K.R.Devakiammal, CHENNAI V. DCIT, CHENNAI

ITSSA 80/CHNY/2003

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 1081 (ITAT-CHENNAI)
• Duration Of Justice: 12 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 15-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 15-09-2015
• Assessment Year: misc
• Appeal Filed On: 01-05-2003
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR B NISCHAL
• Assessee Lawyers: N DEVANATHAN
• Keywords: Gift; Source of fund; Valuation report; Block assessment
• Section: 143(3); 133(6); 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER I.T.(SS) A. NO.80/MDS/2003 BLOCK ASSESSMENT PERIOD : 1986-87 TO 1996-97 SMT. K.R. DEVAKIAMMAL, NO.8, PERUMAL II STREE, PURASAWALKAM HIGH ROAD, CHENNAI - 600 007. PAN : ACMPD 8274 D V. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE II(1), CHENNAI - 600 034. (()/ APPELLANT) (+,()/ RESPONDENT) () - . / APPELLANT BY : SH. N. DEVANATHAN, ADVOCATE +,() - . / RESPONDENT BY : DR. B. NISCHAL, JCIT / - 0% / DATE OF HEARING : 15.09.2015 1'2 - 0% / DATE OF PRONOUNCEMENT : 15.10.2015 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE ASSESSING OFFICER DATED 27.03.2003 AND PERTAINS TO BLOCK PERIOD 1986-87 TO 1996-97. 2 I.T.(SS) A. NO.80/MDS/2003 2. SH. N. DEVANATHAN, THE LD.COUNSEL FOR THE ASSESS EE, SUBMITTED THAT THERE WAS A SEARCH UNDER SECTION 132 OF THE INCOME- TAX ACT, 1961 (IN SHORT 'THE ACT') IN THE RESIDENTI AL PREMISES OF ONE SHRI P.R. GANAPATHY. DURING THE COURSE OF SEARCH O PERATION, THE REVENUE CLAIMED THAT INCRIMINATING MATERIAL RELATIN G TO PRESENT ASSESSEE WAS FOUND AND SEIZED. ACCORDINGLY, A NOTI CE WAS ISSUED UNDER SECTION 158BD OF THE ACT FOR ASSESSING THE IN COME FOR THE BLOCK PERIOD. REFERRING TO PROVISIONS OF SECTION 1 58BC AND 158BD OF THE ACT, THE LD.COUNSEL SUBMITTED THAT WHENEVER ANY MATERIAL WAS FOUND DURING THE COURSE OF SEARCH OPERATION REL ATING TO A PERSON OTHER THAN THE SEARCHED PERSON, THE ASSESSIN G OFFICER OF THE SEARCHED PERSON HAS TO RECORD HIS SATISFACTION RELA TING TO THE MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATIO N AND THEREAFTER TRANSMIT THE SAME TO THE ASSESSING OFFICER OF THE P ERSON IN RESPECT OF WHOM THE MATERIAL WAS FOUND. IN THIS CASE, ACCO RDING TO THE LD. COUNSEL, NO SUCH SATISFACTION WAS RECORDED BY THE A SSESSING OFFICER AT ANY STAGE OF THE PROCEEDINGS. THEREFORE, THE BL OCK ASSESSMENT MADE BY THE ASSESSING OFFICER AGAINST THE PRESENT A SSESSEE CANNOT STAND IN THE EYE OF LAW. ACCORDING TO THE LD. COUN SEL, RECORDING THE ASSESSING OFFICERS SATISFACTION IS A MANDATORY REQ UIREMENT IN 3 I.T.(SS) A. NO.80/MDS/2003 PROCEEDINGS AGAINST THE ASSESSEE. SINCE NO SEARCH WAS CARRIED ON IN THE PREMISES OF THE ASSESSEE, ACCORDING TO THE L D. COUNSEL, THE ENTIRE ASSESSMENT MADE AGAINST THE ASSESSEE IS AGAI NST THE PROVISIONS OF SECTION 158BD OF THE ACT. HENCE, IT HAS TO BE QUASHED. THE LD.COUNSEL FURTHER SUBMITTED THAT THE ASSESSEE HAS NOT RAISED THIS GROUND AT THE TIME OF FILING OF THE APPEAL. HOWEVER, THIS GROUND IS RAISED AS ADDITIONAL GROUND BEFORE T HIS TRIBUNAL. THEREFORE, THE LD.COUNSEL SUBMITTED THAT THE ADDITI ONAL GROUND MAY BE ADMITTED. 3. COMING TO THE MERIT OF THE APPEAL, THE LD.COUNSE L FOR THE ASSESSEE SUBMITTED THAT THE FIRST ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO ADDITION OF ` 26.2 LAKHS TOWARDS COST OF CONSTRUCTION OF THE BUILDING ON ESTIMATION BASIS. THE REVENUE CLAI MED THAT DURING THE COURSE OF SEARCH OPERATION, IT WAS FOUND THAT T HE ASSESSEE PURCHASED A PROPERTY AT NO.8, PERUMAL II STREET, CH ENNAI-7, IN THE YEAR 1985 FOR A TOTAL CONSIDERATION OF ` 85,000/-. ACCORDING TO THE LD. COUNSEL, NO ADDITION WAS MADE WITH REGARD TO PU RCHASE OF THE PROPERTY. HOWEVER, THE ASSESSING OFFICER MADE ADDI TION OF ` 26.2 LAKHS WITH REGARD TO CONSTRUCTION OF BUILDING IN TH E ABOVE SAID LAND. THE ASSESSING OFFICER FOUND THAT A TWO-STORIED BUIL DING WAS 4 I.T.(SS) A. NO.80/MDS/2003 CONSTRUCTED IN THE ABOVE LAND DURING THE ASSESSMENT YEARS 1993-94 AND 1994-95. THE COST OF CONSTRUCTION, ACCORDING T O THE LD. COUNSEL, WAS ` 12 LAKHS. THE ASSESSEE HAD EXPLAINED THE SOURCE OF ` 12 LAKHS FOR CONSTRUCTION OF THE BUILDING. THE ASS ESSING OFFICER, HOWEVER, REFERRED THE MATTER TO THE VALUATION OFFIC ER TO ESTIMATE THE COST OF CONSTRUCTION. THE VALUATION OFFICER ESTIMA TED THE COST OF CONSTRUCTION AT ` 26.2 LAKHS AS AGAINST ` 12 LAKHS DISCLOSED BY THE ASSESSEE. THE ASSESSING OFFICER HAS TAKEN THE ENTI RE ` 26.2 LAKHS AS UNDISCLOSED INCOME IGNORING THE COST DECLARED BY THE ASSESSEE OF ` 12 LAKHS. 