ACIT, CHENNAI V. Shri Kandasamy Sah, Kancheepuram

ITSSA 20/CHNY/2012

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0540 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 23-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 20-01-2015
• Assessment Year: misc
• Appeal Filed On: 13-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Gift; Depreciation; Block assessment
• Section: 148; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI .. , , BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ./ I.T(SS)A.NO.20/MDS/2012 ( ! / ASSESSMENT YEAR :BLOCK PERIOD) THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE III (1), CHENNAI. ( /APPELLANT) VS. SHRI. KANDASAMY SAH, NO.122/B-1, ENNAIKARA STREET, KANCHEEPURAM 631 501. [PAN : AFSPK7364Q] ( /RESPONDENT) ' # $ / APPELLANT BY : SMT. RUBY GEORGE, IRS, CIT. %&' # $ / RESPONDENT BY : SHRI. T. VASUDEVAN, ADVOCATE ' ( # )* /DATE OF HEARING : 20.01.2015. +,! # )* /DATE OF PRONOUNCEMENT : 23.01.2015. / O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER THE REVENUE IS AGGRIEVED BY THE ORDER DATED 30-03-2 012 PASSED BY LD CIT(A)-I, CHENNAI IN RESPECT OF BLOCK ASSESSM ENT ORDER PASSED FOR THE BLOCK PERIOD ENDING 14.09.2000, WHEREIN THE LD CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE ON THE FOLLOWING ISS UES. I.T(SS) A NO.20/MDS/2012. . :- 2 -: (A) UNACCOUNTED INVESTMENT IN IMMOVABLE PROPERTIES. (B) ADDITION RELATING TO VEHICLES. (C) UNACCOUNTED INVESTMENT IN STOCK IN TRADE. (D) UNACCOUNTED INVESTMENT IN JEWELLERY. (E) TELESCOPING OF SUNDRY CREDITORS BALANCE. (F) ADDITION RELATING TO LOW DRAWINGS. 2. THE ASSESSEE IS IN THE BUSINESS OF PURCHASE AND SALE OF ZARI, SILK SAREES AND OTHER HANDLOOM PRODUCTS UNDER THE NAME A ND STYLE K.S.B. SILKS AT KANCHEEPURAM. THE REVENUE CARRIED OUT SE ARCH AND SEIZURE OPERATION U/S 132 OF THE ACT IN THE HANDS OF THE AS SESSEE ON 14.09.2000, CONSEQUENT TO WHICH THE BLOCK ASSESSMEN T WAS FRAMED BY THE ASSESSING OFFICER U/S 158BC OF THE ACT DETERMIN ING UNDISCLOSED INCOME AT D.1,05,91,555/-, VIDE BLOCK ASSESSMENT OR DER DATED 31.12.2002. THE ASSESSEE CHALLENGED THE SAME BY FI LING APPEAL BEFORE LD CIT(A) AND THE SAME WAS PARTLY ALLOWED. AGGRIEV ED BY THE RELIEF GRANTED BY LD CIT(A), THE REVENUE HAS PREFERRED THI S APPEAL BEFORE US. 3. THE FIRST ISSUE RELATES TO THE ADDITION MADE ON ACCOUNT OF UNACCOUNTED INVESTMENTS MADE IN IMMOVABLE PROPERTIE S. IN THE BLOCK ASSESSMENT PROCEEDINGS, THE AO LISTED OUT THE IMMOV ABLE PROPERTIES PURCHASED BY THE ASSESSEE AND ARRIVED AT THE VALUE OF UNDISCLOSED PROPERTIES AT D.41,30,690/-. HOWEVER, THE ASSESSEE CONTENDED THAT I.T(SS) A NO.20/MDS/2012. . :- 3 -: THESE PROPERTIES WERE DULY DISCLOSED BY HIM UNDER V DIS SCHEME AND IN SUPPORT OF THE SAME HE PRODUCED THE NECESSARY DOCUM ENTS. THE AO NOTICED THAT THE VDIS CERTIFICATES WAS ISSUED BY TH E COMMISSIONER ONLY TO THE EXTENT OF D.5,33,334/- AND HENCE AGREED WITH THE CONTENTIONS OF THE ASSESSEE ONLY TO THE EXTENT OF THE ABOVE SAID A MOUNT AND ASSESSED THE BALANCE AMOUNT OF D.35,97,357/- AS UND ISCLOSED INCOME OF THE ASSESSEE. 