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2006 (2) TMI 231 - AT - Income TaxBlock Assessment - Undisclosed income - estimation of income - search and seizure operation - challenged the deletion of surcharge u/s 113 - HELD THAT:- We are of the view that the AO while making the estimates for two years i.e., AY 1999-2000 and AY 2000-01 relied upon the seized Annexs. A-106 and A-72. But the AO has not given any basis for calculation of commission income @ Rs. 20,000 per annum for these two years. The learned CIT(A) has deleted (sic-retained) the said addition of Rs. 40,000 for AY 1999-2000 and 2000-01 and there is no dispute before us, as regards sustenance of this addition by the learned CIT(A). As regards, estimation of Rs. 1,20,000 pertaining to AY 1992-93 to AY 1998-99, we are convinced with the arguments of counsel for the assessee and the cases relied upon by him in that the AO does not have any material or evidence with him to make the assessment of undisclosed income and the undisclosed income cannot be computed on estimate basis on presumptions and surmises and assessment under Chapter XIV-B is different from the normal assessment, Therefore, the AO in the present case has framed the assessment while computing the undisclosed income for AY 1992-93 to 1998-99 without any material in possession and purely on conjectures and surmises. Hence the learned CIT(A) has rightly deleted the addition of Rs. 1,20,000. Thus, ground No. 1 of the Revenue is dismissed. Deletion of surcharge u/s 113 - The counsel for the assessee has argued that the search in the present case was carried on 7th April, 2000, i.e., prior to 1st June, 2002. Finance Act, 2002 had brought an amendment in s. 113 and surcharge was levied on block assessment from prospective effect and not from retrospective effect which further clarifies the intention of law-makers that surcharge has been levied w.e.f. 1st June, 2002 and prior to this there was no surcharge. We are convinced with the arguments of counsel for the assessee and the decisions cited by him and are of the view that the search in the present case was carried on 7th April, 2000 and amendment in s. 113 came into effect from 1st June, 2002 which is from the prospective effect. Thus, we are of the view that the amendment in s. 113 for levy of surcharge on block assessment has to be with prospective affect and, therefore, the learned CIT(A) has rightly deleted the surcharge u/s 113 levied by the AD in the present case. In the result the appeal of the Revenue is dismissed.
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