4. THE LD.COUNSEL FOR THE ASSESSEE FURTHER SUBMITTE D THAT THE ASSESSMENT PROCEEDING WAS MADE UNDER SECTION 158BD OF THE ACT. AS PER SECTION 158BB(1) OF THE ACT, THE BLOCK ASSES SMENT PROCEEDING HAS TO BE MADE ON THE MATERIAL FOUND DUR ING THE COURSE OF SEARCH OPERATION AND THE INFORMATION WHICH IS RE LATABLE TO THE MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATIO N. IN THE CASE BEFORE US, ACCORDING TO THE LD. COUNSEL, WHAT WAS F OUND BY THE REVENUE AUTHORITIES IS THE PURCHASE OF LANDED PROPE RTY AT NO.8, PERUMAL II STREET, CHENNAI-7. NO MATERIAL WAS FOUN D WITH REGARD TO CONSTRUCTION OF THE BUILDING AND NO MATERIAL WAS FO UND WITH REGARD 5 I.T.(SS) A. NO.80/MDS/2003 TO INVESTMENT MADE BY THE ASSESSEE IN THE CONSTRUCT ION OF THE PROPERTY. PLACING RELIANCE ON THE JUDGMENT OF APEX COURT IN SMT. AMIYA BALA PAUL V. CIT (2003) 262 ITR 407, THE LD.C OUNSEL SUBMITTED THAT THE ASSESSING OFFICER IS NOT COMPETE NT TO CALL FOR REPORT FROM THE VALUATION OFFICER. ACCORDING TO TH E LD. COUNSEL, ONLY FOR THE PURPOSE OF SECTION 55A OF THE ACT, THE MATT ER CAN BE REFERRED TO THE VALUATION OFFICER. SECTION 55A CANNOT BE AP PLIED WHILE MAKING ASSESSMENT UNDER SECTION 143(3) OF THE ACT. THE LD.COUNSEL FURTHER SUBMITTED THAT THE POWER OF ENQU IRY AVAILABLE TO ASSESSING OFFICER UNDER SECTION 136 AND 142(2) OF T HE ACT DOES NOT INCLUDE THE POWER TO REFER THE MATTER TO THE VALUAT ION OFFICER FOR ESTIMATING THE COST OF CONSTRUCTION. THEREFORE, IN VIEW OF THE JUDGMENT OF APEX COURT IN SMT. AMIYA BALA PAUL (SUP RA), ACCORDING TO THE LD. COUNSEL, THE REFERENCE MADE TO THE VALUA TION OFFICER IS ILLEGAL AND BEYOND THE POWER OF THE ASSESSING OFFIC ER. EVEN OTHERWISE, ACCORDING TO THE LD. COUNSEL, THE REPORT OF THE VALUATION OFFICER IS ONLY AN ESTIMATION WHICH CAME INTO EXIST ENCE AFTER COMPLETION OF SEARCH. SECTION 158BB(1) OF THE ACT CLEARLY SAYS THAT THE BLOCK ASSESSMENT HAS TO BE COMPUTED ONLY ON THE BASIS OF THE MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATIO N. THERE IS NO SCOPE FOR ESTIMATION OF INCOME IN THE BLOCK PERIOD. ACCORDING TO THE 6 I.T.(SS) A. NO.80/MDS/2003 LD. COUNSEL, UNLESS THERE IS SOME CONCRETE MATERIAL FOUND TO BE ON RECORD WITH REGARD TO INVESTMENT MADE BY THE ASSESS EE, NO ESTIMATION CAN BE MADE ON THE BASIS OF THE SO-CALLE D VALUATION SAID TO BE MADE BY THE VALUATION OFFICER. 5. ON THE CONTRARY, DR. B. NISCHAL, THE LD. DEPARTM ENTAL REPRESENTATIVE, SUBMITTED THAT DURING THE COURSE OF SEARCH OPERATION IN THE RESIDENTIAL PREMISES OF ONE SHRI P .R. GANAPATHY, SEVERAL INCRIMINATING MATERIALS WERE FOUND. ONE OF SUCH DOCUMENTS WAS WITH REGARD TO INVESTMENT MADE BY THE PRESENT A SSESSEE IN THE LANDED PROPERTY. ACCORDING TO THE LD. D.R., A SALE DEED PERTAINING TO THE PROPERTY PURCHASED BY THE ASSESSEE AT NO.8, PERUMAL II STREET, CHENNAI-7, WAS FOUND AND SEIZED. THE ASSES SEE PURCHASED THE PROPERTY IN THE YEAR 1985 FOR A CONSIDERATION O F ` 85,000/-. A FURTHER INVESTIGATION MADE BY THE ASSESSING OFFICER REVEALED THAT THE ASSESSEE HAD CONSTRUCTED A RESIDENTIAL BUILDING ON THIS LAND. THEREFORE, THE ASSESSING OFFICER ASKED THE ASSESSEE TO FURNISH THE PARTICULARS REGARDING THE CONSTRUCTION MADE IN THE ABOVE SAID LAND. THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER T HAT THE BUILDING WAS CONSTRUCTED DURING THE YEAR 1993-94 BY INVESTIN G A SUM OF ` 12 LAKHS. THE ASSESSEE HAS ALSO GIVEN THE DETAILS OF THE ABOVE SAID 7 I.T.(SS) A. NO.80/MDS/2003 ` 12 LAKHS, WHICH WAS SAID TO BE INVESTED IN THE CONS TRUCTION. HOWEVER, THE ASSESSING OFFICER FOUND THAT THE CLAIM OF THE ASSESSEE AS SOURCE OF FUND FOR CONSTRUCTION IS NOT GENUINE. ACCORDINGLY, THE MATTER WAS REFERRED TO THE VALUATI ON OFFICER FOR ESTIMATION OF COST OF CONSTRUCTION. THE VALUATION OFFICER BY HIS REPORT DATED 27.08.1993, ESTIMATED THE COST OF CONS TRUCTION AT ` 26.20 LAKHS. THEREFORE, THE ASSESSING OFFICER HAS ADOPTED THE COST OF CONSTRUCTION AT ` 26.20 LAKHS AND MADE THE ADDITION IN THE BLOCK PERIOD. REFERRING TO THE ADDITIONAL GROUND R AISED BY THE ASSESSEE, THE LD. D.R. SUBMITTED THAT THIS ISSUE WA S NOT RAISED BEFORE THE A.O. THEREFORE, IT CANNOT BE ACCEPTED A T THIS STAGE. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE ASSES SING OFFICER COMPUTED ` 26.20 LAKHS AS UNDISCLOSED INCOME IN THE BLOCK PERI OD WITH REGARD TO CONSTRUCTION OF RESIDENTIAL BUILDING AT NO.8, PERUMAL II STREET, CHENNAI-7. WE HAVE CAREFULLY GONE THROUGH THE PROVISIONS OF SECTION 158BB OF THE ACT. SECTION 158BB OF THE ACT CLEARLY SAYS THAT UNDISCLOSED INCOME FOR THE BLOCK PERIOD HAS TO BE COMPUTED ONLY ON THE BASIS OF MATERIAL FOUND DURING THE COUR SE OF SEARCH OPERATION AND INFORMATION WHICH IS RELATABLE TO THE MATERIAL FOUND 8 I.T.