COMMISSIONER OF INCOME TAX Vs. H.E. MYNUDDIN PASHA

JUDGEMENT

(1.) The Revenue has preferred this appeal challenging the order passed by the Tribunal which held that the block assessment order passed by the assessing authority which is confirmed by the Appellate Commissioner is erroneous as the income which is assessed in the block period is not an undisclosed income.

(2.) As the said issue involved in all these appeals is the same and the Tribunal has disposed of all the three appeals by a common order, we are also disposing of the appeals by a common order.

(3.) A search was conducted under section 132 of the Income-tax Act, 1961, on January 18, 2001, in the premises of the assessees. Consequently, notice under section 158BC was issued. On the date of the search, due date of filing the returns for the assessment years 1999-2000 and 2000-01 stood expired. The assessees have not filed their returns. The assessees enjoyed taxable incomes during these periods. The source of the said taxable income was income and remuneration from the partnership firms in which they were partners, in reply to the notice under section 158BC the assessees confirmed that the source of income in the above years are known to the Department and the returns for the assessment of M/s. Mallikarjuna Enterprises for the assessment year 2000-01, was filed on October 30, 2000, returns of M/s. HED Brothers for the assessment years 1999-2000, 2000-01 were filed on September 27, 1999, and January 27, 2000, and the returns of income of M/s. Sugandha Flavours for the assessment years 1999-2000 and 2000-01 were filed on December 31, 1999, and October 30, 2000, respectively. As all these returns were filed before the search in the premises of the assessees and remuneration paid by those firms were clearly disclosed in their returns, they contended that they were not undisclosed income which calls for a block assessment order. It was also contended that those firms had deducted TDS in respect to the interest paid to these assessees.