COMMISSIONER OF INCOME TAX KARNATAKA (CENTRAL) CENTRAL REVENUE BUILDINGS QUEENS ROAD BANGALORE-560001 Vs. LATE SRI H.R. BASAVARAJ BY LEGAL REPRESENTATIVE M/S. H.R.B. FAMILY TRUST 26/2-A, SANKEY ROAD BANGALORE

JUDGEMENT

(1.) THIS appeal is by the revenue being aggrieved by the order of the Tribunal wherein the appeals filed by the assessee were partly allowed and the appeals filed by the revenue were dismissed. Late Sri H.R. Basavaraj was an assessee. Search and seizure were conducted under the provisions of Section 132 of the Income Tax Act at his residential premises and that of his associates. In the course of the search, receipts, agreements and other documents were found. His statement was recorded as well as of other concerned persons. During the course of the search by his letter dated 4 -3 -1998 he offered a total undisclosed income of Rs. 1.26 Crores. Thereafter a notice under Section 158BC was issued to him. He filed the return of income for the block period on 28.09.1998 disclosing therein an undisclosed income of a sum of Rs. 34,51,960/ -. During the pendency of the assessment proceedings he died on 6 -9 -1999. Accordingly, the assessing officer by his letter dated 12 -11 -1999 proposed to treat his wife, sons and grand -sons as his legal representatives. However, vide letter dated 17 -11 -1999 these persons informed the assessing authority that on the demise of Sri H.R. Basavaraj, the entire estate passed on to H.R.B. Family Trust in terms of his last Will and testament. Accordingly, the assessing authority proceeded to complete the assessment represented by the legal representatives namely, the HRB Family Trust.

(2.) THE assessing authority after affording adequate opportunities of hearing on various dates passed an assessment order on 30 -12 -1999 determining the total undisclosed income in a sum of Rs. 2,66,67,510/ - which included the admitted undisclosed income of a sum of Rs. 34,51,960/ -. Aggrieved by the same, the assessee preferred an appeal before the Commissioner assailing the additions made in the course of block assessment including the admitted undisclosed income. By the order dated 10 -5 -2002 the Commissioner confirmed some of the additions made by the assessing authority and so far as remaining additions are concerned rejected the same. Aggrieved by the same, three appeals each were filed by the assessee and the Revenue arising out of the block assessments and one appeal each by the assessee and Revenue were filed arising out of the regular assessment under Section 143(3). The Tribunal partly allowed the appeals of the assessee whereby some of the additions made by the assessing authority and confirmed by the appellate authority were deleted. Hence, the present appeal by the Revenue assailing the deletions made by the Tribunal and on other grounds.

(3.) SRI Indrakumar, the learned senior counsel appearing on behalf of the appellant's counsel contends that the order passed by the Tribunal is erroneous and liable to be set aside. He contends that the Tribunal committed a grave error in holding that even though the assessee has admitted to the undisclosed income, the assessee is entitled to retract his admission. The Tribunal fell in error in accepting the assessee's contention by overriding the admissions made by the assessee. That various incriminating documents have been unearthed during the search operations and as a result of which various undisclosed income have come to light. The Tribunal fell in error in holding that no incriminating material was unearthed at the time of search and consequently granted relief to the assessee. The Tribunal has failed to consider the materials obtained during the search. He accordingly pleads that the appeal be allowed and the questions of law be answered in favour of the revenue.