COMMISSIONER OF INCOME TAX, CHENNAI versus S. AJIT KUMAR

Citation: [2018] 5 S.C.R. 710 · Decided: 02-05-2018 · Supreme Court of India · Bench: R.K. AGRAWAL · Disposal: Appeal(s) allowed

Judgment (excerpt)

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SUPREME COURT REPORTS
[2018] 5 S.C.R.
COMMISSIONER OF INCOME TAX, CHENNAI
v.
S. AJIT KUMAR
(Civil Appeal No. 10164 of 2010)
MAY 02, 2018
[R. K. AGRAWAL AND ABHAY MANOHAR SAPRE, JJ.]
Income Tax Act, 1961 –  s. 158BB, 158 BH and 133A –
Undisclosed income of the block period – Computation of – Search
conducted in the premises of assessee by the Income Tax Department
– Concurrently survey conducted in the premises of the builder who
constructed the house of the assessee – Cash payment of Rs 95.16
lakhs found in the course of survey in the premises of the builder –
If could be used in Block Assessment of the assessee – Held: It can
be added under the head of the undisclosed income of the assessee
in block assessment – Assessing Officer was justified in taking the
adverse material collected or found during the survey or any other
method while making the Block Assessment – Thus, the orders passed
by the Assessing Officer restored.
Allowing the appeals, the Court
HELD: 1.1 On a perusal of Section 158BB of the Income
Tax Act, 1961, it is evident that for the purpose of calculating the
undisclosed income of the block period, it can be calculated only
on the basis of evidence found as a result of search or requisition
of books of accounts or other documents and such other materials
or information as are available with the Assessing Officer and
relatable to such evidence. Section 158BB has prescribed the
boundary which has to be followed. No departure from this
provision is allowed otherwise it may cause prejudice to the
assessee. It is the cannon of tax law that it should be interpreted
strictly. [Para 13] [717-A-B]
1.2 The power of survey has been provided under Section
133A of the IT Act. Therefore, any material or evidence found/
collected in a Survey which has been simultaneously made at the
   [2018] 5 S.C.R. 710
710
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premises of a connected person can be utilized while making the
Block Assessment in respect of an assessee under Section 158BB
read with Section 158 BH of the IT Act. The same would fall
under the words “and such other materials or information as are
available with the Assessing Officer and relatable to such
evidence” occurring in Section158BB of the Act. In the present
case, the Assessing Officer was justified in taking the adverse
material collected or found during the survey or any other method
while making the Block Assessment. The impugned orders are
set aside and the orders passed by the Assessing Officer making
the Block Assessment are restored. [Paras 15, 17] [718-C-D, F]
Assistant Commissioner of Income Tax and Another v.
Hotel Blue Moon (2010) 3 SCC 259 ; Commissioner of
Income Tax v. G.K. Senniappan 284 ITR 220 ;
Commissioner of Income Tax v. S. Ajit Kumar (2008)
300 ITR 152 (Mad.) ; Commissioner of Income Tax v.
N.K. Laminates Pvt. Ltd. (2014) 365 ITR 211 (All.) ;
Commissioner of Income Tax v. Bimal Auto Agency
(2009) 314 ITR 191 (Gauhati) ; Commissioner of
Income Tax v. Khushlal Chand Nirmal Kumar
(2003) 263 ITR 77 (MP) ; Commissioner of Income
Tax v. Dr. Rattan Kumar Singh (2013) 357 ITR 35
(All.) ; Commissioner of Income Tax, Chennai v. S. V.
Sreenivasan (2017) SCC Online 17211 (Mad.) ;
Commissioner of Income Tax v. Pinaki Misra (2017)
392 ITR 347 (Delhi) ; Commissioner of Income Tax v.
R.M.L. Mehrotra (2010) 320 ITR 403 (All.) ; Sree
Meenakshi Mills Ltd. v. Commissioner of Income Tax,
Madras (1957) 21 ITR 28 (S.C.) ; Commissioner of
Income Tax v. P. V. Kalyanasundaram (2007) 294 ITR
49 (S.C.) ; Commissioner of Income Tax v. Smt. Anita
Chouhan (2008) 296 ITR 691 (M.P.) ; Commissioner
of Income Tax, Punjab v. Indian Wollen Textiles Mills
(1964) 51 ITR 291  – referred to.
Case Law Reference
          (2010) 3 SCC 259
referred to
Para 6
COMMISSIONER OF INCOME TAX, CHENNAI v. S. AJIT
KUMAR
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SUPREME COURT REPORTS
[2018] 5 S.C.R.
284 ITR 220
     referred to
Para 7
(2008) 300 ITR 152 (Mad.)
     referred to
 Para 7
(2014) 365 ITR 211 (All.)
     referred to
 Para 7
(2009) 314 ITR 191 (Gauhati)    referred to
 Para 7
(2003) 263 ITR 77 (MP)
     referred to
 Para 7
(2013) 357 ITR 35 (All.)
     referred to
 Para 7
(2017) 392 ITR 347 (Delhi)
     referred to
 Para 7
(2010) 320 ITR 403 (All.)
     referred to
 Para 7
(1957) 21 ITR 28 (S.C.)(2007)    referred to
 Para 7
294 ITR 49 (S.C.)
     referred to
 Para 7
(2008) 296 ITR 691 (M.P.)
     referred to
 Para 7
(1964) 51 ITR 291
     referred to
 Para 7
CIVIL APPELLATE JURISDICTION: Civil Appeal N

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