4. IT IS PERTINENT TO NOTE THAT THE ASSESSEE HA D FILED THE VDIS DECLARATION ON 29.12.1997, I.E., MUCH BEFORE THE DA TE OF SEARCH WHEREIN ALL THE INVESTMENTS MADE IN THE IMMOVABLE P ROPERTIES HAD BEEN DISCLOSED TO THE DEPARTMENT. HOWEVER, THE ASS ESSEE APPEARS TO HAVE FAILED TO PAY THE FULL TAX BEFORE THE DUE DATE PRESCRIBED UNDER THE VDIS SCHEME AND HENCE THE VDIS CERTIFICATE WAS ISSU ED ONLY TO THE EXTENT OF TAX PAID BY THE ASSESSEE. HENCE, THE ASS ESSEE CONTENDED BEFORE THE LD CIT(A) THAT HE HAD ALREADY DISCLOSED ALL THE IMMOVABLE ASSETS TO THE DEPARTMENT THROUGH THE VDIS SCHEME AN D NON- ACCEPTANCE OF THE SAME ON TECHNICAL REASONS WOULD N OT MAKE THE SAME AS UNDISCLOSED ASSETS. ACCORDINGLY IT WAS CONTENDED THAT THE DEPARTMENT SHOULD HAVE PROCEEDED TO ASSESS THOSE AS SETS UNDER REGULAR ASSESSMENT PROCEEDINGS AND THE SAME CANNOT BE CONSIDERED AS I.T(SS) A NO.20/MDS/2012. . :- 4 -: UNDISCLOSED INCOME UNDER BLOCK ASSESSMENT PROCEED INGS. THE LD CIT(A) WAS CONVINCED WITH THE CONTENTIONS OF THE AS SESSEE AND ACCORDINGLY DELETED THE ADDITION. 5. BEFORE US, THE LD D.R PLACED STRONG RELIANCE ON THE ASSESSMENT ORDER. THE LD D.R FURTHER PLACED RELIANCE ON THE D ECISION RENDERED BY HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. R. SELVARAJ (2013)(85 CCH 198 CHEN HC) IN ORDER TO CONTEND THAT THE DETAI LS FOUND IN THE VDIS DECLARATION CAN BE USED BY THE ASSESSING OFFIC ER. THE LD D.R FURTHER PLACED RELIANCE ON THE DECISION RENDERED BY HONBLE SUPREME COURT REPORTED IN 350 ITR 489 AND SUBMITTED THAT TH E HONBLE APEX COURT HAS HELD THAT THE ADVANCE TAX PAYMENT AND TDS DEDUCTION WOULD NOT MAKE THE INCOME REPRESENTED BY THOSE PAYM ENTS AS DISCLOSED ONES. 6. ON THE CONTRARY, THE LD A.R PLACED STRONG REL IANCE ON THE SUBMISSIONS MADE BEFORE THE LD CIT(A). HE FURTHER SUBMITTED THAT THE DECISION WAS RENDERED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF R.SELVARAJ (SUPRA), IN THE CONTEXT OF RE-OP ENING OF ASSESSMENT AND HENCE THE SAME IS NOT APPLICABLE TO THE BLOCK A SSESSMENT PROCEEDINGS, WHICH IS A SEPARATE CODE BY ITSELF. WITH REGARD TO THE I.T(SS) A NO.20/MDS/2012. . :- 5 -: DECISION OF HONBLE SUPREME COURT REFERRED ABOVE, T HE LD A.R SUBMITTED THAT THE SAME WAS RENDERED IN THE CONTEXT OF ADVANCE TAX AND TDS AMOUNTS AND HENCE THE SAME ALSO SHALL NOT H AVE APPLICATION TO THE FACTS OF THE INSTANT CASE. THE LD A.R ALSO SUBMITTED THAT THE VIEW TAKEN BY THE FIRST APPELLATE AUTHORITY FINDS S UPPORT FROM THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS. NAVEEN GERA (328 ITR 516). 