(SS) A. NO.80/MDS/2003 DURING THE COURSE OF SEARCH OPERATION. ADMITTEDLY, WHAT WAS FOUND DURING THE COURSE OF SEARCH OPERATION IS THE SALE D EED PERTAINING TO A PROPERTY AT NO.8, PERUMAL II STREET, CHENNAI-7. THIS PROPERTY WAS PURCHASED BY THE ASSESSEE. NO OTHER MATERIAL WAS F OUND DURING THE COURSE OF SEARCH OPERATION. WITH REGARD TO SAL E CONSIDERATION, THE ASSESSING OFFICER HAS NOT RAISED ANY DOUBT. IN FACT, THE INVESTMENT MADE BY THE ASSESSEE WITH REGARD TO ` 85,000/-, BEING THE CONSIDERATION FOR PURCHASE OF PROPERTY, IS ACCE PTED. THE ONLY DISPUTE IS NOW WITH REGARD TO COST OF CONSTRUCTION OF THE BUILDING IN THE ABOVE SAID LAND. IT IS NOT IN DISPUTE THAT NO MATERIAL WAS FOUND DURING THE COURSE OF SEARCH OPERATION. THE ASSESSI NG OFFICER CLAIMED THAT DURING THE INVESTIGATION, IT WAS REVEA LED THAT THE ASSESSEE CONSTRUCTED A HOUSE IN THE ABOVE SAID LAND . THE ASSESSEE, IN RESPONSE TO THE QUERY RAISED BY THE AS SESSING OFFICER, EXPLAINED THAT THE CONSTRUCTION WAS MADE DURING THE ASSESSMENT YEARS 1993-94 AND 1994-95 BY INVESTING A SUM OF ` 12 LAKHS. THE ASSESSEE HAS ALSO EXPLAINED THAT SHE HAD WITHDRAWN A SUM OF ` 5 LAKHS FROM THE PARTNERSHIP FIRM IN WHICH SHE WAS A PARTNER. THE ASSESSEE FURTHER EXPLAINED THAT OUT OF SAVINGS OF H ER HUSBAND SHRI S.P. KARUTHAN, WHO HAD AGRICULTURAL INCOME AS WELL AS PROFESSIONAL INCOME, BEING A TEACHER, SHE AVAILED ` 3 LAKHS. THE ASSESSEE ALSO 9 I.T.(SS) A. NO.80/MDS/2003 CLAIMED THAT A SUM OF ` 1 LAKH WAS RECEIVED AS LOAN FROM SHRI K.R. GOPALAKRISHNAN AND SHRI K.R. BALASUBRAMANIAN. A FU RTHER SUM OF ` 3 LAKHS CLAIMED TO BE SAVINGS FROM AGRICULTURAL INC OME OF HUF AND USE OF OLD MATERIALS LIKE WOOD, BRICKS, ETC. THE Q UESTION ARISES FOR CONSIDERATION IS IN THE ABSENCE OF ANY MATERIAL FOU ND DURING THE COURSE OF SEARCH OPERATION WITH REGARD TO COST OF C ONSTRUCTION, CAN ADDITION BE MADE ON THE BASIS OF THE REPORT OF THE VALUATION OFFICER? ADMITTEDLY, THE REPORT OF THE VALUATION OFFICER IS MADE ON THE ESTIMATION BASIS ON A REFERENCE MADE BY THE ASSESSI NG OFFICER SUBSEQUENT TO SEARCH. THEREFORE, THE REPORT OF THE VALUATION OFFICER CANNOT BE CONSIDERED AS MATERIAL FOUND DURING THE C OURSE OF SEARCH OPERATION. MOREOVER, THE REPORT OF THE VALUATION O FFICER IS ONLY AN ESTIMATION. BLOCK ASSESSMENT PROCEEDING HAS TO BE MADE ONLY ON THE BASIS OF THE MATERIAL FOUND DURING THE COURSE O F SEARCH OPERATION. IN OTHER WORDS, THERE SHOULD BE A CONCR ETE MATERIAL TO ESTABLISH THE INVESTMENT MADE BY THE ASSESSEE. THE RE IS NO SCOPE FOR MAKING ANY ESTIMATION IN THE BLOCK ASSESSMENT P ROCEEDINGS IN THE ABSENCE OF ANY OTHER MATERIAL. THIS TRIBUNAL I S OF THE CONSIDERED OPINION THAT IN THE ABSENCE OF ANY MATER IAL WITH REGARD TO SUPPRESSION OF COST OF CONSTRUCTION OF THE RESID ENTIAL HOUSE, NO ADDITION CAN BE MADE ONLY ON THE BASIS OF THE ESTIM ATION MADE BY 10 I.T.(SS) A. NO.80/MDS/2003 THE VALUATION OFFICER. MOREOVER, THE APEX COURT IN THE CASE OF SMT. AMIYA BALA PAUL (SUPRA) FOUND THAT THE ASSESSING OF FICER CANNOT MAKE A REFERENCE EITHER UNDER SECTION 133(6) OR 143 (2) TO THE VALUATION OFFICER. THEREFORE, THERE CANNOT BE ANY JUSTIFICATION ON THE VALUATION MADE BY THE ASSESSING OFFICER DURING THE BLOCK ASSESSMENT. IN VIEW OF THE ABOVE, WE ARE UNABLE TO UPHOLD THE ORDER OF THE ASSESSING OFFICER. ACCORDINGLY, THE O RDER OF THE ASSESSING OFFICER IS SET ASIDE AND THE ADDITION OF ` 26.20 LAKHS IS DELETED. 7. THE NEXT GROUND OF APPEAL IS WITH REGARD TO INVE STMENT MADE IN THE HOUSE PROPERTY AT 14, HANUMANTHA ROAD, BALAJ I NAGAR, CHENNAI-14. 8. SH. N. DEVANATHAN, THE LD.COUNSEL FOR THE ASSESS EE, SUBMITTED THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH OPERATION WITH REGARD TO COST OF C ONSTRUCTION OF THE HOUSE PROPERTY AT 14, HANUMANTHA ROAD, BALAJI NAGAR , CHENNAI-14. DURING THE COURSE OF SEARCH OPERATION, THE ASSESSIN G OFFICER CALLED FOR DETAILS. THE ASSESSEE CLAIMED BEFORE THE ASSES SING OFFICER THAT THE PROPERTY WAS PURCHASED FOR ` 19 LAKHS. THE TOTAL INVESTMENT IN THE PROPERTY, INCLUDING THE STAMP DUTY AND REGISTRA TION CHARGES, WAS 11 I.T.(SS) A. NO.80/MDS/2003 ` 21,70,000/-. THE ASSESSEE GAVE PARTICULARS OF SOUR CE OF INVESTMENT. THE LD.COUNSEL FURTHER SUBMITTED THAT THE ASSESSEE PURCHASED THE PROPERTY BY MEANS OF TWO DOCUMENTS DA TED 28.5.92 AND 9.9.92. THE SALE CONSIDERATION AS PER THE DOCU MENT WAS ` 9.5 LAKHS ONLY. DURING THE COURSE OF EXAMINATION, THE VENDOR OF THE PROPERTY ADMITTED THAT THEY RECEIVED A SUM OF ` 12 LAKHS FROM THE ASSESSEE AS SALE CONSIDERATION. HE HAS ADMITTED AN OTHER SUM OF ` 12 LAKHS ON 9.9.92. