Section 293Chapter 16

Computation of total income of block period

(1)

The total income of the block period referred to in section 292section 292(1) shall be the aggregate of the following:—

(a) undisclosed income declared in the return furnished under section 294section 294;

(b)

income assessed under section 270section 270(10) or section 271section 271 or 279 of this Act, or section 153A or 153C of the Income-tax Act, 1961, prior to the 20 date of initiation of search or the date of making of requisition in respect of tax years comprising the block period;

(c)

income declared in the return of income furnished under section 263section 263 or in response to a notice under section 268section 268(1) or 280 in respect of tax years comprising the block period, which is not covered under 25 clause (a) or (b);

(d)

income determined––

(i) in respect of a tax year, where such tax year has ended and the due date for furnishing the return for such year has not expired prior to the date of initiation of the search or the date of requisition, on the basis 30 of entries relating to such income or transactions as recorded in the books of account and other documents maintained in the normal course before the date of initiation of search or the date of requisition;

(ii)

in respect of period commencing from 1st April of the tax year in which the search is initiated or requisition is made and ending on the 35 day immediately preceding the date of initiation of search or requisition, on the basis of entries relating to such income or transactions as recorded in the books of account and other documents maintained in the normal course for such period on or before the day immediately preceding the date of initiation of search or the date of requisition;

(iii) in respect of period commencing from the date of initiation of the search or the date of requisition and ending on the date of the execution of the last of the authorisations for search or requisition, on the basis of entries relating to such income or transactions as recorded in the books of account and other documents maintained in the normal course for such period on or before the date of the execution of the last of the authorisations;

(e)

undisclosed income determined by the Assessing Officer under sub-section (2).

(2)

The undisclosed income forming part of the total income referred to in section 292section 292(1) shall be computed on the basis of following:––

(a) evidence found as a result of search or survey or requisition; and

(b) any other material or information as are either available with the Assessing Officer or comes to his notice during the course of proceedings under this Chapter.

(3)

The relating to any international transaction or specified domestic transaction referred to in section 166section 166, shall not be considered for the purposes of determining the total income of the block period, and shall be considered in the assessment made under other provisions of this Act, if––

(a) such income pertains to the period beginning from the 1st April of the tax year in which last of the authorisations was executed and ending with the date of execution of the last of the authorisations; and

(b) such income is required to be determined––

(i) as a result of search or requisition of books of account or other documents; or

(ii) based on any other material or information as are either available with the Assessing Officer or comes to his notice during the course of proceedings under this Chapter; or

(iii) based on entries relating to income or transactions as recorded in books of account and other documents maintained in the normal course on or before the date of the execution of the last of the authorisations.

(4)

For the purposes of determination of undisclosed income,–– (a) of a firm, such income assessed for each of the tax years falling within the block period shall be the income determined before allowing deduction of salary, interest, commission, bonus or remuneration, by whatever name called, to any partner not being a working partner;

(b)

the provisions of sections 102sections 102, 103, 104 and 105 shall, so far as may be, apply and reference to tax year in those sections shall be construed as references to the relevant tax year falling in the block period;

(c)

the provisions of section 166section 166 shall, so far as may be, apply and reference to tax year in that section shall be construed as reference to the relevant tax year falling in the block period excluding the period referred to in sub-section (3).

(5)

The tax referred to in section 292section 292(7) shall be charged on the total income pertaining to the block period determined in the manner specified in sub-section (1) as reduced by the total income referred to in clause (b), (c) and (d) of the said sub-section.

(6)

For the purposes of sub-sections (1) and (5), the following shall be ignored:––

(a) the undisclosed income declared under sub-section (1)(a) is a loss; or

(b) the income disclosed in respect of any tax year comprising the block period is a loss; or

(d) the income as determined under of sub-section (1)(d) is a loss.

(7)

For the purposes of assessment, losses brought forward from the tax year (prior to the first tax year comprising the block period) under Chapter VII or unabsorbed depreciation under section 33section 33(11) shall not be set off against the undisclosed income determined in the block assessment under this Chapter.

(8)

Losses or unabsorbed depreciation as referred to in sub-section (7) may be carried forward for being set off in the tax year subsequent to the tax year in which the block period ends, for the remaining period, taking into account the block period and such tax year, and as per the provisions of this Act.