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ORDER L. Narasimha Reddy, J. - The petitioner is a dealer in machinery relating to bore-well, at Secunderabad and is assessed to income tax. A raid was conducted in the business premises of the petitioner and those of its associate establishments, on 13.12.1995. The procedure under Chapter XIV-B of the Income Tax Act, 1961 (for short the Act), was invoked. The block assessment covering the assessment years 1985-86 till 13.12.1995 was made. The Assessing Authority passed an order on 31.12.1996, imposing certain amount of tax, upon the undisclosed income. The petitioner approached the Settlement Commission at Chennai, the 1st respondent, under Section 245D of the Act. Through its order, dated 11.02.2002, the 1st respondent determined the undisclosed income for the block period at Rs.1,36,52,701/- and imposed tax at 60%, aggregating to Rs.81,91,620/- The petitioner challenges the said order. 2. Sri S. Dwarakanath, learned counsel for the petitioner, submits that the 1st respondent did not take into account, the relevant provisions of Chapter XIV-B of the Act and has disallowed several deductions, which are otherwise permissible in law. He contends that though the accumulated losses and carried forward, depreciations were referable to the block period, sub-section (4) of Section 158BB of the Act, was invoked to disallow them. Learned counsel submits that the said provision gets attracted only when there exist the unabsorbed losses or carried forward depreciation, that have spilled over beyond the block period, and not otherwise. He has placed reliance upon the judgment of the Supreme Court in E.K. Lingamurthy v. Settlement Commissioner (IT & WT)[2009] 314 ITR 305/178 Taxman 116. 3. Sri J.V.Prasad, learned counsel for the respondents, on the other hand, submits that the scope of determination under Section 245D of the Act is limited and it cannot be said to be the adjudication by the Authority under the Act. He contends that though the 1st respondent was entitled to reject the claim, if the disclosures made by the petitioner were not to its satisfaction, the application was entertained and a detailed reasoned order was passed. He submits that the order passed by…

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