7. HAVING HEARD THE RIVAL CONTENTIONS, WE ARE O F THE VIEW THAT THERE IS MERIT IN THE CONTENTIONS OF THE ASSESSEE. FIRST OF ALL, THE ASSESSEE HAS DECLARED ALL THE IMPUGNED IMMOVABLE ASSETS IN T HE VDIS DECLARATIONS FILED BY HIM, MUCH EARLIER TO THE DATE OF SEARCH. THE ENTIRE QUANTUM OF DECLARATION WAS NOT ACCEPTED DUE TO TECHNICAL REASONS, I.E., NON-PAYMENT OF ENTIRE AMOUNT OF TAX BEFORE THE DUE DATE. UNDER THESE SET OF FACTS, THE RIGHT COURSE T HAT WAS AVAILABLE TO THE DEPARTMENT WAS TO ASSESS THOSE INCOME, I.E., TH AT WAS NOT CONVERED BY THE VDIS CERTIFICATE, BY RE-OPENING THE ASSESSMENTS U/S 148 OF THE ACT. IT APPEARS THAT THE DEPARTMENT HAS FAILED TO ASSESS THOSE INCOME UNDER U/S 148 OF THE ACT. IN OUR CONS IDERED VIEW, THE DEPARTMENT IS NOT ENTITLED TO MAKE GOOD ITS FAILURE BY ASSESSING THOSE ASSETS UNDER BLOCK ASSESSMENT PROCEEDINGS, SINCE TH E BLOCK I.T(SS) A NO.20/MDS/2012. . :- 6 -: ASSESSMENT MADE UNDER CHAPTER XIV IS A COMPLETE COD E BY ITSELF AND IT IS WELL SETTLED PROPOSITION THAT THE REGULAR ASSESS MENT PROCEEDINGS AND BLOCK ASSESSMENT PROCEEDINGS ARE PARALLEL TO EACH O THER AND CAN BE TAKEN UP SIMULTANEOUSLY. WE NOTICE THAT THE CASE L AWS RELIED UPON BY THE REVENUE HAVE BEEN RENDERED UNDER DIFFERENT CONT EXTS. ON THE CONTRARY, THE DECISION RENDERED BY HONBLE DELHI HI GH COURT IN THE CASE OF NAVEEN GERA (SUPRA) IS APPLICABLE TO THE FACTS O F THE INSTANT CASE, I.E., THE HONBLE DELHI HIGH COURT HAS HELD THAT, I F THE DETAILS OF THE PROPERTIES ALREADY DISCLOSED TO THE DEPARTMENT UNDE R VDIS, THEN IT CANNOT BE SAID THAT THE DEPARTMENT CAME IN POSSESSI ON OF ANY INFORMATION WHICH IT DID NOT POSSESS EARLIER. HENC E, WE ARE IN AGREEMENT WITH THE VIEW EXPRESSED BY LD CIT(A) ON T HIS ISSUE. 8. THE NEXT ISSUE RELATES TO THE ADDITION MADE IN RESPECT OF VEHICLES. THE LD D.R SUBMITTED THAT THE UNDISCLOSE D INCOME OF THE ASSESSEE WAS COMPUTED UNDER INVESTMENT METHOD. WHI LE TAKEN THE VALUE OF VEHICLES, THE ASSESSEE HAD TAKEN THE WDV O F VEHICLES AT D.4,14,690/-, INSTEAD OF TAKING THE COST THEREOF. THE LD D.R SUBMITTED THAT THE AO TOOK THE VIEW THAT THE DEPRECIATION IS ADMISSIBLE ONLY IF THE UNDISCLOSED INCOME IS COMPUTED UNDER INCOME METHOD. ACCORDINGLY THE AO ADOPTED THE VALUE OF VEHICLES AT COST AT D.9 ,10,476/-. THE LD I.T(SS) A NO.20/MDS/2012. . :- 7 -: CIT(A), HOWEVER, HELD THAT THE DEPRECIATION IS ADMI SSIBLE AS DEDUCTION AGAINST INCOME DETERMINED EVEN UNDER INVESTMENT M ETHOD ALSO. 9. WE HEARD THE PARTIES ON THIS ISSUE. THERE S HOULD NOT BE ANY DISPUTE THAT THE DEPRECIATION IS A STATUTORY DEDUCT ION AND THE SAME IS ALLOWABLE AS DEDUCTION WHILE COMPUTING THE TOTAL IN COME. FURTHER THE DEPRECIATION IS A NON-CASH EXPENDITURE. THE TOTAL INCOME MAY BE COMPUTED UNDER DIFFERENT METHODS AND THE INVESTMEN T METHOD IS ONLY OF