TMI Blog2013 (10) TMI 1023X X X X Extracts X X X X X X X X Extracts X X X X ..... sense to materials unearthed during search. It is in addition to the regular assessment already done or to be done. The assessment for the block period can only be done on the basis of evidence found as a result of search or requisition of books of account or documents and such other materials or information as are available with the Assessing Officer. Therefore, the income assessable in block assessment under Chapter XIV-B is the income not disclosed but found and determined as the result of search under section 132 or requisition under section 132A of the Act. In the present case, there is a conclusive finding that the information sought to be relied upon by the Assessing Officer was already available in the balance-sheets or the books ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, a notice under section 158BC of the Act was issued to the assessee for filing a return of income for the block period April 1, 1985, to January 3, 1996. The assessee complied with the notice and filed his return of income declaring the total undisclosed income for the block period as "nil". Thereafter, a notice under section 143(2) of the Act was issued to the assessee and the return was taken up for consideration. Although the Assessing Officer was concerned with five items, we are now concerned with four items, namely : (i) unexplained credit in the name of M. Ch. Dora ; (ii) interest accrued on the above loan ; (iii) unexplained credit shown under the head "unsecured loans" ; (iv) unexplained credit for vehicle maintenance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment. The appeal was accordingly allowed by the Tribunal. Learned counsel for the assessee has referred to two decisions in support of his case and in fact, learned counsel for the Revenue did not dispute the propositions laid down in those two cases. As luck would have it, one of us (Chief Justice) was a member of the Bench in both the cases. In CIT v. Vishal Aggarwal [2006] 283 ITR 326 (Delhi), it was held, relying upon a decision of the Rajasthan High Court in CIT v. Elegant Homes P. Ltd. [2003] 259 ITR 232 (Raj), that if undisclosed income is found on the basis of material seized during the course of a search, then that should be considered as undisclosed income in terms of the scheme of special assessment under Chapter XIV-B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or allowance claimed under this Act which is found to be false." The above provision makes it clear that undisclosed income is that income which has not been disclosed or would not have been disclosed for the purposes of the Act. In CIT v. Ravi Kant Jain [2001] 250 ITR 141 (Delhi), it has been held that in a block assessment, the adverse material ought to have been unearthed during the search and that the assessment for the block period can be made only on the basis of the evidence found as a result of the search. Therefore, it is clear that undisclosed income is not only that income which would not have been disclosed for the purposes of the Act, but it must be unearthed during the search. Conversely, if the income has already been di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sition under section 132A of the Act." (emphasis is supplied) In the present case, there is a conclusive finding that the information sought to be relied upon by the Assessing Officer was already available in the balance-sheets or the books of account of the assessee. As such, the material obtained during the search did not lead to the unearthing of income. On the contrary, the Assessing Officer merely had a change of opinion which led him to conclude that what was discovered during the search was undisclosed income. This change of opinion was neither warranted in law, nor could it form the basis of invoking the provisions of Chapter XIV-B of the Act. That being the position, we are of the opinion that the special provisions of Chapter XI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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