Aqua Granites, CHENNAI V. ACIT, CHENNAI

ITSSA 9/CHNY/2015

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 1482 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 3 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 14-01-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 24-11-2015
• Assessment Year: misc
• Appeal Filed On: 10-04-2015
• Court: TRIBUNAL
• Department Lawyers: A B KOLI
• Keywords: Rejection of books of accounts; Block assessment

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.9/MDS/2015 BLOCK PERIOD : 01.04.1985 TO 19.01.1996 M/S AQUA GRANITES, C/O SMT. KUMARI KANAGAM, G-1, SAKTHI TOWERS, 57/1, 8 TH CROSS EAST STREET, SHENOY NAGAR, CHENNAI - 600 030. PAN : AAFFA 6564 L V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE II(4), CHENNAI - 600 034. (()/ APPELLANT) (+,()/ RESPONDENT) () - . / APPELLANT BY : SH. PHILIP GEORGE, ADVOCATE +,() - . / RESPONDENT BY : SH. A.B. KOLI, JCIT / - 0% / DATE OF HEARING : 24.11.2015 1'2 - 0% / DATE OF PRONOUNCEMENT : 14.01.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) 19, CHEN NAI, DATED 30.12.2014 AND PERTAINS TO BLOCK ASSESSMENT PERIOD FROM 1986-87 TO 1996-97. 2 I.T.(SS) A. NO.9/MDS/15 2. SH. PHILIP GEORGE, THE LD.COUNSEL FOR THE ASSESS EE, SUBMITTED THAT THERE WAS A SEARCH IN THE RESIDENTIA L PREMISES OF ONE SMT. KUMARI KANAGAM, PARTNER OF THE ASSESSEE-FIRM. THE ASSESSING OFFICER INITIATED BLOCK ASSESSMENT PROCEE DINGS. THE FIRST ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO JU RISDICTION FOR PASSING ASSESSMENT ORDER UNDER SECTION 158BD OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 3. THE ONLY ARGUMENT OF THE LD.COUNSEL FOR THE ASSE SSEE IS THAT NO SATISFACTION WAS RECORDED AS REQUIRED UNDER SECT ION 158BD OF THE ACT, THEREFORE, THE ASSESSING OFFICER CANNOT PA SS THE IMPUGNED ASSESSMENT ORDER UNDER SECTION 158BD OF THE ACT. O N GOING THROUGH THE ORDER OF THE CIT(APPEALS), IT APPEARS T HAT THIS IS SECOND ROUND OF LITIGATION. IN THE EARLIER ROUND OF LITIG ATION, THE ASSESSEE DID NOT RAISE ANY OBJECTION WITH REGARD TO JURISDICTION AND THE MATTER TRAVELLED UPTO THE HIGH COURT AND THE HIGH COURT RE MANDED THE MATTER BACK TO THE ASSESSING OFFICER TO PROVIDE AN OPPORTUNITY TO THE ASSESSEE. THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT THE ASSESSING OFFICER HAS PASSED THE ORDER CONSEQUENT T O THE ORDER PASSED BY THE HIGH COURT. THEREFORE, THERE IS NO I NFIRMITY IN THE 3 I.T.(SS) A. NO.9/MDS/15 ORDER OF THE LOWER AUTHORITY. ACCORDINGLY, THE ORD ER OF THE CIT(APPEALS) IS CONFIRMED. 4. THE NEXT GROUND OF APPEAL IS WITH REGARD TO REJE CTION OF BOOKS OF ACCOUNTS. 