ii) ][the ][books of account]or other documents or [assets ][seized ][or ][requisrtioned]had been handed over to [the Assessing Officer having]jurisdiction over such other person ; ald {iii) [the]Assessing OIIicer has [proceeded ][under section ][1588C]against such other [person."] 11. He also relied on the [judgment ][of the ][Honlcle] Supreme Court in Commissioner [of lncome ][Tax' ][Chennai] v. S.Ajit Kumar (in Civil [appeal ][Nos. ][10917 ][of ][2013,]4449 of 2015, 5255 of2015 [and ][10165 ][of2OlO) ][wherein]the Honle Supreme Court [was ][pleased ][to ][allow ][all ][the]appeals vide [judgment ]dated, [O2.O5.2O18 ][and at ][pa-ragraph]Nos.8, 10 arrd. 12 of the said [Judgment, ][it ][was ][held ][as]under: 8) In the [present ]case, the [period ]for [Block ][Assessment is]01.04. 1996 to 77 .O7.2OO2. Section [153,4. ][of ][the ][Income Tax]Act, 1961 (for brevity "the IT Act") [provides ][the pro ][cedure]for completion of assessment where [a ][search ][is ][initiated]under Section 132 of the IT Act or [books ][of ][account or] other documents or any asset arerequisitioned underSection l324 of the lT Act. 10) In the instant case, the office and residential premisesof the assessee searched on 17.07 -2OO2 and hnallyof the assessee searched on 17.07 -2OO2 and hnallyconcluded on 21.O8.2OO2. During the course of search,certain evidence were found which showed that theassessee had indulged in under statement of his realincome relating to the btock period from 01.04_1996 to17.O7.2OO2. Consequently, a notice dated 25.02.20O3.under Secrron 1588C of the IT Act, was issued to theunder Secrron 1588C of the IT Act, was issued to theassessee and he was asked to hle block assessment. lnreply to suc1.r notice, the assessee filed return onreply to suc1.r notice, the assessee filed return on11.08.2003. admitting the undisclosed income as .NIL-" 12) ['lhe ]me(hod of calculating the undisclosed income ofthe block period is provided under Section ISSBB of tJle lTAct. It woukl be appropriate to re-produce the relevant partof Sectrons I 58BB and 158 BH of the IT Act which is aslollows: "lsaBB. Computation of undisclosed income ofthe block period. -(t ) The undisclosed income of the blockperiod shall be the aggregate of the total income of theprevious vear fajling within the block period computed, t in accordanr;e \vith the provisions of tllis Act, on the basiso[ evidnnce found as a result of search or requisition o[books of account or other documents arrd such othermaterials or information as are available with thcAssessing ()fficer and relatable to such evidence, asreduced by the aggregate of the totat income tf,r,case may lre. as increased by tlle aggregate of the o. ^" losses o,such previou s year determined...... 158BH. Application of other provisions of this Act _ Save as other-\r.ise provided in this Chapter, all other tz P5K,J&NNR,ltrra 275 [2008] provisions of this [Act shall apply ][to assessment made]under this [ChaPter."] (Emphasis suPPlied) t in accordanr;e \vith the provisions of tllis Act, on the basiso[ evidnnce found as a result of search or requisition o[books of account or other documents arrd such othermaterials or information as are available with thcAssessing ()fficer and relatable to such evidence, asreduced by the aggregate of the totat income tf,r,case may lre. as increased by tlle aggregate of the o. ^" losses o,such previou s year determined...... 158BH. Application of other provisions of this Act _ Save as other-\r.ise provided in this Chapter, all other tz P5K,J&NNR,ltrra 275 [2008] provisions of this [Act shall apply ][to assessment made]under this [ChaPter."] (Emphasis suPPlied) L2. The [method of ][calculating ][the ][hndisclosed ][income' ][of]the block [period ][is ][provided ][under ][Section ][15888 ][of the ][Act']1961. It would [be ][appropriate ][to ][re-produce the relevant ][part ][of]Sectionsl58BBandl58BHoftheAct'1961'whichreadsasunder: "15aBB. Computation [of ][undisclosed income ][of ][the ][block]period.