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE EXPLAINED THAT WHAT WAS FOUND DURING THE COURSE OF SEARCH OPERATION WAS ONLY AN AGREEMENT FOR SALE. NOWHERE IN THE STATEMENT RECORDED FROM THE VENDOR ACCEPTED THAT TH EY HAVE RECEIVED ANY AMOUNT OVER AND ABOVE THE SALE CONSIDE RATION DISCLOSED IN THE SALE DEED. HOWEVER, THE ASSESSING OFFICER FOUND THAT A SUM OF ` 7,50,000/- WAS PAID TO THE VENDOR ON 30.5.1992 AND ANOTHER SUM OF ` 2.5 LAKHS ON 11.9.92. THE ASSESSING OFFICER IGNORING THE CLAIM OF THE ASSESSEE, HAS TAKEN THE P URCHASE PRICE AT ` 24 LAKHS. INCLUDING THE STAMP DUTY AND REGISTRATIO N CHARGES, THE ASSESSING OFFICER HAS TAKEN THE SALE CONSIDERATION AT ` 26.70 LAKHS. ULTIMATELY, BY ACCEPTING THE CLAIM OF THE ASSESSEE TO THE EXTENT OF ` 2.5 LAKHS BEING WITHDRAWN FROM THE FIRM M/S K.R. DE VAKIAMMAL AND SALE OF JEWELLERY TO THE EXTENT OF ` 2,91,000/-, THE ASSESSING 12 I.T.(SS) A. NO.80/MDS/2003 OFFICER COMPUTED THE UNDISCLOSED INCOME AT ` 21,29,000/- FOR THE ASSESSMENT YEAR 1993-94. THE ASSESSING OFFICER HAS ALSO COMPUTED A SUM OF ` 5,26,500/- BEING THE COST OF IMPROVEMENT TO HAVE BEEN MADE TO THE PROPERTY ON THE BASIS OF THE REPORT OF THE VALUATION OFFICER. ACCORDING TO THE LD. COUNSEL, N O MATERIAL WAS FOUND DURING THE COURSE OF SEARCH OPERATION WITH RE GARD TO INVESTMENT OF ` 26,70,000/-. MOREOVER, NO MATERIAL WAS AVAILABLE O N RECORD TOWARDS INVESTMENT OF ` 5,26,500/- BEING THE COST OF IMPROVEMENT AS CLAIMED BY THE ASSESSING OFFICER. IN THE ABSENCE OF MATERIAL FOUND DURING THE COURSE OF SEARCH OPERA TION, ACCORDING TO THE LD. COUNSEL, THERE CANNOT BE ANY ADDITION IN THE BLOCK ASSESSMENT. 9. ON THE CONTRARY, DR. B. NISCHAL, THE LD. D.R. SU BMITTED THAT THE REVENUE FOUND THE PURCHASE OF PROPERTY AT 14, H ANUMANTHA ROAD, BALAJI NAGAR, CHENNAI-14. THE ASSESSING OFFI CER FOUND THAT THE ASSESSEE HAS PAID A SUM OF ` 24 LAKHS TOWARDS PURCHASE OF PROPERTY AND ANOTHER SUM OF ` 2,70,000/- WAS INCURRED TOWARDS STAMP DUTY AND REGISTRATION CHARGES. THE ASSESSING OFFICER MAINLY PLACING RELIANCE ON THE STATEMENT RECORDED FROM ONE SHRI P.S. RANGAN, THE VENDOR OF THE PROPERTY, FOUND THAT THE TOTAL 13 I.T.(SS) A. NO.80/MDS/2003 CONSIDERATION WAS ` 26,70,000/-. AFTER CONSIDERING THE CLAIM OF THE ASSESSEE TO THE EXTENT OF ` 2,91,000/- TOWARDS THE SALE PROCEEDS OF GOLD JEWELLERY AND WITHDRAWAL OF FUNDS FROM PARTNER SHIP FIRM TO THE EXTENT OF ` 2,50,000/-, THE BALANCE AMOUNT OF ` 21,29,000/- WAS TREATED AS UNDISCLOSED INCOME FOR THE BLOCK PERIOD. SIMILARLY, THE ASSESSEE ALSO INVESTED FUNDS IN IMPROVEMENT OF THE PROPERTY. THE MATTER WAS REFERRED TO THE VALUATION OFFICER. THE VALUATION OFFICER ESTIMATED THE COST OF IMPROVEMENT AT ` 5,26,500/-. THE SAME WAS TAKEN AS UNDISCLOSED INCOME FOR THE BLOCK PERIOD. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE REVEN UE AUTHORITIES FOUND THAT THE ASSESSEE HAS PURCHASED A HOUSE PROPE RTY AT 14, HANUMANTHA ROAD, BALAJI NAGAR, CHENNAI-14. FROM TH E ORDER OF THE ASSESSING OFFICER, IT IS NOT KNOWN HOW THE DEPA RTMENT CAME TO KNOW ABOUT THE PURCHASE OF PROPERTY AT 14, HANUMANT HA ROAD, BALAJI NAGAR, CHENNAI-14. SECTION 158BB(1) OF THE ACT CLEARLY SAYS THAT THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD HA S TO BE COMPUTED ONLY ON THE BASIS OF MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION AND INFORMATION WHICH IS RELATABLE TO THE MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION. ON GO ING THROUGH THE 14 I.T.(SS) A. NO.80/MDS/2003 ASSESSMENT ORDER AND THE OTHER RELEVANT MATERIAL AV AILABLE ON RECORD, IT APPEARS NO MATERIAL WAS FOUND WITH REGAR D TO PURCHASE OF PROPERTY AT 14, HANUMANTHA ROAD, BALAJI NAGAR, CHEN NAI-14. THE ENTIRE INFORMATION APPEARS TO BE FURNISHED BY THE A SSESSEE ON THE QUERY RAISED BY THE ASSESSING OFFICER. THE ASSESSI NG OFFICER REJECTED THE SOURCE OF INVESTMENT CLAIMED BY THE AS SESSEE AND ULTIMATELY, ON THE BASIS OF THE STATEMENT SAID TO B E RECORDED FROM SHRI P.S. RANGAN, FOUND THAT COST OF CONSTRUCTION W AS ` 24 LAKHS. AFTER CONSIDERING THE STAMP DUTY AND REGISTRATION C HARGES, THE ASSESSING OFFICER CAME TO A CONCLUSION THAT THE TOT AL INVESTMENT IN THE PROPERTY WAS ` 26,70,000/-. OTHER THAN THE STATEMENT RECORDED FROM SAID SHRI P.S. RANGAN, NO OTHER MATERIAL IS AV AILABLE ON RECORD. AS OBSERVED EARLIER, SECTION 158BB(1) OF THE ACT CL EARLY SAYS THAT THE UNDISCLOSED INCOME HAS TO BE COMPUTED ONLY ON T HE BASIS OF THE MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATIO N AND INFORMATION RELATABLE TO THE MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION. IN THIS CASE, NO MATERIAL WAS FO UND DURING THE COURSE OF SEARCH OPERATION EITHER WITH REGARD TO PU RCHASE OF PROPERTY AT 14, HANUMANTHA ROAD, BALAJI NAGAR, CHEN NAI-14 OR WITH REGARD TO IMPROVEMENT SAID TO BE MADE BY THE ASSESS EE TO THE EXTENT OF ` 5,26,500/-. ALL THE MATERIALS WERE FURNISHED BY TH E 15 I.T.