Income Tax Act, 1961 – s. 158BB, 158 BH and 133A – Undisclosed income of the block period – Computation of – Search conducted in the premises of assessee by the Income Tax Department – Concurrently survey conducted in the premises of the builder who constructed the house of the assessee – Cash payment of Rs 95.16 lakhs found in the course of survey in the premises of the builder – If could be used in Block Assessment of the assessee – Held: It can be added under the head of the undisclosed income of the assessee in block assessment – Assessing Officer was justified in taking the adverse material collected or found during the survey or any other method while making the Block Assessment – Thus, the orders passed by the Assessing Officer restored.
Allowing the appeals, the Court
HELD: 1.1 On a perusal of Section 158BB of the Income Tax Act, 1961, it is evident that for the purpose of calculating the undisclosed income of the block period, it can be calculated only on the basis of evidence found as a result of search or requisition of books of accounts or other documents and such other materials or information as are available with the Assessing Officer and relatable to such evidence. Section 158BB has prescribed the boundary which has to be followed. No departure from this provision is allowed otherwise it may cause prejudice to the assessee. It is the cannon of tax law that it should be interpreted strictly. [Para 13] [717-A-B]
1.2 The power of survey has been provided under Section 133A of the IT Act. Therefore, any material or evidence found/collected in a Survey which has been simultaneously made at the premises of a connected person can be utilized while making the Block Assessment in respect of an assessee under Section 158BB read with Section 158 BH of the IT Act. The same would fall under the words “and such other materials or information as are available with the Assessing Officer and relatable to such evidence” occurring in Section158BB of the Act. In the present case, the Assessing Officer was justified in taking the adverse material collected or found during the survey or any other method while making the Block Assessment. The impugned orders are set aside and the orders passed by the Assessing Officer making the Block Assessment are restored. [Paras 15, 17] [718-C-D, F]
Assistant Commissioner of Income Tax and Another v. Hotel Blue Moon (2010) 3 SCC 259 ; Commissioner of Income Tax v. G.K. Senniappan 284 ITR 220 ; Commissioner of Income Tax v. S. Ajit Kumar (2008)
300 ITR 152 (Mad.) ; Commissioner of Income Tax v. N.K. Laminates Pvt. Ltd. (2014) 365 ITR 211 (All.) ; Commissioner of Income Tax v. Bimal Auto Agency (2009) 314 ITR 191 (Gauhati) ; Commissioner of Income Tax v. Khushlal Chand Nirmal Kumar
(2003) 263 ITR 77 (MP) ; Commissioner of Income Tax v. Dr. Rattan Kumar Singh (2013) 357 ITR 35 (All.) ; Commissioner of Income Tax, Chennai v. S. V. Sreenivasan (2017) SCC Online 17211 (Mad.) ; Commissioner of Income Tax v. Pinaki Misra (2017)
392 ITR 347 (Delhi) ; Commissioner of Income Tax v. R.M.L. Mehrotra (2010) 320 ITR 403 (All.) ; Sree Meenakshi Mills Ltd. v. Commissioner of Income Tax, Madras (1957) 21 ITR 28 (S.C.) ; Commissioner of Income Tax v. P. V. Kalyanasundaram (2007) 294 ITR
49 (S.C.) ; Commissioner of Income Tax v. Smt. Anita Chouhan (2008) 296 ITR 691 (M.P.) ; Commissioner of Income Tax, Punjab v. Indian Wollen Textiles Mills (1964) 51 ITR 291 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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