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2008 (7) TMI 472 - AT - Income TaxReopening of assessment of annulment of Block assessment - Notice issued u/s 158BC, after the search - Purchase of property and source of fund - Whether the CIT (A) is justified in directing the AO u/s 150 of Income-tax Act to reopen the assessment for the assessment year 1999-2000 after the block assessment was annulled? HELD THAT:- We find that it is undisputed fact that block assessment order is passed by the AO thereby undisclosed income has been computed on the basis of the statement recorded during the search which was retracted by the persons. No evidence or material was found in the search which substantiates the undisclosed income computed by the AO. Even during the proceedings u/s 27D, the department had investigated the matter as regards advance taken by the assessee from 63 persons as source of fund to purchase the properties in question. From all these facts, it is clear that all necessary details and information were already with the department with respect to the purchase of the property and source of funds claimed by the assessee. In the case of Dang & Co. (P.) Ltd.[2005 (1) TMI 328 - ITAT DELHI-A], Tribunal held that the assessee having duly disclosed the amount of credit in the accounts in regular return, AO could not go into its genuineness and treat it as undisclosed income in the block assessment. An amount of cash loan taken by the assessee-company from its director which was disclosed in the regular return and shown in the balance sheet could not be treated as undisclosed income in the block assessment under Chapter XIV-B. Therefore, we are of the view that when all the necessary and relevant information and details regarding the purchase of property and source of fund claimed by the assessee was already with the department before the date of search, then the action of the AO in computing the undisclosed income and treating the credits as bogus is not warranted and the same is not permitted under law for framing the block assessment. Therefore, we find no force or merit in the appeal of the revenue and the block assessment was rightly annulled because the AO was having no material or evidence to pass the block assessment order. Accordingly, the appeal of the revenue is dismissed. In the result, appeal by the assessee is allowed and the appeal by the department is dismissed.
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