COMMISSIONER OF INCOME TAX-I Vs. M CHINNASAMY

JUDGEMENT

(1.) THE Revenue has filed the present appeals against the order of the Income-tax Appellate Tribunal under Section 260A of the Income-tax Act, 1961, raising the following questions of law:- T.C.(Appeal) No.799/2005:-

(2.) THE brief facts arising out of the appeals are as under:- THE assessee was a former Minister for Industries in the Tamil Nadu Government during the period 1993 to 1996. THE Revenue conducted a raid under Section 132 of the Income Tax Act, 1961 (hereinafter called as the "Act") on 21.11.1996. During the course of raid, some incriminating documents were seized. THErefore,the Assessing Officer issued a notice under Section 158 BC of the Act on 11.03.1997 directing the assessee to furnish return of income in Form -2B for the block period 1987-88 to 1997-98. THE block assessment years are 1987-88 to 1997-98. THE assessee/respondent has filed return of income on 13.11.1997 showing the undisclosed income as Nil. Subsequently, the Assessing Officer completed the block assessment for the block period determining the undisclosed income at Rs.99,94,761/-. Aggrieved by that order, the assessee/respondent filed appeal before the Income Tax Appellate Tribunal. THE Income Tax Appellate Tribunal allowed the appeal in part and set aside the order of assessment directing the Assessing Officer to redo the matter after giving opportunity to the assessee. In consequence of the same, the Assessing Officer sent a notice to the respondent/assessee and completed the revised assessment as per the direction of the Tribunal and completed the assessment under Section 143(3) of the Act read with Section 158 BC of the Act and determined the undisclosed income at Rs.77,93,730/-. While completing the assessment, the Assessing Officer included a sum of Rs.75,00,000/-, which was advanced by the assessee as donation to the building fund of All India Anna Dravida Munnetra Kazhagam (herinafter called as "AIADMK") as undisclosed income. Further the Assessing Officer also made another addition of Rs.2,25,000/- as unaccounted income and the same was assessed to tax as undisclosed income. Aggrieved by the same, the assessee filed appeal before the Income Tax Appellate Tribunal, who deleted the addition and held that the same was not undisclosed income and allowed the appeal. Aggrieved by the order of the Tribunal, the Revenue filed T.C.(Appeal)No.799/2005 against the order dated 14.10.2004. In respect of Tax case appeal viz., T.C(A).No.1202/2005, it is against the earlier order of the Income Tax Appellate Tribunal dated 01.04.1986 raising the above questions of law.

(3.) HEARD the learned counsel on either side and perused the materials available on record. In the course of raid, certain documents were seized. The said seized documents include three slips from the Head Office of AIADMK of receiving the donation for a sum of Rs.75 lakhs from the assessee towards Building Fund. The details of donation are as follows:-