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2010 (10) TMI 296 - ITAT, AHMEDABADSearch and seizure - Addition – Block assessment - Unaccounted investment - In the block assessment the addition can be made only on the basis of evidences found and recovered during the course of search and in the set aside proceedings the learned CIT(A) is bound to follow the direction of the Tribunal in which also it was directed to examine the case of the assessee on the basis of material seized, material available on record and the books of account - Therefore, addition was not made merely on the basis of the sole statement of the assessee The appellant reiterated that the Assessing Officer could not prove by evidence that actual amounts spent under this head was more, therefore, addition is made against the provisions of section 14(b) of the Act - During the search also the valuation report dated 28-11-1996 was seized which shows reasonable rate as explained by the assessee which has been ignored by the AO without any just cause - It would, therefore, prove that there was no incriminating material or evidence found during the course of search to indicate that the assessee made undisclosed investment or paid any on money to any person The learned CIT(A) considering the statement of the assessee admitted investment and surrender of the above amounts in the statement and that no fresh evidence is filed before him confirmed both the additions - In the absence of any specific findings as per the direction of the Tribunal dated 31-05-2005 and as per law for the block assessment noted above, before making the addition on the above issue the AO and the learned CIT(A) should have specified as to what material was found during the course of search to make the above additions - In the result, the departmental appeal is partly allowed; whereas the appeal of the assessee is allowed for statistical purposes. Regarding levy of surcharge - this issue is now covered by the judgment of the Hon’ble Supreme Court in the case of Suresh N. Gupta (2008 -TMI - 40397 - SUPREME Court) in which it was held that proviso to section 113 of the IT Act is clarificatory even to the search prior to insertion of the provisions
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