5. SH. PHILIP GEORGE, THE LD.COUNSEL FOR THE ASSESS EE, SUBMITTED THAT THE ASSESSING OFFICER WITHOUT ANY MA TERIAL AVAILABLE DURING THE COURSE OF SEARCH OPERATION REJECTED THE BOOKS OF ACCOUNTS. THE LOOSE SHEET SAID TO BE FOUND DURING THE COURSE OF SEARCH OPERATION COULD BE AT THE BEST CALLED AS DUM B DOCUMENT, THEREFORE, THAT DOCUMENT CANNOT BE A BASIS TO REJEC T THE BOOKS OF ACCOUNTS. THE LD.COUNSEL FURTHER SUBMITTED THAT THE BOOKS OF THE ASSESSEE WERE AUDITED FOR THE ASSESSMENT YEAR 1994- 95 ON 14.12.1995 AND FOR THE ASSESSMENT YEAR 1995-96 ON 2 9.03.1996. SIMILARLY FOR THE ASSESSMENT YEAR 1996-97, THE BOOK S WERE AUDITED ON 28.11.1996. 6. ON THE CONTRARY, SH. A.B. KOLI, THE LD. DEPARTME NTAL REPRESENTATIVE, SUBMITTED THAT SEVERAL LOOSE SHEETS WERE FOUND DURING THE COURSE OF SEARCH OPERATION WHICH DISCLOS E THE TRANSACTION OF THE FIRM, WHICH WAS NOT RECORDED IN THE BOOKS. THEREFORE, THE 4 I.T.(SS) A. NO.9/MDS/15 ASSESSING OFFICER FOUND THAT THE BOOKS DO NOT REFLE CT THE CORRECT PROFIT OF THE ASSESSEE. ACCORDINGLY, THE SAME WERE RIGHTLY REJECTED. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT SEVERAL LOOSE SHEETS WERE FOUND DURING THE COURSE OF SEARCH OPERATION. THE ASSESSEE CALLED THE SAME AS DUMB DOCUMENT. ACCORDING TO THE ASSESSEE, THESE DOCUMEN TS DO NOT HAVE ANY EVIDENTIARY VALUE. THE FACTS REMAINS THAT THE LOOSE SHEETS FOUND DURING THE COURSE OF SEARCH OPERATION DISCLOS E THE TRANSACTION WHICH WAS NOT RECORDED IN THE BOOKS. THEREFORE, TH E BOOK RESULT MAY NOT REFLECT THE CORRECT FINANCIAL POSITION OF T HE ASSESSEE, HENCE, THE ASSESSING OFFICER HAS RIGHTLY REJECTED THE BOOK S OF ACCOUNTS. THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE W ITH THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY, THE SAME IS CONFIRME D. 8. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADDI TION OF ` 1,20,000/- FOR THE ASSESSMENT YEAR 1995-96 MADE TOW ARDS SALARIES TO WORKING PARTNERS. 9. SH. PHILIP GEORGE, THE LD.COUNSEL FOR THE ASSESS EE, SUBMITTED THAT NO MATERIAL WAS FOUND DURING THE COU RSE OF SEARCH 5 I.T.(SS) A. NO.9/MDS/15 OPERATION. THEREFORE, THERE CANNOT BE ANY ADDITION WITH REGARD TO PAYMENT OF SALARIES MADE BY THE ASSESSEE TO PARTNER S. 10. ON THE CONTRARY, SH. A.B. KOLI, THE LD. DEPARTM ENTAL REPRESENTATIVE, SUBMITTED THAT UNDER EXPLANATION (B ) TO SECTION 158BB(1) OF THE ACT, THE UNDISCLOSED INCOME OF THE PARTNERSHIP FIRM FOR EACH PREVIOUS YEAR FALLING WITHIN THE BLOCK PER IOD SHALL BE THE INCOME DETERMINED BEFORE ALLOWING DEDUCTION OF SALA RY, INTEREST, COMMISSION, BONUS OR REMUNERATION BY WHATEVER NAME CALLED TO ANY PARTNER