COMMISSIONER OF INCOME-TAX Vs. G.K. SENNIAPPAN

JUDGEMENT

(1.) THE assessee is engaged in the business of chit fund and real estates. A search under Section 132(1) of the Income -tax Act, 1961 (in short 'the Act'), was conducted in respect of one A.P. Shanmugaraj and others on July 1, 1998. The documents seized during the course of such search indicated that the assessee had utilised undisclosed income for making contributions to certain unregistered chits conducted by the said A.P. Shanmugaraj. On July 14, 1998 a survey was conducted in the business premises of the assessee which indicated certain real estate transactions carried on by the assessee and profits derived thereon have not been reported to the Department. The Assessing Officer after receiving the returns filed by the assessee, included under Section 158BB of the Act the undisclosed income found out during the search (?) made under Section 133A of the Act, That order was carried on appeal and the Commissioner of Income -tax (Appeals) has excluded that portion of the income, which has been included based on the material found during the survey on the premise that in respect of block assessment under Section 158BB the materials or evidence which has been gathered during the survey (?) could be taken into consideration and not the material collected during the survey under Section 133A, which order was confirmed by the Tribunal. Hence, the appeal at the instance of the Revenue. The Revenue by filing the appeal before this Court contended that the material gathered in the course of Section 133A survey can also be regarded as a material for the purpose of block assessment under Section 158BB.

(2.) COUNSEL for the Revenue submitted that the language contained in section that 'such other materials or information as are available with the Assessing Officer' would encompass with it the materials gathered during the survey proceedings made under Section 133A of the Act also and as such the deletion of the income determined on the basis of the materials gathered under Section 133A of the Act can also partake of the character of evidence for the purpose of Section 158BB of the Act.

(3.) A mere reading of the above provision clearly indicates that the sentence 'such other materials or information as are available with the Assessing Officer' cannot be bisected or taken in isolation for the purpose of computation. Such other materials or information as are available with the Assessing Officer, should as per the section relatable to such evidence. The word 'such' used as a prefix to the word 'evidence' assumes much significance, in this provision, as it indicates only the evidence found, as a result of search or requisition of books of account or other documents, at the time of search. Any other material cannot form basis for computation of undisclosed income of the block period. Hence, we are of the view that the Commissioner as well as the Tribunal have the issue in accordance with the statutory provisions, and requires no interference. The appeal is accordingly dismissed.