-(1) The [undisclosed ][ilcome ][of t}re ][block ][period ][shall]be the [aggregate ][of ][the total ][income ][of ][the ][previous ][year]within [the ][block period ][computed' ][in ][accordance ][with]falling the provisions [of ][this ][Act, on the ][basis of ][evidence ][found ][as]a result of [search or ][requisition ][of books ][of ][account or ][other]documents [artd such other materials ][or ][information as ][are]available with [the ][Assessing Offrcer ][and ][relatable ][to ][|uch]evidence, as [reduced ][by ][the ][aggregate ][of the total ][-"oti ]'or, as the [case ][may be, as increased ][by the ][aggregate ][of ][the]losses [gf ]such [previous year determined ]['] 158BII. Application [of ][other ][provisions ][of this Act ][Save ][as]otherwise [provided ][in ][this ][Chapter, ][atl ][other ][provisrons ][of]this Act [shall]apply to assessment [made ][under ][this]Chapter." lEaphask [suPPlted)] PSKJ&N RJITTA 275 200a 13. Admittedly, in the present case, the appellalt hereinfiled Income Ta_x Returns on 18.09.2003 for the block period i.e.,on O1.04. 1996 to 21.O3.2OO3 and thereaJter, the appellant alsof,rled regular returns for the Assessment year 2003_2004 on18.09.2003 showing total income at Rs.47,2g,OT7/,, whrchincluded Rs.46,03,947 / , the hndisputed income, as .NIL,. But,the case of the appeilalt is that all along amount ofRs.47,33, 192 / cannot be treated as an trndisclosed income, asdefined in clause (b) of Section lSgB of the Act, 196 1, as such itcannot be taxed. 14. There is no dispute that basing on the evidencewhich is found during search and seizure operation, the\assessee has not accounted for the gold and silver articlesamotrnting to Rs.47,97,g15/-. But, according to the appellant,the hndisclosed income,was treated as NIL and he also paidregular income tax returns on 1g.O9.2003 in the status of HinduUndivided Familt. for the Assessment year 2003_2004 showingtotal income of Rs.47,2g,0ZZ which included /-, Rs.46,O3,947 /the hndisclosed amount. The Assistant Commissioner of PSKJ&NNRJ|TTA 275 ! Income Tax [at ][paragraph ][No'S ][of the ][Assessment ][Order' ][dated]2A.06.2004, [it ][was ][held ][as ][under:] 'Thus a [combined reading ][of the dehnition of 'undisclosed ][income' ][as]also the [provisions ][of ][charging section ][mandates ][that ][any ][income]represented by [unaccounted ][assets ][found ][as ][a ][result ][of ][search ][is]to [be assessed ][only ][as ][per ][the ][provisions contained ][in ][Chapter-]required XIVB but not [under regular ][procedure ][l ][have' ][therefore' no hesitation]in my mind to tax [the income relatable to ][excess ][stock ][found ][as ][a ][result]o[ search under [the ][provisions ][of ][Chapter-XIVB ][of ][the ][Act ][Hence' the]contention of [the ][assessee ][that ][the ][income ][is ][assessable ][in ][the ][regular]return is [rejected."] Income Tax [at ][paragraph ][No'S ][of the ][Assessment ][Order' ][dated]2A.06.2004, [it ][was ][held ][as ][under:] 'Thus a [combined reading ][of the dehnition of 'undisclosed ][income' ][as]also the [provisions ][of ][charging section ][mandates ][that ][any ][income]represented by [unaccounted ][assets ][found ][as ][a ][result ][of ][search ][is]to [be assessed ][only ][as ][per ][the ][provisions contained ][in ][Chapter-]required XIVB but not [under regular ][procedure ][l ][have' ][therefore' no hesitation]in my mind to tax [the income relatable to ][excess ][stock ][found ][as ][a ][result]o[ search under [the ][provisions ][of ][Chapter-XIVB ][of ][the ][Act ][Hence' the]contention of [the ][assessee ][that ][the ][income ][is ][assessable ][in ][the ][regular]return is [rejected."] As per definition [1588A ][(2) ][of ][the ][Act ][1961' ][the ][total ][undisclosed]income relating [to ][the block period shall ][be charged ][to ][tax' at ][the ][rate]specihed in [Section ][1 ][13, ][as ][income ][of ][the block ][period ][-] As per [158BA (2) ][(c) ]- [the ][income ][assessed ][shall ][not ][be ][included ][in ][the]regular assessment [of any ][previous year included ][in ][the ][block ][period'] 15. In the [present ][case, ][admittedly' ][the appellant ][has ][not]included the [hndisclosed ][income' ][in ][the ][returns ][hled by ][him ][for]the block Period [01.04'1996][ to ][21.03.2003 ][and ][showing ][the]same as 'NIL.' [The ][assessee ][has ][to ][prove ][the ][sarne before the]Officer [that ][the ][transaction ][relating ][to ]['undisclosed]Assessing income' [was ][recorded ][in ][the ][books ][of ][account ][or ][other ][records]maintained in [the normal ][course. ][Further, ][aS ][the ][aSSeSSee ][has]not accounted [for investment ][of ][excess ][gold ][a-nd ][silver articles of] PSK,J&I{NRJtfiA-215 200a Rs.46,O3,947 /rn the regular bool<s of accounts, theregular bool<s of accounts, theAssessment proceedings were initiated under Section 158BC ofthe Act, 196 Ithe Act, 196 I Admitedly, the said gold andand silver articles were notnot 16.Admitedly, the said gold andand silver articles were notnotthe said gold andand silver articles were notnotrecorded, the income assessed shall not be included in theregrlar assessment of any previous year included in the blockperiod, as such the contention of the appeltant that the Tribunalhas commrtted error in comtng to the conclusion that theappellalt is liable to be assessed under Section regrlar assessment of any previous year included in the blockperiod, as such the contention of the appeltant that the Tribunalhas commrtted error in comtng to the conclusion that theappellalt is liable to be assessed under Section 15gBA of theAct, 196 1 and not Section 156 (3) of the Act ca_nnot be acceptedand the income has to be assessed in the block assessmentperiod.Act, 196 1 and not Section 156 (3) of the Act ca_nnot be acceptedand the income has to be assessed in the block assessmentperiod. 17. The proviso to Section lSgBA3 of the Act, 1961 would not be applicable to the case of the appellant as such, thisbench is of the opinion that the arguments made by learnedbench is of the opinion that the arguments made by learnedcounsel for the appellant cannot be accepted and the substaltialquestion of lalr, is answerecl in favour of the revenue ald we donot find arty error committed by the Tribunal in passrng thenot find arty error committed by the Tribunal in passrng the II order and there [are ][no ][grounds ][to ][interfere ][with ][the]irnpugned same. 18. Accordingly, the [Income ][Tax ][Tribunal ][Appeal ][is] dismissed conhrming [the order, ][dated ][28'02'2008 ][in ] [(SS) ][A]No.65/Hydl2O05 [passed ][by the ][learned Income ][Tax ][Appellate]Tribunal, Bench 'B' [Hyderabad. ][There ][shall be ][no ][order as ][to]COSTS To, Miscellaleous [petitions, ][if ][any, ][pending ][in ][this ][appeal]shall stand closed. dt K. SRINIVASA RAOOINT REGISTRAR //TRUE COPY// ECTION OFFICER IThe lncome Tax Appellate Tribunal, Hyderabad ["B']nch, Hyderabad II order and there [are ][no ][grounds ][to ][interfere ][with ][the]irnpugned same. 18. Accordingly, the [Income ][Tax ][Tribunal ][Appeal ][is] dismissed conhrming [the order, ][dated ][28'02'2008 ][in ] [(SS) ][A]No.65/Hydl2O05 [passed ][by the ][learned Income ][Tax ][Appellate]Tribunal, Bench 'B' [Hyderabad. ][There ][shall be ][no ][order as ][to]COSTS To, Miscellaleous [petitions, ][if ][any, ][pending ][in ][this ][appeal]shall stand closed. dt K. SRINIVASA RAOOINT REGISTRAR //TRUE COPY// ECTION OFFICER IThe lncome Tax Appellate Tribunal, Hyderabad ["B']nch, Hyderabad The Commissioner of lncome Tax [(Appeals)-Vl, ][Hyderabad] 2 The Asst.Commissioner of lncome Tax, Circle-1 ['l ][(1), Hyddrabad] ) One CC to Sri S.Ravi, Advocate [(OPUC)] 4 One CC to Srl P.Murali Krishna, Advocate [(OPUC)] 5 6Two CD Copies Ks/PSL HIGH COURT DATED:21t0BtZ02S JUDGMENTITTA.No.275 of 2008 DISMISSING THE I.T.T.AWITHOUT COSTS. [1][\t][0 E1 '1.',-... [.>:\]t^.....//'--.:("t. [C,]24 sEP zffit),.- I