CIT Vs T. Rangroopchand Chordia (Madras High Court)
The Revenue filed an appeal under Section 260A of the Income-tax Act, 1961 challenging the Income Tax Appellate Tribunal’s order that had deleted additions made towards undisclosed income. The appeal was admitted on two substantial questions of law concerning whether additions could be sustained on the basis of loose sheets recovered during a search and whether the Tribunal was justified in deleting the additions despite the assessee’s sworn statement admitting that the loose sheets related to undisclosed income and the subsequent retraction occurring about a year later.
The respondent-assessee was an individual carrying on hire purchase finance business for automobiles and also had interests in various firms, companies and concerns. A search and seizure operation under Section 132 was conducted at the assessee’s premises on 7 June 2000 and concluded on 8 September 2000. During the search, certain materials were seized, and the authorities concluded that the assessee had undisclosed income and corresponding investments. A notice under Section 158BC was issued on 6 February 2001 requiring the assessee to file a return for the block period. The assessee filed the return only on 27 September 2002, approximately one year and seven months later, declaring undisclosed income of Rs.5,00,000 for the block period.
