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2014 (4) TMI 565 - HC - Income TaxBlock assessment - Addition made on the basis of loose papers Under invoiced sales of Kattha Search and seizure - Whether the Tribunal was correct in not upholding the order of the AO wherein the addition on account of under invoiced sales of Kattha was made on the basis of material in the shape of loose papers Held that:- Revenue is not able to show any document relating to any sale for the financial year 1993-94 which was found during the course of search relatable to addition towards undisclosed income on account of under invoicing - The finding of the Tribunal is finding of fact thus, no question of law arises for consideration. Unexplained investment in plant & machinery and Factory building No related documents found Held that:- The Tribunal has recorded a categorical finding that no documents relating to the investment in the plant & machinery and factory building were found during the course of search - The valuation report has been obtained after the search which could not be made basis for the determination of undisclosed income for the purposes of the assessment u/s 158BC of the Act - no evidence was found relating to investment in the plant & machinery and in the factory building at the time of search - It is only after the search when the matter has been referred to the Valuation Cell for the value of plant & machinery and factory building - there was more investment which has not been disclosed and was unexplained. The Valuation report has been obtained after the search thus, it does not fall within the purview of evidence found as a result of search and cannot be basis for the determination of undisclosed income u/s 158BB of the Act Relying upon Commissioner of Income Tax v. G.K. Senniappan [2006 (1) TMI 87 - MADRAS High Court] - the undisclosed income of the block period should be the aggregate of the total income of the previous year falling within the block period computed in accordance with the provisions of the Act, on the basis of the evidence found as a result of search or requisition of books of account or other documents and such other materials or information as are available with the Assessing Officer and relatable to such evidence, as reduced by the aggregate of the total income, or as the case may be, as increased by the aggregate of the losses of such previous years thus, the order of the Tribunal is upheld Decided against Revenue.
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