NOT BEING A WORKING PARTNER. HERE, IT IS NOBODYS CASE THAT THE PAYMENT OF ` 1,20,000/- WAS MADE TO WORKING PARTNERS. THEREFORE, THE PAYMENT MADE TO THE PARTNERS CANNOT BE ALLOWED FROM THE UNDISCLOSED INCOME DETERMINED BY THE ASSES SING OFFICER. IN OTHER WORDS, THE UNDISCLOSED INCOME OF THE PARTN ERSHIP HAS TO BE DETERMINED BEFORE ALLOWING THE DEDUCTION TOWARDS PA YMENT OF SALARIES. THEREFORE, ACCORDING TO THE LD. D.R., TH E CIT(APPEALS) HAS RIGHTLY CONFIRMED THE ADDITION. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. WE HAVE CAREFULLY GONE THROUGH THE EXPLANATION (B) TO SECTI ON 158BB(1) WHICH READS AS FOLLOWS:- 6 I.T.(SS) A. NO.9/MDS/15 158BB(1) .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. EXPLANATION FOR THE PURPOSES OF DETERMINATION OF UNDISCLOSED INCOME, - (A) .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. (B) OF A FIRM, RETURNED INCOME AND TOTAL INCOME ASSESSE D FOR EACH OF THE PREVIOUS YEARS FALLING WITHIN THE BLOCK PERI OD SHALL BE THE INCOME DETERMINED BEFORE ALLOWING DEDUCTION OF SALA RY, INTEREST, COMMISSION, BONUS OR REMUNERATION BY WHAT EVER NAME CALLED TO ANY PARTNER NOT BEING A WORKING PARTNER : PROVIDED THAT UNDISCLOSED INCOME OF THE FIRM SO DET ERMINED SHALL NOT BE CHARGEABLE TO TAX IN THE HANDS OF THE P ARTNERS, WHETHER ON ALLOCATION OR ON ACCOUNT OF ENHANCEMENT; IN VIEW OF THE ABOVE, THE TOTAL INCOME ASSESSED FOR THE PREVIOUS YEARS FALLING WITHIN THE BLOCK PERIOD SHALL BE THE INCOME DETERMINED BEFORE ALLOWING DEDUCTION TOWARDS PAYMENT OF SALARI ES TO ANY PARTNER NOT BEING A WORKING PARTNER. AS RIGHTLY SU BMITTED BY THE LD. D.R., IT IS THE NOT CASE OF THE ASSESSEE THAT THE P AYMENT WAS MADE TO WORKING PARTNERS. THEREFORE, THE TOTAL INCOME S HALL BE DETERMINED BEFORE ALLOWING DEDUCTION TOWARDS PAYMEN T OF SALARIES TO THE PARTNERS. HENCE, THIS TRIBUNAL IS OF THE CO NSIDERED OPINION THAT THE CIT(APPEALS) HAS RIGHTLY CONFIRMED THE ADD ITION MADE BY THE ASSESSING OFFICER. 7 I.T.(SS) A. NO.9/MDS/15 12. THE NEXT GROUND APPEAL IS WITH REGARD TO PAYMEN T OF ` 24,559/- TOWARDS INTEREST TO THE PARTNERS. 13. WE HAVE HEARD BOTH THE LD.COUNSEL FOR THE ASSES SEE AND THE LD. DEPARTMENTAL REPRESENTATIVE. IN VIEW OF EXPLAN ATION (B) TO SECTION 158BB(1) OF THE ACT, THE TOTAL INCOME SHALL BE DETERMINED BEFORE ALLOWING DEDUCTION OF SALARIES AND INTEREST TO THE PARTNERS. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT THE CIT(APPEALS) HAS RIGHTLY CONFIRMED THE ADDITION OF ` 24,559/-, HENCE THE SAME IS CONFIRMED. 14. THE NEXT GROUND OF APPEAL IS WITH REGARD TO UND ISCLOSED SALE CONSIDERATION OF ` 57,60,754/-. 