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2014 (11) TMI 511 - ANDHRA PRADESH HIGH COURTReference u/s 132(4) - Block assessment - Whether the statement said to have been recorded from the managing partner of the respondent would fit into the one referable to Section 132(4) – Held that:- The statement must be recorded during the course of search and seizure - it can be recorded only as a sequel to the discovery of books of account, cash, bullion or similar items - the search has taken place on 25-03-1999, but the statement was recorded on 11-05-1999 - It was not even alleged that the search was carried out for the entire period, in between - A statement recorded one and half months after the search, can by no means be brought under the purview of Section 132(4) - the block assessment is not on the basis of any discovery of wealth, bullion or books of account. Additions on the basis of discrepancy between the two registers (RG-1) - Held that:- While excise duty becomes payable when the manufactured material is removed from the factory, the income tax becomes payable when the product is sold and sale proceeds accrue to the assessee. When it was not even alleged that the steel, representing the differential quantity, was sold, there was no basis to infer or imagine the accrual of income or the corresponding obligation to pay the income tax. It does not need any emphasis that the proceedings under Chapter XIV-B are penal in nature and they can be sustained if only they are founded and grounded on undisputed or established facts. An assessee cannot be subjected to the proceedings under that chapter, just on the basis of imaginations or surmises. – the order of the Tribunal is upheld – Decided against revenue.
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