"Surcharge in block will be leviable even before the insertion of provisio" SC

January, 21st 2008

Supreme Court of India

Commissioner of Income Central vs Suresh N. Gupta

Civil Appeal No. 32 of 2008, Arising out of S.L.P. (C) No. 4617 of 2007

S.H. Kapadia and B. Sudershan Reddy, JJ

7 January 2008

JUDGMENT

S.H. Kapadia, J

1. Leave granted.

2. Whether the AO had erred in imposing surcharge at 17% on the tax amount of Rs. 97,456/- under Section 113 of the Income-tax Act, 1961 (“1961 Act”) for the “block period” comprising of previous years relevant to 10 assessment years, i.e., 1991-92 to 2000-01, including the period from 1.4.2000 to 17.1.2001.

Facts

3. On 17.1.2001 a search under Section 132 of the 1961 Act was carried out at the premises of the respondent-assessee , an individual. The search unearthed an unexplained investment of Rs. 65,000/- being the value of household valuables and Rs. 97,427/- on account of unexplained marriage expenses (undisclosed income). Accordingly, in the block assessment, the A.O. determined the assessee’s undisclosed income at Rs. 1,62,427/-. He computed tax thereon at 60% in terms of Section 113 of the 1961 Act amounting to Rs. 97,456/- on which surcharge was levied at 17%, i.e., Rs. 16,504/-. The levy of surcharge was challenged by the assessee in appeal before the CIT(A). The said appeal was allowed. The decision of CIT(A) has been confirmed by the Tribunal and the High Court. Hence, this civil appeal.