15. SH. PHILIP GEORGE, THE LD.COUNSEL FOR THE ASSES SEE, SUBMITTED THAT FOR THE ASSESSMENT YEAR 1995-96, THE ASSESSING OFFICER MADE AN ADDITION OF ` 57,60,754/- TOWARDS UNDISCLOSED PORTION OF THE SALE CONSIDERATION. ACCORDING TO TH E LD. COUNSEL, THE ASSESSING OFFICER MAINLY PLACED HIS RELIANCE ON THE SHEET NO.17 SAID TO BE SEIZED AT THE TIME OF SEARCH OPERATION. ACCO RDING TO THE LD. COUNSEL, SHEET NO.17 IS A DUMB DOCUMENT, THEREFORE, IT HAS NO EVIDENTIARY VALUE. THE LD.COUNSEL FURTHER SUBMITTE D THAT A COPY OF 8 I.T.(SS) A. NO.9/MDS/15 DUMB DOCUMENT IS AVAILABLE AT PAGE 75 OF THE PAPER- BOOK. THIS DOCUMENT DOES NOT DISCLOSE THE RECEIPT OF SALE CONS IDERATION TO THE EXTENT OF ` 57,60,754/-. ALTERNATIVELY, THE LD.COUNSEL SUBMITT ED THAT IF, FOR ANY REASON, THE AMOUNT OF ` 57,60,754/- IS TAKEN AS SALE CONSIDERATION, THEN THE EXPENDITURE REFERRED IN THE VERY SAME LOOSE SHEET NO.17 HAS TO BE ALLOWED WHILE COMPUTING THE U NDISCLOSED INCOME. THE LD.COUNSEL FURTHER SUBMITTED THAT IN T HE VERY SAME DUMB SHEET NO.17, A SUM OF ` 17,86,779/-, ` 14,40,030/- AND ` 1,54,885/- AND ANOTHER SUM OF ` 1,63,017/- TOTALLING TO THE EXTENT OF ` 35,44,711/- WAS MARKED AS EXPENDITURE. THEREFORE, THESE EXPENDITURES HAVE TO BE DEDUCTED FROM THE SO-CALLED SALE CONSIDERATION OF ` 57,60,754/-. REFERRING TO THE ORDER OF THE CIT(APPEALS), THE LD.COUNSEL SUBMITTED THAT THE CIT (APPEALS) REJECTED THE CLAIM OF THE ASSESSEE ON THE GROUND TH AT THE EXPENSES WERE ALREADY CLAIMED IN THE BOOKS OF ACCOUNTS, THER EFORE, NO FURTHER EXPENSES COULD BE CONSIDERED. ACCORDING TO THE LD. COUNSEL, WHEN THE CIT(APPEALS) FOUND THAT THE SALE WAS OUTSIDE TH E BOOKS, THE EXPENSES DISCLOSED IN THE SAME DOCUMENT HAS TO BE A LLOWED WHILE COMPUTING THE TOTAL INCOME, THEREFORE, THE CIT(APPE ALS) IS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF ` 57,60,754/-. 9 I.T.(SS) A. NO.9/MDS/15 16. ON THE CONTRARY, SH. A.B. KOLI, THE LD. DEPARTM ENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE CLAIMS EXPENDITURE IN THE BOOKS OF ACCOUNT. THEREFORE, NO FURTHER EXPEND ITURE COULD BE ALLOWED FOR THE UNDISCLOSED SALES RECORDED IN THE L OOSE SHEET FOUND IN THE COURSE OF SEARCH OPERATION. 17. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. WE HAVE CAREFULLY GONE THROUGH THE COPY OF THE SO-CALLED LO OSE SHEET NO.17, WHICH IS AVAILABLE AT PAGE 75 OF THE PAPER-BOOK. I N THE MIDDLE OF THE SHEET, UNDER THE HEAD SALES UPTO MARCH, 1995, IT WAS SHOWN AS ` 57,60,754/- IN CASH. THE EXPENSES TO THE EXTENT OF ` 17,86,779/- IS ALSO REFERRED IN THE TEXT OF THE VERY SAME PAPER . ANOTHER SUM OF ` 14,40,030/- AND ` 1,54,885/- ` 1,63,017/- IS ALSO REFERRED