TMI Blog2002 (8) TMI 259X X X X Extracts X X X X X X X X Extracts X X X X ..... k available with reference to the assessee's business premises. According to Department, it was noticed that there was a deficit stock of Rs. 3,88,246 as compared to the stock available as per books of account. Addition was made on account of gross profit in this case. It is admitted case that the assessee has been maintaining regular books of account but the AO concluded that the assessee had certain stock and not accounted for the same in her books of account. But the purchases are duly accounted for. So, addition of Rs. 36,883 was made as undisclosed income for the asst. yr. 2000-2001 which was confirmed by the CIT(A). 2. Now, the assessee is in appeal before us. Shri G. Lakshminarasimhan, learned counsel for assessee, has taken a plea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osed by way of any thing found and seized during the course of search. It is not clear before us as to what was the basis for applying block assessment to the case of the assessee. The AO has observed in his order as under: "During the course of search, an inventory was taken in respect of the stock available in the assessee's business premises. There was a deficit of closing stock to the extent of Rs. 3,88,246 as compared to the stock available as per books. The only conclusion, which could be drawn, is that the assessee has held certain stock and has not accounted for in her books of account. Since the purchases are duly accounted for, the gross profit on the unaccounted sales has to be brought to tax as undisclosed income at 9.5 per ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allegation of unaccounted sales and income. In our opinion, the assessment order is based more on surmises and conjectures and hypothesis which is against the letter and spirit of block assessments, which are to be done under the provisions of Chapter XIV-B of the Act, since the provisions of block assessment envisage assessments on concrete, tangible and evidence in support of unaccounted income. 4. It is also an admitted fact that the AO did not issue any show-cause notice to the assessee and that is why, in our opinion, the AO misdirected himself to carry out the assessment in question. Where previous year is not ended or due date for filing of return of income for any previous year has not expired, income or the transaction recorded ..... X X X X Extracts X X X X X X X X Extracts X X X X
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