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2017 (12) TMI 920 - AT - Income TaxUndisclosed income on account of the speculation losses in block assessment - imagination of undisclosed income within the meaning of Section 158BB - articles shown to the department prior to the search - Held that:- Nothing is brought on record, whether the A.O. at the assessment stage has allowed cross-examination to such statements on behalf of the assessee-company. Therefore, such statements have otherwise been cannot be read in evidence against the assessee- company. It is also brought on record that ultimately the persons who made the statements after the search have retracted from their statements by filing affidavits and their statements have been recorded thereafter. But A.O. did not discuss anything on this aspect in the assessment order. Therefore, there were nothing on record to disallow the speculation losses suffered by assessee-company in block assessment because it was accepted by the Revenue Department in scrutiny assessments prior to the date of search. The decisions relied upon by Ld. D.R. would not support the case of the Revenue. Considering the totality of the facts and circumstances of the case, it is clear that assessee-company did not earn any undisclosed income on account of the speculation losses in block assessment under Chapter-XIVB of the I.T. Act, 1961. Therefore, the A.O. was not justified in making the additions. As regards addition on account of difference in valuation as reported by the assessee-company and computed by the Valuation Officer, it is clear that no incriminating material or evidence was found during the course of search so as to indicate any unaccounted investment in the property. The reference to the DVO was made after the search which could not be construed as incriminating material or document found during the course of search. Therefore, such addition also could not be made in the block assessment. The addition of ₹ 65,609 is accordingly, deleted.
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