Law:

Section:

Section 158BB, read with section 36(1)(iii), of the Income-tax Act, 1961 - Block assessment in search cases - Undisclosed income, computation of - A search was conducted at premises of assessee-company, wherein officials of Income-tax Department found a large amount of undisclosed income and considerable discrepancies in books of account of company - In response to notice, assessee filed return claiming deduction in respect of interest on money borrowed for investment in money lending business - Assessing Officer rejected assessee's claim - It was noticed that assessee in fact had not even laid any factual foundation to indicate that there was some investment made in moneylending business for which purpose assessee had borrowed commensurate amount - Whether, it was for assessee to demonstrate that there was in fact a debt for purpose of investment and certain amount of interest was being paid to lender - Held, yes - Whether since assessee failed to do so, impugned order passed by Assessing Officer was to be upheld - Held, yes Section 158BFA of the Income-tax Act, 1961 - Block assessment in search cases - Levy of interest and penalty in certain cases - Whether levy of interest under section 158BFA ceases very moment return is filed and interest being only for delayed period of filing return, does not link it to payment of taxes per se but links it to delay in filing a return - Held, yes Section 140A, read with sections 158BC and 158BFA, of the Income-tax Act, 1961 - Assessment - Self assessment - Whether amendment to section 140A to include section 158BC is only indicative that after introduction of section 158BC within scope of section 140A, liability for payment of interest does stop by merely filing of return but is thereafter attracted in terms of section 140A till payment of tax in terms of section and even now provisions of section 158BFA(1) and section 140A operate independently - Held, yes - Whether, therefore, amendment to section 140A is of no consequence so far as determination of interest under section 158BFA is concerned - Held, yes FACTS A search was conducted at the premises of the assessee-company, wherein the officials of the Income-tax…

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