TMI Blog2011 (11) TMI 489X X X X Extracts X X X X X X X X Extracts X X X X ..... . Thus the finding of the appellate authority and the ITAT that the assessment made under Chapter 14B is not based upon the material seized during search is justified and no other conclusion could have been arrived at having regard to the documents seized during search - Decided in favor of assessee. - IT Appeal No. 1099 of 2006 - - - Dated:- 22-11-2011 - V.G. Sabhahit and S.N. Satyanarayana, JJ. M. Thirumalesh for the Appellant. A. Shankar and M. Lava for the Respondent. JUDGMENT 1. This appeal by the Revenue is filed being aggrieved by the order dated 23.2.2006 passed by the Income-tax Appellate Tribunal in No. IT(SS) A.No.29/Bang/2001 for the block assessment period 1,4.1987 to 28.1.1998 on the file of Income Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unaccounted jewellery, if any. Thereafter, notices 'under Sections 142(1) and 143(2) of the Act were issued. 3. After hearing the assessee, the Assessing Officer by order dated 30-3-2000 held that the amount involved for the construction of commercial complex was undisclosed and' the particulars of the same had not been furnished at the time of regular assessment. Further, in view of the material found during the search comprising of agreement entered into by the assessee with the contractor for construction of the commercial complex with an estimate value of Rs. 30,00,000 and the letter written on 16.9.1997 by the assessee to KSFC intimating that the estimate of the construction of the complex was increased to Rs. 85,00,000/- he got th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he first appellate authority has rightly held that there was no material found in the course of search to sustain the addition. The addition was based upon the two documents as referred to above and further an addition was made by the assessing officer in addition no the valuation made by the DVO. Therefore, the addition could not be sustained and accordingly, confirmed the order passed by the first appellate authority and the tribunal also held that in the cross objection the assessee had supported the finding recorded by the appellate authority and no new ground has been raised. In the result, the appeal preferred by the revenue is dismissed and the cross objection filed by the assessee is allowed. Being aggrieved by the said order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d also sought for further release of financial assistance from the KSFC. Further the valuation made by the DVO as on the date of the inspection with relevant material as also the amount added by the assessing officer could not be said to be arbitrary and not based upon the material seized during search. Therefore, the appellate authority and Income-tax Appellate Tribunal. 1 were not justified in holding that the addition is not based upon the material seized during search. 8. On the other hand, the learned Counsel appearing for the respondent submitted that the assessment under Section 158BFA provides for the enquiry and assessment after the return is filed and the additional assessment can be made. It is in the nature of additional ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord. In the decision of the Supreme Court in Hotel Blue Moon's case relied upon by the learned Counsel appearing for the respondent the scope of assessment under Chapter 14-B has been reiterated as follows in paragraph 12 of the judgment: "12. Chapter XIV-B provides for an assessment of the undisclosed income unearthed as a result of search without affecting the regular assessment made or to be made. Search is the sine qua non for the block assessment. The special provisions are devised to operate in the distinct field of undisclosed income and are clearly in addition to the. regular assessments covering the previous years falling in the block period. The special procedure of Chapter XIV-B is intended to provide a mode of assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ild commercial building according to estimate valued at Rs.30,00,000/-' and the only other document is the letter dated 16.9.1997 addressed by the assessee to the Managing Director KSFC, wherein KSFC has been informed that the total cost of the project is increased to Rs. 85,00,000/- and sought for further additional loan of Rs.25,00,000/-. Apart from these two documents, there are no other material found during search and the un-disclosure of income had to be considered only with reference to said two documents with reference to the expenses disclosed in the returns. Therefore, the assessing officer was not at all justified in passing the order of his assessment on the basis of DVOs report and adding some more amount on his own to the said ..... X X X X Extracts X X X X X X X X Extracts X X X X
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