(SS) A. NO.80/MDS/2003 ASSESSEE ON THE BASIS OF THE ENQUIRY RAISED BY THE ASSESSING OFFICER DURING ASSESSMENT PROCEEDINGS. THIS TRIBUN AL IS OF THE CONSIDERED OPINION THAT BLOCK ASSESSMENT HAS TO BE MADE ONLY ON THE BASIS OF THE METHOD PRESCRIBED BY THE PARLIAMEN T. THE PARLIAMENT HAS PRESCRIBED A SPECIFIC METHOD UNDER S ECTION 158BB(1) OF THE ACT. THEREFORE, THE ASSESSING OFFI CER CANNOT TRAVEL BEYOND THE POWER CONFERRED ON HIM UNDER SECTION 158 BB(1) OF THE ACT. IN THE ABSENCE OF ANY MATERIAL FOUND DURING T HE COURSE OF SEARCH OPERATION, THIS TRIBUNAL IS OF THE CONSIDERE D OPINION THAT THE ASSESSMENT MADE BY THE ASSESSING OFFICER ON THE BAS IS OF THE STATEMENT SAID TO BE RECORDED FROM SHRI P.S. RANGAN CANNOT STAND IN THE EYE OF LAW. IN VIEW OF THE ABOVE, WE ARE UN ABLE TO UPHOLD THE ORDER OF THE ASSESSING OFFICER ON THIS ISSUE. 11. NOW COMING TO THE IMPROVEMENT SAID TO BE MADE T O THE PROPERTY, THE ASSESSING OFFICER MADE THE ADDITION O NLY ON THE BASIS OF VALUATION REPORT. AS ALREADY DISCUSSED, THE VAL UATION REPORT CAME ONLY AFTER THE SEARCH AND IT WAS MADE ON THE ESTIMA TION BASIS. BLOCK ASSESSMENT HAS TO BE MADE ONLY ON THE BASIS O F CONCRETE MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATIO N. IN THE ABSENCE OF ANY MATERIAL, THIS TRIBUNAL IS OF THE CO NSIDERED OPINION 16 I.T.(SS) A. NO.80/MDS/2003 THAT THERE CANNOT BE ANY ADDITION ON THE BASIS OF T HE REPORT OF THE VALUATION OFFICER. THEREFORE, WE ARE UNABLE TO UPH OLD THE ORDER OF THE ASSESSING OFFICER WITH REGARD TO ADDITION OF ` 5,26,500/- BEING THE IMPROVEMENT SAID TO BE MADE BY THE ASSESSEE. A CCORDINGLY, THE ORDER OF THE LOWER AUTHORITY IS SET ASIDE AND T HE ADDITIONS OF ` 21,29,000/- BEING THE CONSIDERATION FOR PURCHASE OF PROPERTY AND ` 5,26,500/- BEING THE COST OF IMPROVEMENT ARE DELETE D. 12. THE NEXT ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO INVESTMENT IN JEWELLERY. 13. SH. N. DEVANATHAN, THE LD.COUNSEL FOR THE ASSES SEE, SUBMITTED THAT THE ASSESSING OFFICER CLAIMED THAT T WO BILLS INDICATING SALE OF GOLD JEWELLERY BY THE ASSESSEE TO M/S HARIH ANT JEWELLERS TO THE EXTENT OF ` 1,58,850/- AND ` 1,32,187/- WERE FOUND IN THE RESIDENTIAL PREMISES OF SHRI P.R. GANAPATHY. THE A SSESSEE CLAIMED THAT THE ABOVE AMOUNT WAS USED FOR ACQUISIT ION OF PROPERTY AT NO.14, HANUMANTHA ROAD, BALAJI NAGAR, CHENNAI-14 . HOWEVER, THE ASSESSING OFFICER FOUND THAT THE INVESTMENT IN JEWELLERY REMAINS UNEXPLAINED. ACCORDING TO THE LD. COUNSEL, WHAT WA S FOUND DURING THE COURSE OF SEARCH OPERATION WAS SALE BILL AND NO T PURCHASE BILL. THEREFORE, THE ASSESSING OFFICER CANNOT ASK THE ASS ESSEE TO EXPLAIN 17 I.T.(SS) A. NO.80/MDS/2003 THE INVESTMENT MADE IN GOLD JEWELLERY. ACCORDING T O THE LD. COUNSEL, UNDER SECTION 158BB(1) OF THE ACT, THE ASS ESSING OFFICER CANNOT GO BEYOND THE MATERIAL FOUND DURING THE COUR SE OF SEARCH OPERATION. THEREFORE, THE ADDITION MADE BY THE ASS ESSING OFFICER TO THE EXTENT OF ` 2,91,000/- HAS TO BE DELETED. 14. ON THE CONTRARY, DR. B. NISCHAL, THE LD. D.R. S UBMITTED THAT THE ASSESSING OFFICER FOUND THE SALE BILL DATED 27. 4.1992 FOR SALE OF GOLD JEWELLERY TO M/S HARIHANT JEWELLERS FOR A SUM OF ` 1,58,850/- AND ` 1,32,187/-. THE LD. D.R. SUBMITTED THAT ONCE THE J EWELLERY WAS SOLD, IT IS FOR THE ASSESSEE TO EXPLAIN THE INV ESTMENT MADE IN THE JEWELLERY. IN THE ABSENCE OF EXPLANATION TOWAR DS THE SOURCE OF MAKING INVESTMENT IN GOLD JEWELLERY, ACCORDING TO T HE LD. D.R., THE ASSESSING OFFICER HAS RIGHTLY TREATED THE SAME AS U NDISCLOSED INCOME IN THE BLOCK PERIOD. 15. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. AS RIGHTL Y SUBMITTED BY THE LD.COUNSEL FOR THE ASSESSEE, THE UNDISCLOSED INCOME FOR BLOCK PERIOD HAS TO BE COMPUTED UNDER SECTION 158BB OF TH E ACT. SECTION 158BB(1) CLEARLY SAYS THAT THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD HAS TO BE COMPUTED ONLY ON THE BASIS O F THE MATERIAL 18 I.T.