Law:

Section:

Section 158B of the Income-tax Act, 1961 - Block assessment in search cases - Undisclosed income - Block period 1986-87 to 1996-97 - Regular cash book seized during a search and seizure operation revealed cash credits in names of various parties - Assessee did not file return till date of search and even after search did not disclose such amount and showed income as nil - Assessee also failed to prove genuineness of cash credits - Whether cash credits in question had to be treated as undisclosed income - Held, yes FACTS During the course of a search and seizure operation carried out under section 132 at the residential and business premises of the director of the assessee-company, some incriminating documents/papers were found and the same were seized. However, no returns were filed prior to that. In response to the notice issued for the assessment of the income of the block year, the assessee filed return showing its income asnil. During the course of assessment, the Assessing Officer found that there were deposits of Rs. 41,400 in the names of various parties. The Assessing Officer assessed that income as undisclosed income for the assessment year 1993-94 on the ground that genuineness of cash credits was not proved. However, the Tribunal deleted the addition on the ground that the entries were shown in the regular cash book and, therefore, it could not be said that the income was undisclosed income. On appeal under section 260A : HELD The assessee had not filed the return till the date of search and even after the search, the assessee had shown the income as nil for the assessment year 1993-94. When the assessee was asked to prove the genuineness of the cash credits, it had failed to discharge its burden. When the assessee had filed the return in response to the notice after search, the income which had not been taxed or shown could be assessed as undisclosed income of the assessee. Admittedly, Rs. 41,400 had never been offered for tax and it was never shown as income of the assessee. The entries of these deposits were found in the regular cash book maintained by the assessee. When the entries were found in the books of the assessee, the assessee could not…

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