COMMISSIONER OF INCOME-TAX Vs. B.K. AGARWAL

JUDGEMENT

(1.) THE present appeal under Section 260A of the Income -tax Act, 1961 (hereinafter referred to as the 'Act') is directed against the order of the Tribunal dated 31 -5 -2001 relating to block assessment for the period 1 -4 -1985 to 31 -3 -1995 and 1 -4 -1995 to 8 -8 -1995. The appeal has been admitted on the following two questions of law: 1. Whether on the facts and circumstances of the case Hon'ble Tribunal was justified in holding that where income does not fall within Section 158B the same should not be brought to tax under Section 158BA even though covered under Section 158BB(c).

(2.) WHETHER on the facts and circumstances of the case Hon'ble Tribunal was justified in holding that report of valuation officer obtained by Assessing Officer cannot be taken into consideration for block assessment unless it is co -related with some seized material. 2. In brief, the facts of the case are that a search and seizure under Section 132 was carried out in the group consisting of (i) Disinfecto Chemical Industries (P.) Ltd. (ii) Disinfecto Chemical Industries, Prop. Smt. Padmawati Agrawal, wife of Shri B.K. Agrawal, (Hi) Shri B.K. Agrawal and (iv) Shri Karunesh Agrawal, S/o Shri B.K. Agrawal and Smt. Radhika Singhal, wife of Shri Karunesh Agrawal. Shri B.K. Agrawal is working as Chemist and also looking after the business affairs of M/s. Disinfecto Chemical Industries, Prop. Smt. Padmawati Agrawal, wife of Shri B.K. Agrawal. Shri Karunesh Agrawal is also getting salary, interest and commission from M/s. Disinfecto Chemical Industries. Smt. Radhika Singhal is enjoying income from house property and other sources. Shri B.K Agrawal besides enjoying salary was also in receipt of commission, interest and rent from M/s. Disinfecto Chemical Industries. During the course of search, assets were found as detailed in assessment order in para 3 and besides the same, the assessee was found to be owner of house -property situated at 43, Cantt. Road. While considering the income, the Assessing Officer observed that remuneration for services rendered by an employee in terms of the contract of employment on percentage of turnover achieved, it partakes the character of salary in view of the provisions contained in Rule 2(h) of Part A of 4th Schedule to the Act. Therefore, the payment of commission was assessed as salary as has been done by the assessee himself for the earlier assessment years 1993 -94 and 1994 -95. The assessee did not file return of income for the assessment year 1995 -96 within due date on account of search and seizure operations as the books of account and other details were in the possession of the revenue but the Assessing Officer determined the entire income for the assessment year 1995 -96 under the heads 'Salary' and 'Commission', the income from house property, capital gains and the income from other sources as undisclosed income of the assessee.

(3.) IN first appeal, both the aforesaid additions have been upheld. Being aggrieved by the order the appellant filed appeal before the Tribunal.