(SS) A. NO.80/MDS/2003 FOUND DURING THE COURSE OF SEARCH OPERATION. IN TH IS CASE, WHAT WAS FOUND DURING THE COURSE OF SEARCH OPERATION WAS TWO SALE BILLS OF GOLD JEWELLERY. THEREFORE, AS RIGHTLY SUBMITTED BY THE LD.COUNSEL FOR THE ASSESSEE, THE ASSESSING OFFICER CANNOT TRAV EL BEYOND THE LANGUAGE OF SECTION 158BB(1) OF THE ACT. IN OTHER WORDS, THE ASSESSING OFFICER CANNOT CALL FOR DETAILS WITH REGA RD TO INVESTMENT MADE BY THE ASSESSEE IN GOLD JEWELLERY. NO MATERIA L WAS FOUND WITH REGARD TO INVESTMENT MADE IN GOLD JEWELLERY DU RING THE COURSE OF SEARCH OPERATION. THEREFORE, THE ASSESSING OFFI CER IS NOT JUSTIFIED IN MAKING ANY ADDITION WITH REGARD TO INVESTMENT MA DE IN GOLD JEWELLERY. IN VIEW OF THE ABOVE, THIS TRIBUNAL IS UNABLE TO UPHOLD THE ORDER OF THE ASSESSING OFFICER. ACCORDINGLY, THE O RDER OF THE ASSESSING OFFICER IS SET ASIDE AND THE ADDITIONS OF ` 1,58,850/- AND ` 1,32,187/- ARE DELETED. 16. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADD ITION OF ` 1,26,000/-, BEING THE RENT SAID TO BE RECEIVED FROM THE PROPERTY AT NO.14, HANUMANTHA ROAD, BALAJI NAGAR, CHENNAI-14. 17. SH. N. DEVANATHAN, THE LD.COUNSEL FOR THE ASSES SEE, SUBMITTED THAT THE ASSESSING OFFICER MADE AN ADDITI ON OF ` 18,000/- FOR THE ASSESSMENT YEAR 1993-94 AND ` 36,000/- EACH FOR THE 19 I.T.(SS) A. NO.80/MDS/2003 ASSESSMENT YEARS 1994-95, 1995-96 AND 1996-97. ACC ORDING TO THE LD. COUNSEL, A LETTER WAS SAID TO BE RECEIVED BY TH E ASSESSING OFFICER THAT NO RENT WAS PAID TO THE ASSESSEE. THE LD.COUNSEL FURTHER SUBMITTED THAT ON THE BASIS OF THE REPORT O F THE INSPECTOR, THE ASSESSING OFFICER MADE AN ADDITION OF ` 1,26,000/-. THE ASSESSEE HAS FILED A LETTER FROM THE TENANT SAYING THAT NO R ENT WAS PAID. THE ASSESSING OFFICER REJECTED THE LETTER ON THE GROUND THAT THESE ARE ALL AFTERTHOUGHT. ACCORDING TO THE LD. COUNSEL, IN FAC T, NO RENT WAS RECEIVED, THEREFORE, THE ADDITION MADE BY THE ASSES SING OFFICER WAS NOT JUSTIFIED. 18. ON THE CONTRARY, DR. B. NISCHAL, THE LD. DEPART MENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE FILED A LETTER BEFORE THE ASSESSING OFFICER FROM ONE SHRI R. THIRUSELVAM STAT ING THAT HE WAS STAYING AT NO.14, HANUMANTHA ROAD, BALAJI NAGAR, CH ENNAI-14 DURING THE PERIOD 1993 TO 1995. THIS LETTER WAS NO T ACCEPTED BY THE ASSESSING OFFICER. THE INSPECTOR OF INCOME TAX BY HIS REPORT DATED 16.7.1997 HAS STATED THAT SHE MET ONE MRS. PANCHALI , WIFE OF SHRI S. RAMACHANDRAN, WHO IS STAYING ON THE FIRST FLOOR AS TENANT. THE SAID MRS. PANCHALI TOLD THE INSPECTOR THAT HER HUSBAND S HRI RAMACHANDRAN WAS WORKING AS A PROFESSOR IN CPT, TAR AMANI AND 20 I.T.(SS) A. NO.80/MDS/2003 HE WAS PAYING A SUM OF ` 3000/- PER MONTH AND AN ADVANCE OF ` 10,000/- WAS PAID. SUBSEQUENTLY, A LETTER WAS FILED FROM SHRI THIRUSELVAM, SON OF SMT. PANCHALI AND SHRI S. RAMAC HANDRAN SAYING THAT HE WAS NOT PAYING ANY RENT. THEREFORE, THE ASSESSING OFFICER REJECTED THE CLAIM OF THE ASSESSEE THAT NO RENT WAS RECEIVED BY THE ASSESSEE IS AN AFTERTHOUGHT. 19. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS A B LOCK ASSESSMENT PROCEEDING. THEREFORE, THE ASSESSING OFFICER HAS T O COMPUTE THE UNDISCLOSED INCOME UNDER SECTION 158BB OF THE ACT. ADMITTEDLY, NO MATERIAL WAS FOUND DURING THE COURSE OF SEARCH OPER ATION WITH REGARD TO RECEIPT OF RENT. THE ASSESSEE, IN THE CO URSE OF ASSESSMENT PROCEEDINGS, FILED A LETTER FROM SHRI R. THIRUSELVAM STATING THAT NO RENT WAS PAID. THE INSPECTOR EXAMI NED ONE SMT. PANCHALI, WIFE OF SHRI S. RAMACHANDRAN. ON THE BAS IS OF THE SAID EXAMINATION, THE ADDITION WAS MADE. THE FACT REMAI NS THAT NO MATERIAL WAS FOUND DURING THE COURSE OF SEARCH OPER ATION, THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT IN VIEW OF THE SPECIFIC LANGUAGE IN SECTION 158BB(1) OF THE ACT, NO ADDITIO N CAN BE MADE 21 I.T.(SS) A. NO.80/MDS/2003 IN THE BLOCK ASSESSMENT PROCEEDINGS. ACCORDINGLY, THE ADDITION OF ` 1,26,000/- MADE BY THE ASSESSING OFFICER IS DELETED . 20. THE NEXT GROUND OF APPEAL IS WITH REGARD TO INV ESTMENT MADE IN M/S SRI THIRUVETTAI IYYANAR SPINNERS (P) LTD., M ADURAI AND IN M/S TALEN PAPER & BOARDS LTD. 21. SH. N. DEVANATHAN, THE LD.COUNSEL FOR THE ASSES SEE, SUBMITTED THAT THE ASSESSING OFFICER MADE AN ADDITI ON OF ` 15 LAKHS AS UNDISCLOSED INCOME. BY DISBELIEVING THE SOURCE, THE ASSESSING OFFICER REJECTED THE GIFT RECEIVED BY THE ASSESSEE FROM HER SON-IN- LAW SHRI SINNIAH BOSE. ACCORDING TO THE LD. COUNSE L, THE ASSESSEE RECEIVED A SUM OF ` 15 LAKHS FROM HER SON-IN-LAW SHRI SINNIAH BOSE. THE ASSESSEE HAS INVESTED THE FUNDS IN SRI THIRUVET TAI IYYANAR SPINNERS (P) LTD., MADURAI AND IN TALEN PAPER & BOA RDS LTD. THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSES SEE AND FOUND THAT SHRI SINNIAH BOSE WAS WORKING AS CHEMICAL ENGI NEER IN A MULTINATIONAL COMPANY IN DUBAI FOR THE LAST FIVE YE ARS. AN ATTEMPT WAS MADE TO PROVE THE SOURCE OF SHRI SINNIAH BOSE. HOWEVER, THE ASSESSING OFFICER REJECTED THE CLAIM OF THE ASSESSE E ON THE GROUND THAT THIS CLAIM IS AFTERTHOUGHT. ACCORDING TO THE LD. COUNSEL, IN THE 22 I.T.