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2013 (10) TMI 373 - HC - Income TaxBlock assessment - Whether material found during the search and pre/post search operations were sufficient to establish the undisclosed income as computed by the Assessing Officer - On 29.09.1987, a survey was conducted under Section 133A of the Income Tax Act in various Banks pertaining to the Accounts and Lockers of the couple - On 26.03.1998, a search and seizure operation was conducted under Section 132 of the Act, at the official residence of the assessee at Butler Palace, Lucknow. The Bank Accounts/Lockers of the couple were also searched. On 31.03.2000, block assessment orders were passed under Section 158BC, against the couple – Held that:- During the search, except a slip containing details of some fixed deposits with the companies worth Rs.74,000/- (rounded up) no other material including cash and jewellery was seized from the premises. These fixed deposits have already been considered in the block assessment of Dr. Lalit Verma himself, other material found was of much less value and not treated as incriminating material. The first appellate authority as well as the Tribunal after examining the entire evidence has observed that the additions had already been deleted relating to her husband Dr. Lalit Verma in whose hands additions were made on substantive basis. Regarding fixed deposits of N.B.F.C., the factual position is that remaining investments stood already disclosed (prior to the search) in the partnership firm, namely, M/s. Three Aces Construction & Consultants where the assessee is one of the partners. The said firm was being assessed to tax since long and the disclosures of all these transactions had duly been made there in the pre-search period. Further, these additions again did not have their origin to any material found during the course of search. Regarding the firm, it is an individual assessee, regularly assessed to tax even in the period prior to the search - The said fixed deposits pertaining to NBFC were already disclosed in the hands of the partnership firm, prior to the search - So, no addition can be made in the block period. For the remaining additions, which were made on the protective basis were already deleted in the hands of the assessee's husband Dr. Lalit Verma, being the substantive additions, are not sustainable in the eye of law for the reason that when the substantive additions were deleted then protective additions have no meaning - No incriminating material was found during the course of search in the hands of the assessee, therefore, no addition can be made – Decided against the Revenue.
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