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2008 (3) TMI 669 - HC - Income TaxBlock assessment - Search and seizure u/s 132 - Whether Tribunal was justified in holding that where income does not fall within section 158B the same should not be brought to tax u/s 158BA even though covered u/s 158BB(c) - Report of valuation officer can be taken into consideration for block assessment by AO? - HELD THAT:- In the present case, Tribunal held that the details of the payment of salary and commission etc., was available as per the record of the employer for the purpose of audit under section 44AB of the Act, the tax was deducted at source and the assessee also paid advance tax and even the balance amount was paid as self-assessment tax. Therefore, there could be no intention on the part of the assessee for hiding the said income from the Income-tax Department. Therefore, merely because the return for the AY 1995-96 could not be furnished within the specified period it cannot be said to be undisclosed income. In our opinion, the finding of the Tribunal is finding of fact based on the material on record. In the case of CIT v. N. Vellaiyan[2005 (10) TMI 77 - MADRAS HIGH COURT], following its earlier decision in the case of Asstt. CIT v. A.R. Enterprises [2004 (9) TMI 34 - MADRAS HIGH COURT] held that the income in respect of which the advance tax has been paid cannot be said to be undisclosed income. Report of valuation officer obtained by AO cannot be taken into consideration for block assessment unless it is co-related with some seized material - HELD THAT:- Tribunal held that no material was found to show that any investment has been made towards construction or renovation during the year under consideration and, therefore, in the absence of any material the addition on the basis of the valuer report is not justified. We are of the opinion that the view taken by the Tribunal is correct and in accordance to the law. The addition cannot be made on mere presumption. There must be some material found during the course of search to suggest any investment towards construction or renovation in the property and only on the basis of such material the matter could be referred to the Departmental Valuer. Merely on the basis of the opinion of the Departmental Valuer in the absence of any specific material it cannot be inferred that any expenditure has been incurred towards cost of construction or renovation during the period in dispute. Our view is supported by the in the case of CIT v. Ashok Khetrapal [2007 (7) TMI 36 - HIGH COURT , DELHI] in which it has been held that in the absence of material being found during the course of search that the assessee had made more investment in the properties than his declared value the addition was not justified. In the case of CIT v. Vinod Danchand Ghodawat [2000 (6) TMI 13 - BOMBAY HIGH COURT], held that in the absence of any material being found during the course of search that any amount being spent on the construction of the bungalow no addition could be made on the basis of the report of the Departmental Valuer obtained subsequent to the order of regular assessment. It has been held that Chapter XIV-B of the Act had no application. Therefore, both question Nos. 1 and 2 are answered in favour of the assessee and against the revenue. Appeal is dismissed - In favour of assessee
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