- (1.) Present appeal against the judgment dated 28.3.2002 passed by Income-tax Appellate Tribunal, Chandigarh Bench 'B', was admitted on the following substantial questions of law: - 1. Whether on the facts and circumstances of the case, the ITAT was right in law in deleting the addition of Rs 39,356/- made by the A.O. on account of non-filing of return for the A.Y. 1995-96 particularly, when there is a specific provision for computation of undisclosed income of the block period in such cases under the provisions of Section 158BB(1) of the I.T. Act, 1961" 2. Whether on the facts and circumstances of the case, the ITAT was right in laws and on facts in deleting the addition of Rs 4 lacs made on account of receipt of alleged NRE gifts holding the same to be not covered in the definition of undisclosed income as defined in Section 158B(b) of the I.T. Act, 1961, particularly when the assessee has not filed the return of his income for the previous year relevant to the assessment year in which the alleged NRE gifts were received?
(2.) Brief facts of the present case, for the purpose of this question of law, inter alia, are that a search was conducted at the residential premises of assessee on 23.11.1995 under Section 132 of the Income Tax Act, 1961 (for brevity 'the Act'); certain incriminating documents were found and seized; cash amounting to Rs 63,625/- was found out of which amount of Rs 30,500/- was seized; notice under Section 158BC of the Act was issued; learned A.O. has added Rs 30,000/- as opening cash in hand on 1.4.1985 as undisclosed income for the assessment year 1986-87 on the ground that assessee was not maintaining personal books of account. However, learned Tribunal on the basis of balance sheet filed by the assessee before the A.O., as on 31.3.1985 till 23.11.1995, has held that balance sheet is a statement of affairs showing assets and liabilities of the assessee as on a particular date; it also incorporates opening balance of various assets and liabilities brought forward from earlier years along with net increase/decrease in each of the assets and liabilities during the year; if the closing balance or cash in hand is disclosed income, opening balance cannot be regarded to be undisclosed income. Learned Tribunal has also observed that addition on the ground that assessee was not maintaining personal books of account is not correct.
(3.) There is no dispute that assessee has submitted the balance sheet before the A.O. and in the balance sheet closing balance or cash in hand was disclosed, therefore, opening balance cannot be regarded to be undisclosed income; entries in the balance sheet have not been disputed by the A.O.;