TMI Blog2008 (11) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... ramed in this tax case. However, the learned counsel would refer only to questions1 and 4 for consideration. "1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the block assessments under section 158BC could not be made unless the assessment is based only on materials, valuables, etc., found during the course of such search? 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the issues considered in the block assessment should have been considered in a reassessment procedure and not in a block assessment ? 3. Whether, in the facts and circumstances of the case, the Tribunal was right in holding that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal. Before the Tribunal additional evidence was filed by the assessee in spite of the objection by the Department. The Tribunal considered the additional evidence and after giving a finding on the merits, rejected the additional evidence. However, with regard to the sustainability of the addition of the undisclosed income, the Tribunal held that the existence of the fixed deposits was not detected as a result of the search but by investigation which followed the search and in view of Chapter XIV-B of the Act which is a special procedure for assessment of "undisclosed income found as a result of the search only" held that the sum of Rs. 2.56 crores cannot be included in the undisclosed income of the block period. Against this the Departmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 7. In the case of CIT v. Ravi Kant Jain [2006] 250 ITR 141 (Delhi), the materials seized and the books of account were of account were of a complex nature and hence, special auditors were appointed, with instruction to submit a report. On the basis of the report submitted by the special auditors, assessment was made. It was contended by the assessee that the income was determined not on the basis of any materials unearthed during search, but on the basis of the report of the special auditors. The court held (page 145) : "The special procedure of Chapter XIV-B is intended to provide a mode of assessment of undisclosed income, which has been detected as a result of search. As the statutory provisions go to show, it is not intended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, the learned counsel for the respondent-assessee referred to CIT v. Coromandal Indag Products P. Ltd. [2003] 260 ITR 289 (Mad) where the question related to imposition of penalty and this court held that while considering the question of imposition of penalty and remitting the matter to the Assessing Officer to reconsider the claim for deduction, the Tribunal ought not to have observed that the claim for deduction was only a legal contention and the claim could not be recorded as false claim. The view expressed by the Appellate Tribunal that the claim for deduction was not a false claim was not approved by the court. 10. The learned counsel for the assessee also submitted that after having held that the additional evidence shall n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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