9911796707
TMI Blog2010 (10) TMI 808X X X X Extracts X X X X X X X X Extracts X X X X ..... 28-8-1997. The assessee is a partnership firm that was engaged in the manufacture and sale of wooden decorative doors, frames etc. In the course of search conducted on 28-8-1997, the department noticed that assessee was steadily engaged in the practise of unaccounted sales by accounting in seven cases only 10 per cent of the sale price. The documents recovered show that at the time of entering into contract with the purchasers for supply of materials, assessee shows the actual sale price and sales tax thereon. However, when sale is made, the bill raised is for much lower amount. Besides the above, the assessee was found to be engaged in suppression of 99 per cent of the price by recording in the books of account is only 1 per cent of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als before the Tribunal and Tribunal confirmed the order in the appeal, only department had filed this appeal before us and the assessee has accepted the order of the CIT (Appeals) making a further addition of 5 lakhs. 4. During hearing, the standing counsel for the department contended that neither the first appellate authority nor the Tribunal considered the correctness of the block assessment with, reference to seized materials or statements recorded which constitute evidence under section 132(4) of the Income-tax Act, The counsel for assessee on the other hand, contended that the questions raised pertain to only modification to the undisclosed income determined by first appellate authority and so much so, the same does not const ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt recorded by the search team under section 132(4) of the Act which should constitute the basis for a block assessment. 5. After going through all orders and after hearing both sides, we notice that the substantial question of law that arises for our decision is whether the Tribunal was justified in confirming the order of the CIT(A) who issued order by making a guess work without referring to any material constituting evidence as referred to in section 158BB(1) of the Income-tax Act. 6. First appellate authority took the view that the undisclosed income estimated by the Assessing Officer works out to 60 to 85 per cent of the turnover. Surprisingly, he does not state what is the basis of his adopting the turnover of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indings whether tenable or not with reference to facts and figures based on seized records and statements. In our view, neither the CIT (Appeals) nor the Tribunal has considered the appeal in the way they ought to have done, that is by analysing the evidentiary value of the seized documents and the statements recorded and check whether the conclusions drawn by the Assessing Officer based on the evidence is tenable or not. When there is no proper exercise of jurisdiction by the first appellate authority, particularly in a case of block assessment, where undisclosed income has to be assessed based on evidence gathered on inspection, in terms of section 158BB(1) of the Act, the recourse open to us is only to set aside the orders issued in appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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