THE METHODS OF COMPUTING THE TOTAL INCOME. HENCE, EVEN IF THE VALUE OF VEHICLES IS TAKEN AT COST, THE DEPRECIATIO N SHOULD BE ALLOWED SEPARATELY. HOWEVER, IF THE VALUE OF VEHICLES IS T AKEN AT WDV, THEN THE DEPRECIATION IS DEEMED TO HAVE BEEN ALLOWED. H ENCE, WE AGREE WITH THE DECISION RENDERED BY LD CIT(A) ON THIS ISS UE AND ACCORDINGLY UPHOLD THE SAME. 10. THE NEXT ISSUE RELATES TO THE UNACCOUNTED INVESTMENT IN STOCK IN TRADE. DURING THE COURSE OF SEARCH PROCEEDINGS, THE PHYSICAL VERIFICATION OF STOCK WAS CARRIED OUT AND THE VALUE OF STOCK WAS DETERMINED AT D.12,86,021/-. HOWEVER, THE ASSESSEE HAS TAKEN THE VALUE OF STOCK AT D.10,57,990/- IN HIS COMPUTATION. HENCE THE AO, IN EFFECT, ASSESSED THE DIFFERENCE BETWEEN THE TWO FIG URES AMOUNTING TO I.T(SS) A NO.20/MDS/2012. . :- 8 -: D.2,28,031/- AS UNDISCLOSED INCOME OF THE ASSESSEE, SINCE HE TOOK THE VALUE OF STOCK AT D.12,86,021/-. THE ASSESSEE CONT ENDED BEFORE LD CIT(A) THAT THE SEARCH PARTIES HAVE TAKEN THE VALUE OF STOCK AT TAG PRICE, I.E., AT SELLING PRICE, WHEREAS, HE HAS TAK EN THE VALUE OF STOCK AT COST PRICE. IN THE REMAND REPORT, THE AO SUBMITTED THAT THE ASSESSEE HAD ACCEPTED THE VALUE DETERMINED BY THE SEARCH OFF ICIALS IN THE STATEMENT RECORDED AND ACCORDINGLY CONTENDED THAT T HE SAID VALUE ONLY SHOULD BE ASSESSED. HOWEVER, THE LD CIT(A) WAS CON VINCED WITH THE CONTENTIONS OF THE ASSESSEE AND ACCORDINGLY DIRECTE D THAT THE ADDITION OF D.2,28,031/- (MENTIONED AS D.2,28,061/-) SHOULD BE DELETED. 11. WE HEARD THE PARTIES ON THIS ISSUE AND PERUS ED THE RECORD. WE NOTICE THAT THE ASSESSING OFFICER HAS SIMPLY PLACED RELIANCE ON THE SWORN STATEMENT GIVEN BY THE ASSESSEE AT THE TIME O F SEARCH, WHEREIN THE ASSESSEE HAD ACCEPTED THE VALUE OF D.12,86,021/ -. HOWEVER, THE ASSESSEE HAS POINTED OUT THAT THE ABOVE SAID VALUE WAS DETERMINED ON THE BASIS OF SELLING PRICE, WHEREAS THE COST PRICE OF THOSE GOODS ACTUALLY WORK OUT TO D.10,57,990/-. THERE SHOULD N OT BE ANY DISPUTE THAT THE VALUE OF STOCK IS NORMALLY VALUED AT COST OR MARKET PRICE, WHICHEVER IS LOWER. THOUGH THE ASSESSEE MIGHT HAVE ADMITTED THE VALUE DETERMINED BY THE SEARCH OFFICIALS IN THE ST ATEMENT TAKEN AT THE I.T(SS) A NO.20/MDS/2012. . :- 9 -: TIME OF SEARCH, YET HE HAS FOUND OUT THE MISTAKE AN D CORRECTED THE SAME AT THE TIME OF FILING BLOCK RETURN. IN OUR VI EW, THE MISTAKE POINTED OUT BY THE ASSESSEE IN THE VALUATION TAKEN BY THE SEARCH OFFICIALS CANNOT BE IGNORED. IN THE ABSENCE OF ANY OTHER MATERIAL TO CONTRADICT THE STOCK VALUATION (AT COST) SHOWN BY T HE ASSESSEE, WE ARE OF THE VIEW THE SAME SHOULD BE ADOPTED. HENCE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD CIT(A) ON THIS ISSUE A LSO. 12. THE NEXT ISSUE RELATES TO THE UNDISCLOSED I NVESTMENT IN JEWELLERY AND SILVER ARTICLES. DURING THE COURSE OF SEARCH, THE