(SS) A. NO.80/MDS/2003 ABSENCE OF ANY MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION, THERE CANNOT BE ANY ADDITION. 22. ON THE CONTRARY, DR. B. NISCHAL, THE LD. D.R., SUBMITTED THAT THE ASSESSEE CLAIMED THAT SHE RECEIVED A SUM OF ` 15 LAKHS AS GIFT FROM HER SON-IN-LAW SHRI SINNIAH BOSE. THE ENTIRE ADDITION WAS MADE ON THE BASIS OF THE MATERIAL AVAILABLE ON RECO RD. THE ASSESSING OFFICER MADE THOROUGH ENQUIRY AND FOUND T HAT THE SAID SHRI SINNIAH BOSE HAS GIVEN SEVERAL GIFTS DURING TH E RELEVANT PERIOD. THEREFORE, THE ASSESSING OFFICER FOUND THAT THE ASS ESSEE HAS NOT ESTABLISHED THE CAPACITY OF THE CREDITOR TO GIVE SU CH A GIFT TO HER. 23. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE ASSES SEE EXPLAINED BY HER LETTER THAT SHE MADE INVESTMENT FROM THE GIF T RECEIVED FROM HER SON-IN-LAW SHRI SINNIAH BOSE. NO OTHER MATERIA L WAS AVAILABLE ON RECORD TO SUGGEST THAT THE REVENUE AUTHORITIES U NEARTHED ANY MATERIAL WITH REGARD TO EITHER THE INVESTMENT OR RE CEIPT OF GIFT. THE ASSESSMENT ORDER HAS NOT SPELT OUT ANYTHING ABOUT T HE MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION. THE A SSESSEE CLAIMED THAT A SUM OF ` 15 LAKHS WAS RECEIVED FROM HER SON-IN-LAW SHRI SINNIAH BOSE AND THE SAME WAS DEPOSITED IN HER BANK ACCOUNT. 23 I.T.(SS) A. NO.80/MDS/2003 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS FOUND THAT THE SAID SHRI SINNIAH BOSE GAVE SEVERAL GIFTS TO SEVERA L PERSONS DURING THE RELEVANT PERIOD. THEREFORE, HE HAS NO CAPACITY TO MAKE SUCH GIFT TO VARIOUS PERSONS. IT IS NECESSARY TO MAKE ASSESS MENT OUT OF MATERIAL FOUND IN THE BLOCK ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER WAS EXPECTED TO COMPUTE UNDISCLOS ED INCOME UNDER SECTION 158BB OF THE ACT AND SECTION 158BB(1) OF THE ACT CLEARLY SAYS THAT THE UNDISCLOSED INCOME HAS TO BE COMPUTED ONLY ON THE BASIS OF THE MATERIAL FOUND DURING THE COURS E OF SEARCH OPERATION. THEREFORE, THE MATERIAL AVAILABLE ON RE CORD WHICH CAME TO THE POSSESSION OF REVENUE SUBSEQUENT TO SEARCH P ROCEEDINGS, CANNOT BE A REASON TO MAKE ADDITION IN THE BLOCK AS SESSMENT PROCEEDINGS. IT IS OPEN TO THE ASSESSING OFFICER T O MAKE ADDITION IN THE REGULAR ASSESSMENT PROVIDED TIME LIMIT IS AVAIL ABLE. IN FACT, UNDER SECTION 158BB OF THE ACT, THE ASSESSING OFFIC ER SHOULD NECESSARILY CONFINE HIMSELF TO THE MATERIAL FOUND I N SEARCH OPERATION. IN THE ABSENCE OF ANY MATERIAL WITH REG ARD TO INVESTMENT IN THE ABOVE TWO COMPANIES OR WITH REGARD TO RECEIP T OF GIFT FROM SHRI SINNIAH BOSE, THIS TRIBUNAL IS OF THE CONSIDER ED OPINION THAT MAKING ANY ADDITION IN THE BLOCK PERIOD IS NOT CALL ED FOR. IN VIEW OF 24 I.T.(SS) A. NO.80/MDS/2003 THE ABOVE, THE ORDER OF THE LOWER AUTHORITY IS SET ASIDE AND THE ADDITION OF ` 15 LAKHS IS DELETED. 24. NOW COMING TO THE ADDITION OF ` 4,70,384/- WITH REGARD TO CREDIT FOUND IN THE BANK ACCOUNT. 25. SH. N. DEVANATHAN, THE LD.COUNSEL FOR THE ASSES SEE, SUBMITTED THAT THE ASSESSING OFFICER MADE ADDITION OF ` 4,70,384/- AS UNDISCLOSED INCOME FOR THE BLOCK PERIOD 1993-94 TO 1996-97. THE ASSESSEE EXPLAINED BEFORE THE ASSESSING OFFICER THAT A LOAN WAS RECEIVED FROM VARIOUS PARTIES INCLUDING HER SON -IN-LAW SHRI SINNIAH BOSE AND CREDITED TO THE BANK ACCOUNT OF TH E ASSESSEE. THE INVESTMENT IN SRI THIRUVETTAI IYYANAR SPINNERS (P) LTD., MADURAI AND THE PURCHASE OF PROPERTY AT NO.14, HANUMANTHA R OAD, BALAJI NAGAR, CHENNAI-14, WAS MADE OUT OF THESE DEPOSITS. THE ASSESSING OFFICER BY EXAMINING THE BANK ACCOUNT DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS, MADE AN ADDITION OF ` 4,70,384/-. SINCE NO MATERIAL WAS FOUND DURING THE COURSE OF SEARCH O PERATION, ACCORDING TO THE LD. COUNSEL, THE ADDITION OF ` 4,70,384/- IS NOT JUSTIFIED. 25 I.T.(SS) A. NO.80/MDS/2003 26. ON THE CONTRARY, DR. B. NISCHAL, THE LD. D.R., SUBMITTED THAT THE ASSESSING OFFICER FOUND CREDIT IN THE BANK ACCO UNT MAINTAINED BY THE ASSESSEE WITH BANK OF MADURA, PURASAWAKKAM B RANCH. THE ASSESSEE COULD NOT EXPLAIN THE SOURCE FOR MAKING TH E DEPOSIT. THEREFORE, AFTER CONSIDERING THE AMOUNT OF ` 26 LAKHS INVESTED BY THE ASSESSEE, THE BALANCE AMOUNT OF ` 4,70,384/- WAS TREATED AS INVESTMENT MADE OUT OF UNDISCLOSED INCOME OF THE AS SESSEE FOR THE ASSESSMENT YEARS 1993-94 TO 1996-97. 27. