9911796707
TMI Blog2007 (8) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... ively called the Bansal Group. Thereafter, proceedings were initiated against the assessee under Section 158-BC of the Act. The Assessing Officer made huge additions and these additions were, by and large, confirmed by the Commissioner of Income Tax (Appeals) [CIT (A)]. The Tribunal set aside the orders of the CIT (A) and that is why the Revenue is before us. Since the facts of all the cases are more or less similar, they were dealt with by the Tribunal by one order and we do the same. 3. Two issues have been canvassed before us: firstly with regard to unexplained payment of commission and secondly with regard to excess stock of goods found in the searched premises. 4. There is no dispute that the search and seizure operation was conducte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some amounts in the accounts of the assessee. 7. The principal contention urged by the assessee before the Tribunal, and which was accepted, was that during the course of search, no evidence was found of any bogus payments. Under these circumstances, the provisions of Chapter XIV-B of the Act were not at all applicable. The statements of V.P. Jain were post-search statements having no direct nexus with the search and they could not have been relied upon for the purposes of proceedings under Section 158-BC of the Act. 8. As we understand it, in respect of a block assessment, undisclosed income is required to be computed on the basis of evidence found during the search or being directly relatable to evidence found during the search. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Elegant Homes Pvt. Ltd., [2003] 259 ITR 232, the Rajasthan High Court held: ,"In Chapter XIV-B of the Act, special provisions for assessment in search cases have been given and if any amount of income has not been taxed and during the course of search, if some "undisclosed" income is found on the basis of material seized, that should be treated as undisclosed income as per the scheme of special assessment under the aforesaid Chapter." 11. The view expressed by this Court in Ravi Kant Jain is, of course, binding on us and we have also followed the view expressed by the Rajasthan High Court in Elegant Homes. In Commissioner of Income Tax v. Jupiter Builders Pvt. Ltd., [2006] 287 ITR 287, this Court reiterated the law that the undisclosed i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement was recorded after the search proceedings and appears to have been recorded only with a view to confirm the correctness of the account books. It is not as if the statement was recorded during the search proceedings nor is it the case of the Revenue that because of some incriminating material that was unearthed during the search proceedings that it became necessary to record the statement of V.P. Jain. It cannot, therefore, be said that the statement of V.P. Jain was a direct consequence or result of obtaining some incriminating material which showed that the assessee had undisclosed income. 14. Quite apart from the above, we also find that the statement of V.P. Jain was recorded behind the back of the assessee. When the assessee was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the average weight of the goods was 65 kg per bundle. That the entire exercise was an estimate is confirmed by the CIT (A) who arrived at an average weight at 60 kg per bundle. Similarly, in respect of the fine wire products, the Assessing Officer took the average weight at 20 kg per bundle and this was reduced by the CIT (A) to 16 kg per bundle. This fact is being mentioned only to show that both the Assessing Officer as well as the CIT (A) made a guess with regard to the average weight of each bundle. The Assessing Officer as well as the CIT (A) took into consideration the fact that the employees of the assessee accompanying the search party did not raise any objection when the estimates were made and in fact they signed the panchnama ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be an adequate substitute for a scientific investigation or carrying out some empirical study. The officers who conducted the search did not want to take the necessary trouble which, of course, would have been time consuming, but the impact of making a guesstimate can be quite damaging in so far as the assessee is concerned. The assessee cannot be made to suffer the consequences of lethargy on the part of the officers of the Revenue. 21. Under these circumstances, we are of the opinion that the Tribunal rightly came to the conclusion that the alleged excess stock calculated by the Revenue needs to be deleted. It is, of course, not possible today to redetermine the stock so the question of any remand does not arise. 22. In our view, no su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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