ASSESSEE WAS FOUND IN POSSESSION OF 2,283.800 GRAMS OF GOLD AND 3038.800 GRAMS OF SILVER WARE. IN ADDITION TO THE ABOVE, IT WAS N OTICED THAT THE ASSESSEE HAS GIFTED 1878.700 GRAMS OF GOLD AND 9,01 0 GRAMS OF SILVER WARE TO HIS DAUGHTER AT THE TIME OF HER MARRIAGE. THE AO GAVE A DEDUCTION FOR 500 GRAMS OF GOLD AND ASSESSED THE BA LANCE QUANTITY OF GOLD WEIGHING 3,662.500 GRAMS (2283.800 + 1878.700 (-) 500) AND THE ENTIRE QUANTITY OF SILVER (3038 + 9010) AS UNDI SCLOSED INCOME OF THE ASSESSEE. 13. BEFORE LD CIT(A), THE ASSESSEE CONTENDED THA T THE GOLD JEWELLERIES FOUND AT THE TIME OF SEARCH INCLUDED TH E GOLD JEWELLERIES I.T(SS) A NO.20/MDS/2012. . :- 10 -: BELONGING TO HIS MOTHER (500 GMS), HIS SPOUSE (350 GMS) AND ALSO THE GOLD DECLARED UNDER VDIS SCHEME (250 GMS). THE ASS ESSEE ALSO CLAIMED THAT HE HAD RECEIVED GIFTS OF GOLD ON NAMIN G CEREMONY AND BIRTH DAYS (250 GMS). THE LD CIT(A) ACCEPTED THE C ONTENTIONS OF THE ASSESSEE WITH REGARD TO THE GOLD JEWELLERY BELONGIN G TO MOTHER, SPOUSE AND THAT DECLARED UNDER VDIS SCHEME. HOWEVE R, HE DID NOT ACCEPT THE CLAIM OF RECEIPT OF GIFT DURING NAMING C EREMONY AND BIRTH DAYS. 14. CONSIDERING THE FACT THAT THE LD CIT(A) HAS G RANTED RELIEF TO THE EXTENT OF GOLD BELONGING TO THE MOTHER AND SPOUSE O F THE ASSESSEE AND ALSO THAT DECLARED UNDER VDIS SCHEME, WE DO NOT FIND ANY INFIRMITY IN HIS ORDER, SINCE THE LADIES IN THE IND IAN FAMILIES NORMALLY POSSESS JEWELLERIES TO THAT EXTENT. ACCORDINGLY, W E APPROVE HIS ORDER ON THIS ISSUE. 15. IN RESPECT OF THE SILVER ARTICLES ALSO, THE LD CIT(A) GAVE RELIEF IN RESPECT OF SILVER ITEMS BELONGING TO THE ASSESSEES MOTHER (2500 GMS), SPOUSE (3750 GMS) AND THAT DECLARED UNDER VDIS SCHE ME (1000 GMS). THE LD CIT(A) DID NOT ACCEPT THE CLAIM OF RECEIPT O F GIFTS (1500 GMS) BY THE ASSESSEE. IT IS CUSTOMARY FOR THE LADIES IN THE INDIAN FAMILIES TO I.T(SS) A NO.20/MDS/2012. . :- 11 -: POSSESS SILVER ARTICLES. CONSIDERING THE QUANTITY OF THE SILVER ARTICLES ACCEPTED IN THE HANDS OF EACH OF THE MEMBER OF FAMI LY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD CIT(A) ON THIS ISS UE ALSO AND ACCORDINGLY UPHOLD THE SAME. 16. THE NEXT ISSUE RELATES TO THE ADDITION RE LATING TO SUNDRY CREDITORS. THE AO DID NOT ACCEPT THE CLAIM OF DEDU CTION OF LIABILITY TOWARDS SUNDRY CREDITORS TO THE TUNE OF D.22,91,570 /-. BEFORE LD CIT(A), IT WAS SUBMITTED THAT THE ASSESSING OFFICER HAS ACCEPTED THE SUNDRY DEBTORS BALANCE DECLARED BY THE ASSESSEE, BU T REJECTED THE CLAIM OF LIABILITY TOWARDS SUNDRY CREDITORS. IT WA S FURTHER SUBMITTED THAT THE SUNDRY DEBTORS BALANCE REPRESENT CREDIT SA LES AND SUNDRY CREDITORS BALANCE REPRESENT CREDIT PURCHASES. ACCO RDINGLY IT WAS SUBMITTED THAT THE SALES COULD NOT HAVE BEEN MADE W ITHOUT EFFECTING PURCHASES. THE ASSESSEE ALSO SUBMITTED THAT