S. 132: It is but natural that concealed income found at the time of search and survey has to be distributed among all the family members who were carrying on business. It is also a reasonable conclusion that the income had been earned over a period of time and should be spread over various years

(i) Less than 50% of the face value of the promotes should only be treated as the amounts advanced and consequently the undisclosed income of the assessee;

(ii) The concealed income has to be treated as belonging to various members of the assessee’s family and dividing the same between them instead of taxing the entire amount in the assessee’s hands;

(iii) The undisclosed income has to be spread over a period of five years.

On appeal by the department to the Supreme Court HELD dismissing the appeal:

The Department has failed to bring on record any material to the contrary except the seized documents which, in our considered opinion, could not absolve the Department or give any right to negate the view taken by the first Appellate Authority and the Tribunal. So far as the income divided among the family members of the assessee is concerned, we find that all of them were carrying on same business from the same premises. Therefore, it is but natural that if any concealed income has been found at the time of search and survey, it has to be distributed among all the family members who were carrying on business.