Law:

Section:

Section 158B of the Income-tax Act, 1961 - Block assessment in search cases - Undisclosed income - Block period from 1-4-1995 to 19-12-2001 - Assessee was a director of a company - During search in premises of assessee and company, it was found that in terms of board's resolution, certain percentage of profit of company had been credited to account of assessee in company's books of account and assessee had not offered said amount to tax in his return for relevant assessment year - Assessee contended that he was following cash system of accounting and since amount of profit was not actually received, same was not offered to tax - Assessing Officer rejected assessee's contention and passed block assessment order treating said amount as his undisclosed income - Assessee filed an appeal against said order but during appellate proceedings, he accepted that it was difficult for him to prove his claim of changing method of accounting from mercantile system to cash system and, therefore, amount of profit be treated as his undisclosed income in block period - Accordingly, appeal filed by him was dismissed by Commissioner (Appeals) - However, thereafter, he challenged order of Commissioner (Appeals) in an appeal before Tribunal - Tribunal dismissed appeal - Whether having agreed before Commissioner (Appeals) that it was difficult for him to prove that he had changed method of accounting from mercantile system to cash system and, therefore, amount of profit could be taxed as undisclosed income in block period, it was open to assessee to challenge decision of Commissioner (Appeals) on merits - Held, no FACTS The assessee was a director of a company. The premises of the assessee as well as of the said company were searched resulting in seizure of the minutes of the board of directors of the company wherein it was decided to share the profits of the company with the assessee. The assessee was a signatory to the said board resolution and in the implementation thereof 66 per cent profit of the company had been credited to the ledger account of the assessee in the books of the company. Since the said amount of profit was not offered to tax in the return of income filed by the…

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