BOTH T HE SUNDRY DEBTORS AND SUNDRY CREDITORS BALANCE WERE REFLECTED IN THE BOOKS OF ACCOUNTS FOUND AT THE TIME OF SEARCH. BEFORE LD CIT(A), THE ASSESSEE ALSO FURNISHED THE DETAILS OF RELEVANT SEIZED DOCUMENT, WHEREIN THE LIABILITY TOWARDS SUNDRY CREDITORS WERE NOTED DOWN. CONVINCE D WITH THE CONTENTIONS OF THE ASSESSEE, THE LD CIT(A) DIRECTED THE AO TO CONSIDER THE LIABILITY TOWARDS SUNDRY CREDITORS, WHICH WAS R EQUIRED TO BE I.T(SS) A NO.20/MDS/2012. . :- 12 -: DEDUCTED FROM THE AGGREGATE AMOUNT OF INVESTMENTS F OR ARRIVING AT THE INCOME. 17. WE HEARD THE PARTIES ON THIS ISSUE. WE HAV E ALREADY NOTICED THAT THE UNDISCLOSED INCOME OF THE ASSESSEE WAS COM PUTED UNDER INVESTMENT METHOD. WHILE COMPUTING THE INCOME UN DER THIS METHOD, THE LOANS AND ASCERTAINED LIABILITIES ARE R EQUIRED TO BE DEDUCTED FROM THE AGGREGATE VALUE OF ASSETS FOR THE PURPOSE OF ARRIVING AT THE INCOME. THE ASSESSEE HAS POINTED O UT THAT THE LIABILITY TOWARDS CREDITORS ARE COLLATED FROM THE SEIZED MATE RIAL ONLY AND THE ASSESSEE HAS ALSO LINKED THE OUTSTANDING LIABILITY WITH SPECIFIC SEIZED MATERIAL. HOWEVER, IT IS SEEN THAT THE AO DID NOT BRING ANY MATERIAL ON RECORD TO DISPROVE THE CLAIM OF THE ASSESSEE. WE N OTICE THAT THE LD CIT(A) HAS OBSERVED THAT THE AO WAS NOT CORRECT IN IGNORING THE SEIZED MATERIALS IN SELECTIVE MANNER, I.E., THE VIEW OF TH E LD CIT(A) WAS THAT THE SEIZED MATERIALS SHOULD BE GIVEN DUE CREDENCE I N TOTO, UNLESS CONTRARY IS SHOWN. WE AGREE WITH THE LEGAL POSITIO N EXPRESSED BY LD CIT(A). FURTHER, THE AO HAS ALSO FAILED TO CONTRAD ICT THE CLAIM MADE BY THE ASSESSEE IN THIS REGARD. HENCE, WE AGREE WI TH THE VIEW EXPRESSED BY LD CIT(A) ON THIS ISSUE ALSO. I.T(SS) A NO.20/MDS/2012. . :- 13 -: 18. THE LAST ISSUE RELATES TO THE ADDITION MADE TOWARDS INSUFFICIENT DRAWINGS. IT IS AN ADMITTED FACT THAT THE AO HAS M ADE THIS ADDITION ON ESTIMATED BASIS WITHOUT MAKING REFERENCE TO ANY OF THE SEIZED MATERIALS. IT IS A WELL SETTLED PROPOSITION OF LAW THAT THE BLOCK ASSESSMENT CAN BE MADE ONLY ON THE BASIS OF SEIZED MATERIALS. APART FROM THIS LEGAL POSITION, WE NOTICE THAT THE LD CIT (A) HAS ALSO TAKEN INTO CONSIDERATION ABOUT THE FACT THAT THE ASSESSEE WAS RESIDING IN A RURAL PLACE, WHERE THE COST OF LIVING IS GENERALLY LOW VIS--VIS THE METRO CITIES. HENCE, IN OUR VIEW, THE LD CIT(A) WAS JUST IFIED IN DELETING THIS ADDITION MADE ONLY ON ESTIMATED BASIS AND NOT WITH REFERENCE TO ANY SEIZED MATERIAL. 19. IN THE RESULT, THE APPEAL FILED BY THE REVE NUE IS DISMISSED. PRONOUNCED ON 23.01.201 5 SD/- ( ) (VIKAS AWASTHY) /JUDICIAL MEMBER SD/- (.. ) (B.R. BASKARAN) ! / ACCOUNTANT MEMBER 3 /DATED:23.01.2015. K.V 4 # %)5 6!) /COPY TO: 1. '/ APPELLANT 2. %&' / RESPONDENT 3. ' 7) ( )/CIT(A) 4. ' 7) /CIT 5. 89 %) : /DR 6. 9; <( /GF. I.T(SS) A NO.20/MDS/2012. . :- 14 -: