ORDER
K.P.T. Thangai, J.M.
1. This appeal by the assessee is for the block period from 1st April, 1985 to 25th March, 1996. The assessee has taken as many as five grounds. The main ground of objection by the assessee is against the order of the AO in making the addition of Rs. 2,00,000 being undisclosed income of the assessee. The case of the assessee is that this amount cannot be treated under Chapter XIV-B of the IT Act, 1961.
2. There was search and seizure operation under s. 132 at the residential premises of the assessee on 25th March, 1996. There was also survey action under s. 133A at the factory/godown premises of M/s. Prakash Industrial Corporation which is the proprietary concern of the assessee. A notice under s. 158BC was issued on 5th August, 1996 requiring the assessee to file the return for the block period. Since there was no return, another notice was issued on 13th February, 1997 fixing the hearing on 28th February, 1997. The assessee filed the return on 3rd April, 1997 showing nil undisclosed income for the block period.
3. During the survey conducted at the business premises of the assessee M/s. Prakash Industrial Corporation, the total stock found was Rs. 4,81,121. As per the reconciliation furnished by the assessee, the excess stock worked out to Rs. 1,46,620 and shortage of stock worked out to Rs. 36,608. The assessee submitted in reply that the stock reconciliation can be made but as it offered in statement, the assessee shall cover Rs. 1,83,328 for the block period. The assessee during the search made an offer of Rs. 2,00,000 for taxation out of this, he offered Rs. 1,83,228 on account of stock difference and the balance to cover up any leakage. The AO made the impugned addition under Chapter XIV-B also. Aggrieved by the above addition, the assessee is in appeal before the Tribunal.
4. The learned counsel for the assessee submitted that the excess stock was found in the business premises and there were only survey action under s. 133A and there was no search, anything found or detected as a result of action under s. 133A is outside the scope of the assessment under Chapter XIV-B which deals with assessment of “undisclosed income as a result of search”. Sec. 158BA reads as under :
“158BA (1) Notwithstanding anything contained in any other provisions of this Act, where after the 30th June, 1995, a search is initiated under s. 132 or books of account other documents or any assets are requisitioned under s. 132A in the case of any person, than, the AO shall proceed to assess the undisclosed income in accordance with the provisions of this Chapter.”
5. It specifically states that the search initiated under s. 132 or the books of account, other documents or any assets are requisitioned under s. 132A in the case of any person, then the AO can assess under this Chapter. Therefore, the counsel for the assessee submitted that s. 133A’s action is out of the scope of this and this can be assessed only under the regular assessment. The counsel for the assessee submitted that on the very next day of the search, the difference was taken as opening stock and on that basis, the difference was reflected in the books and the same was assessed also under regular assessment. The counsel further submitted that in any case, the difference cannot be assessed under the Chapter XIV-B as the section is exclusively applicable only for the action initiated under ss. 132 and 132A. Action under s. 133A is excluded from the purview of Chapter XIV-B. Relying upon the decision of the Mumbai Tribunal, in the case of Sunder Agencies vs. Dy. CIT (1997) 59 TTJ (Mumbai) 610 : (1997) 63 ITD 245 (Mumbai) the counsel for the assessee submitted that the Revenue cannot have a roving enquiries connected with completed assessment and the same cannot be again taxed under Chapter XIV-B of the Act.
6. The learned Departmental Representative submitted that survey and search took place on the same date; one relates to the other and, therefore, it cannot be treated separately. Search carried out means anything connected with also. The learned Departmental Representative further submitted that survey may had taken place under s. 133A on the very date of search because of administrative difficulties.
7. Replying to the above, the counsel for the assessee reiterated the submissions made earlier and submitted that the administrative difficulties cannot be a reason for making the addition under Chapter XIV-B where something is detected as a result of survey under s. 133A.
8. I have heard the rival submissions and gone through the order of the AO. Reading of s. 158BA(1) makes it specifically clear that action under ss. 132 and 132A alone is to be considered for making the assessment of undisclosed income detected or found as a result of survey. Action under s. 133A is excluded from the purview of the s. 158BA. The case in Sunder Agencies (supra) makes it clear that anything that is, already assessed under the regular assessment cannot again be treated under Chapter XIV-B. In view of the above, I am of the opinion that this amount cannot be treated as the assessee’s undisclosed income as it is covered by regular assessment. Coming to the decision relied upon by the learned Departmental Representative in the case of Rameshchandra & Co. vs. CIT (1987) 168 ITR 375 (Bom) for the proposition that if the assessee had surrendered some amount, he can have no grievance if the taxing authorities tax him in accordance with the statement. The principles laid down by the Hon’ble High Court, in the instant case cannot be made applicable. The said decision is distinguishable on the following facts :
(a) The amount in question was offered by the assessee for taxing in the course of assessment proceedings.
(b) The assessee did not challenge the addition of the said amount in the grounds of appeal.
(c) At the time of hearing no one appeared on behalf of the taxing authorities and the assessee before the AAC taking advantage of the fact that no one on behalf of the taxing authority was present to represent it raised an additional grounds. Even that additional ground did not say that there was any mistaken belief of fact. All that it said was addition is improper and illegal.
9. In view of the above, I am of the view that there is no justification in treating the amount as undisclosed income of the assessee. The impugned addition is deleted. The appeal is allowed.