TMI Blog2007 (4) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee is a Hindu Undivided Family (in short 'HUF'). A search under Section 132 of the Income Tax Act was carried out at the residential and business premises of the Karta of the HUF, viz. Ratanshi Patel and his brother Khimji M Patel between 5.11.1998 and 30.11.1998. During the search, it was found that HUF assessee had a timber trading business by name Ram Plylam during the assessment years 1996-97, 1997-98 and 1998-99. The materials seized indicated that the assessee had also undisclosed income from the business and therefore, notice under Section 158BD of the Act was issued to the assessee on 13.6.2000, as the proprietor of the concern Ram Plylam. In response to the notice, the assessee filed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Assessing Officer had not computed the undisclosed income based on the materials, but merely on the basis that the family members of the assessee had moved before the Settlement Commission disclosing additional income by offering gross profit at 8% and held that the same cannot be a valid reason for invoking Section 158BB of the Act, inasmuch as Section 158BB, as amended by Finance Act, 2002 with retrospective effect from 1.7.1995 contemplates that the undisclosed income shall be computed in accordance with the provisions of that Act on the basis of evidence found as a result of search and such other material or information as were available with the Assessing Officer and relatable to such evidence. Acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BD read with Sections 158BC and 143(3) of the Act without any basis whatsoever, especially in the absence of any material indicating any suppression of sales or suppression of income by the assessee. 7. If that be so, we do not have any hesitation to hold that the undisclosed income cannot be assessed in the absence of any material collected during the search relating the assessee and that the Revenue cannot proceed on the basis of such material which is not related to the assessee invoking Section 158BD read with Sections 158BC and 143(3) of the Act for assessing the undisclosed income during the block period of 1988-89 to 1997-98 and 1.4.1998 to 5.11.1998. If the Revenue could able to subs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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