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2016 (9) TMI 1598 - AT - Income TaxAssessment u/s 153A - search proceedings - evaluation of value of building - AO had referred the valuation of building to the DVO - HELD THAT:- As assessee was searched and during search operation, no incriminating material was found. Subsequent to search, AO initiated the proceedings u/s 153A. During the assessment proceedings, he noticed that the assessee has constructed building along with other persons. To evaluate the value of the building, he referred to the Valuation Officer and the same was adopted to complete the assessment u/s 143(3) r.w.s. 153A . The assessment proceedings are subsequent to the search proceedings. In the search, there was no incriminating material found and the same was not disputed by the AO. Since, there is no incriminating material found, the addition cannot be made other than what was found in the search. AO can substantiate the material found and cannot bring anything in the assessment. As we are aware, block assessment is a special assessment, the material found in the search alone can be assessed or it can be substantiated based on the material found in the search. In case, no material found, the block assessment itself bad in law. No doubt, AO can refer to the DVO to complete the pending assessment. But in the given case, there is no adverse material to substantiate the assessment, therefore, there is no room for the AO to refer something which is not found during the search. Hence, in our view, the addition made was not proper and needs to be annulled. Accordingly, findings of the CIT(A) is upheld and ground raised by the revenue is rejected.
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