Commissioner of Income Tax vs Maha Singh Rana

The revenue is aggrieved by an order dated 2-11-2004 passed by the Income Tax Appellate Tribunal, Delhi Bench ''G'', New Delhi (''Tribunal'') in IT(SS) Appeal Nos. 22/Delhi of 2001, 23/Delhi of 2001 and 24/Delhi of 2001 all relevant to the block period 1-4-1988 to 12-5-1998. 2. A search u/s 132 of the Income Tax Act, 1961 (''Act'') was conducted in respect of the bank account of the assesses on 5-6-1998. 3. It appears that the assessee had sold some agricultural land and the sale transaction was completed on 15-4-1998 prior to search. The assessee appears to have received some amount by cheque and some amount in cash in respect of the sale of the land. The amount received in cash was deposited in the bank account of the assessee. 4. According to the assessing officer, the cash amount was the undisclosed income of the assessee and therefore, he sought to include and assess the amount in the block assessment period, 5. The Commissioner (Appeals) as well as the Income Tax Appellate Tribunal took the view that the time for filing the regular return had not expired and that the assessee had also filed the regular return by disclosing the entire sale proceeds. It was accordingly held that in view of the provisions of Sections 158BA(3) and 158B(b) of the Act, these receipts on account of sale proceeds could not be treated as undisclosed income in the hands of the assessee. 6. We also find from the perusal of Section 158B(b) and Section 158BA(3) of the Act that such 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. Clearly in the present case even before the search took place the cash income was disclosed in the ''other documents'', that is, in the bank account of the assessee. Section 158BA(3) provides that where any part of income referred to in Sub-section (1) relates to an assessment year for which the previous year has not ended or the date of filing the return of income 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 the search or requisition in the books of account or other documents maintained in the normal course, the said income shall not be included in the block period. As noted above, the cash income of the assessee was recorded in the bank account of the assessee before the date of search. We are of the opinion that neither the Commissioner (Appeals) nor the Income Tax Appellate Tribunal erred in coming to the conclusion that the revenue should have assessed the income of the assessee u/s 143(3) of the Act and not under Chapter XIV-B of the Act. 7. No substantial question of law arises. 8. Dismissed.