Commissioner of Income Tax vs Soora Subramaniam Huf (Individual)

Chitra Venkataraman, J.—The Revenue has come up on appeal as against the order of the income tax Appellate Tribunal, Chennai "A" Bench, dated December 19, 2003, in IT (SS) A No. 13/Mds/96 raising the following substantial questions of law:

Whether, on the facts and in the circumstances of the case, the income tax Appellate Tribunal was right in quashing the block assessment made on the assessee on the ground that the assessment has not been made on the basis of materials found in the search?

Whether, on the facts and in the circumstances of the case, the income tax Appellate Tribunal was right in quashing the order of assessment for the block period on the assessee disregarding the relevant materials like the addition of unexplained jewellery and silver articles and the information relating to undisclosed income discussed in detail in the assessment order?

The tax case appeal is filed against the assessment order in respect of the block period covering the block years 1986-87 to 1995-96. On November 19, 1995, a search was conducted in the residential premises of the assessee u/s 132 of the income tax Act, 1961. In the course of the search, evidently barring certain gold and silver items, no materials were found, which justified the additions that the assessee had undisclosed income. Even in respect of the jewellery seized, the assessee contended that the same belonged to the family. The Assessing Officer pointed out that the assessee had furnished explanation in respect of 415 grams of gold jewellery as against the seizure of 441 grams. In respect of 26 grams, the assessee pointed out that the same related to his daughter, who received as gifts on various occasions. Similarly, in respect of silver articles of 6.8 kgs., the assessee could not explain the acquisition. Ultimately, the assessment was completed treating the undisclosed income at Rs. 11,08,149.

Aggrieved by the assessment, the assessee went before the income tax Appellate Tribunal, wherein it was categorically pointed out that the additions were made mostly on account of inadequate of drawings and sale of shares. The Tribunal pointed out that the only item seized was jewellery belonging to the family members, for which, there was no addition. The Tribunal pointed out that going by the provisions of section 158BB, on the face of the orders, there was no evidence found and there were no materials found showing undisclosed income. In the light of the facts thus available, the Tribunal held that, on the very basis on which the assessment so framed not being available, the entire assessment could not be sustained and accordingly allowed the assessee''s appeal. A perusal of the order of the Tribunal in detail and going by the findings recorded therein, we have no hesitation in confirming the order of the Tribunal. Accordingly, the tax case (appeal) stands dismissed. The substantial questions of law are answered in favour of the assessee and as against the Revenue. No costs.