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS NOT THE CASE OF THE REVENUE THAT THE BANK ACCOUNT WAS FOUND DURING THE COURSE OF SEARCH OPERATION. THE BANK ACCOUNT WAS FOUND DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS. THEREFORE, THIS TRIBUNAL I S OF THE CONSIDERED OPINION THAT UNLESS THERE IS SOME MATERI AL FOUND DURING THE COURSE OF SEARCH OPERATION, THERE CANNOT BE AN UNDISCLOSED INCOME IN THE BLOCK ASSESSMENT. THE MATERIAL FOUND DURING THE COURSE OF ASSESSMENT PROCEEDINGS MAY BE A BETTER EV IDENCE FOR MAKING REGULAR ASSESSMENT UNDER SECTION 143(3) OF T HE ACT IN THE REGULAR COURSE. HOWEVER, NO ADDITION CAN BE MADE U NDER SECTION 158BB OF THE ACT IN THE BLOCK PERIOD. IN THE ABSEN CE OF ANY MATERIAL 26 I.T.(SS) A. NO.80/MDS/2003 FOUND DURING THE COURSE OF SEARCH OPERATION, THIS T RIBUNAL IS OF THE CONSIDERED OPINION THAT MAKING ADDITION OF ` 4,70,384/- ON THE BASIS OF THE BANK ACCOUNT MAINTAINED BY THE ASSESSEE WITH BANK OF MADURA, PURASAWAKKAM BRANCH, IS NOT JUSTIFIED. ACC ORDINGLY, THE ORDER OF THE ASSESSING OFFICER IS SET ASIDE AND THE ADDITION OF ` 4,70,384/- IS DELETED. 28. THE NEXT GROUND OF APPEAL IS WITH REGARD TO HOU SE HOLD EXPENSES. 29. SH. N. DEVANATHAN, THE LD.COUNSEL FOR THE ASSES SEE, SUBMITTED THAT THE ASSESSING OFFICER MADE AN ADDITI ON OF ` 6,70,960/-, BEING THE HOUSE HOLD EXPENSES. ACCORDI NG TO THE LD. COUNSEL, NO MATERIAL WAS FOUND DURING THE COURSE OF SEARCH OPERATION, THEREFORE, NO ADDITION CAN BE MADE. 30. ON THE CONTRARY, DR. B. NISCHAL, THE LD. D.R., SUBMITTED THAT NO DETAILS REGARDING HOUSE HOLD EXPENSES WERE FILED BY THE ASSESSEE ALONG WITH RETURN OF INCOME FOR THE BLOCK PERIOD. THEREFORE, THE ASSESSING OFFICER ESTIMATED THE HOUS E HOLD EXPENSES FOR THE BLOCK PERIOD AS ` 6,70,960/-. 27 I.T.(SS) A. NO.80/MDS/2003 31. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS A B LOCK ASSESSMENT. THEREFORE, THE ASSESSING OFFICER HAS TO CONFINE HIM SELF ONLY TO THE MATERIAL, IF ANY FOUND, DURING THE COURSE OF SEARCH OPERATION IN VIEW OF THE SPECIFIC LANGUAGE USED IN SECTION 158BB OF T HE ACT. ADMITTEDLY, NO MATERIAL WAS FOUND DURING THE COURSE OF SEARCH OPERATION WITH REGARD TO HOUSE HOLD EXPENSES. THER EFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THERE CA NNOT BE ANY ADDITION IN THE BLOCK PERIOD. IF AT ALL ANY ADDITI ON HAS TO BE MADE, IT HAS TO BE MADE ONLY IN THE REGULAR ASSESSMENT. THI S TRIBUNAL IS OF THE CONSIDERED OPINION THAT IN THE ABSENCE OF MATER IAL FOUND DURING THE COURSE OF SEARCH OPERATION, THERE CANNOT BE ANY ADDITION IN THE BLOCK PERIOD. ACCORDINGLY, THE ORDER OF THE LOWER AUTHORITY IS SET ASIDE AND THE ADDITION OF ` 6,70,960/- IS DELETED. 32. THE LAST GROUND OF APPEAL IS WITH REGARD TO ADD ITION OF ` 50,000/- TOWARDS FOREIGN TOUR. 33. SH. N. DEVANATHAN, THE LD.COUNSEL FOR THE ASSES SEE, SUBMITTED THAT THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS UNDERTAKEN FOREIGN TOUR TO DUBAI IN JULY, 1992 AND FOREIGN CURRENCY FOR ` 6472/- WAS PURCHASED BY THE ASSESSEE. THE ASSESSIN G OFFICER 28 I.T.(SS) A. NO.80/MDS/2003 FOUND THAT THE MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION AT THE RESIDENTIAL PREMISES OF SHRI P.R. GANAPATHY REVEALED THE TOUR UNDERTAKEN BY THE ASSESSEE TO DUBAI. THE ASSESSEE EXPLAINED BEFORE THE ASSESSING OFFICER THAT THE PASSPORT WAS OBTAINED FIRST TIME IN 24.12.1999 ONLY. THEREFORE, SHE COULD NOT HAVE TRAVELLED IN THE YEAR 1992. HOWEVER, THE ASSESSING OFFICER DISA LLOWED THE CLAIM OF THE ASSESSEE. 33. WE HAVE HEARD DR. B. NISCHAL, THE LD. DEPARTMEN TAL REPRESENTATIVE ALSO. 34. IT IS NOT IN DISPUTE THAT THE ASSESSEE OBTAINED PASSPORT FIRST TIME ON 24.12.1999. FOR TRAVELLING TO DUBAI, A PASS PORT IS REQUIRED BESIDES VISA FROM UAE. SINCE THE PASSPORT ITSELF W AS OBTAINED FIRST TIME IN DECEMBER, 1999, THE ASSESSEE COULD NOT HAVE TRAVELLED TO DUBAI IN JULY, 1992. THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSEE TRAVELLED T O DUBAI IN JULY, 1992 IS NOT JUSTIFIED. ACCORDINGLY, THE ORDER OF T HE ASSESSING OFFICER IS SET ASIDE AND THE ADDITION OF ` 50,000/- IS DELETED. 35. SINCE THE ADDITIONS MADE BY THE ASSESSING OFFIC ER ARE DELETED ON MERIT, IT MAY NOT BE NECESSARY FOR THIS TRIBUNAL TO 29 I.T.(SS) A. NO.80/MDS/2003 ADJUDICATE THE ADDITIONAL GROUND RAISED BY THE ASSE SSEE WITH REGARD TO FAILURE OF THE ASSESSING OFFICER TO RECORD SATIS FACTION AS REQUIRED UNDER SECTION 158 BD OF THE ACT. 36. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED ON 15 TH OCTOBER, 2015 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 15 TH OCTOBER, 2015. KRI. - +056 7620 /COPY TO: 1. () /APPELLANT 2. +,() /RESPONDENT 3. / 80 /CIT, CENTRAL-II, CHENNAI-34 5. 69 +0 /DR 6. :; < /GF.