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2012 DIGILAW 273 (KER)

Commissioner Of Income Tax v. C. S. Ajayakumar

2012-03-05

BABU MATHEW P.JOSEPH, C.N.RAMACHANDRAN NAIR

body2012
Judgment :- Ramachandran Nair, J. 1. Heard learned Senior Standing Counsel for the Revenue and Shri.Anil D.Nair, learned counsel for the respondent assessee. 2. The question raised is whether the Tribunal was justified in cancelling assessment of undisclosed income for the broken period for which, time for filing return was not over as on date of search. Learned Senior Standing Counsel for the Revenue has relied on the decision of the Division Bench of this Court in CIT v. Binoy Mathai, reported in 311 ITR 226. However, we find that the facts in this case are different in as much as the assessee has paid at least one installment of advance tax of Rs.5.80 lakhs in respect of the income of the previous year in which search took place, even before date of search. The further finding is that the assessee remitted total advance tax of Rs.16.90 lakhs for the income assessed, namely Rs.36 lakhs, as undisclosed income of the assessee. Section 158BB(1)(d) provides for exclusion of only income for the block period up to date of search, if the assessee has recorded in the books of accounts details of such income. In this case, even though accounts are irregular, assessee remitted advance tax on estimated income from business, which is the very same income assessed as undisclosed income for the block period up to the date of search. In our view, payment of advance tax on estimated income from business itself is admission of income, though estimation of income in regular assessment made by the Assessing Officer may not be in tune with the estimation of income made by the assessee. Since advance tax is paid in respect of an item of income, it cannot be said that the assessee intended to suppress it's income merely because accounts are not written up. So much so, payment of advance tax on estimated income is sufficient to exclude such income from the scope of undisclosed income for the broken period of the previous year for which, time for filing of return was not over as on the date of search. We, therefore, do not find any merit in the Department Appeal. It is accordingly dismissed.