IN THE VERY SAME LOOSE SHEET. THIS TRIBUNAL IS OF THE CONSIDER ED OPINION THAT WHEN THE ASSESSING OFFICER PLACED HIS RELIANCE FOR MAKING THE ADDITION OF ` 57,60,754/- TOWARDS UNDISCLOSED SALE CONSIDERATION ON THE BASIS OF THE LOOSE SHEET NO.17, THE EXPENDITURE REFERRED IN THE VERY SAME LOOSE SHEET NO.17 CANNOT BE IGNORED. IN OTHER WORDS, THE DETAILS FOUND IN THE LOOSE SHEET NO.17 HAS TO BE RE JECTED IN TOTO OR ACCEPTED IN TOTO. THE ASSESSING OFFICER CANNOT TAK E THE SALES FIGURE 10 I.T.(SS) A. NO.9/MDS/15 AT ` 57,60,754/- AND IGNORE THE EXPENDITURE REFERRED IN THE VERY SAME SHEET. THE ONLY CONTENTION OF THE REVENUE IS THAT EXPENDITURE WAS CLAIMED IN THE BOOKS OF ACCOUNT. T HE BOOKS OF ACCOUNT WERE REJECTED. THE SALES MADE BY THE ASSES SEE IS OUTSIDE THE BOOKS OF ACCOUNT AS FOUND IN THE LOOSE SHEET. THEREFORE, THE EXPENDITURE INCURRED ON THE BASIS OF THE VERY SAME LOOSE SHEET CANNOT BE IGNORED. THIS TRIBUNAL IS OF THE CONSIDE RED OPINION THAT THE EXPENDITURE OF ` 35,44,711/- REFERRED IN THE VERY SAME SHEET HAS TO BE TAKEN INTO CONSIDERATION WHILE COMPUTING THE UNDISCLOSED INCOME OF THE ASSESSEE. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE MODIFIED AND THE ASSESSING OFFICER IS DIRECTED TO TAKE THE UNDISCLOSED INCOME AT ` 22,16,043/- AFTER ALLOWING THE EXPENDITURE AT ` 35,44,711/-. 18. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADD ITION OF ` 48,25,000/- TOWARDS UNDISCLOSED SALE CONSIDERATION FOR THE ASSESSMENT YEAR 1996-97. 19. SH. PHILIP GEORGE, THE LD.COUNSEL FOR THE ASSES SEE, SUBMITTED THAT THE ASSESSEE FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 1996-97 ON 28.11.1996. THE SEARCH WAS CARRIED ON 19.01.1996. THE DUE DATE FOR FILING OF RETURN O F INCOME FOR THE 11 I.T.(SS) A. NO.9/MDS/15 ASSESSMENT YEAR 1996-97 WAS 31.07.1996. THEREFORE, THE DATE OF FILING OF RETURN OF INCOME HAD NOT EXPIRED ON THE D ATE OF SEARCH, HENCE, NO UNDISCLOSED INCOME CAN BE COMPUTED FOR TH E ASSESSMENT YEAR 1996-97. THE LD.COUNSEL FURTHER SUBMITTED THA T NO SEARCH MATERIAL WAS FOUND FOR THE ASSESSMENT YEAR 1996-97. THE ASSESSING OFFICER SIMPLY ESTIMATED THE SALE CONSIDE RATION AT ` 59,86,400/- UPTO 19.01.1996 AT 125%. THEREAFTER CO MPUTED THE UNDISCLOSED SALES AT ` 48,25,000/-. IN THE ABSENCE OF ANY MATERIAL, ACCORDING TO THE LD. COUNSEL, THE ESTIMATE OF SALES AT 125% IS NOT JUSTIFIED. 20. ON THE CONTRARY, SH. A.B. KOLI, THE LD. DEPARTM ENTAL REPRESENTATIVE, SUBMITTED THAT FOR THE ASSESSMENT Y EAR 1995-96, SHEET NO.17 FOUND DURING THE COURSE OF SEARCH OPERA TION DISCLOSES THE SALE CONSIDERATION OF ` 57,60,754/- OUTSIDE THE BOOKS OF ACCOUNT, THEREFORE, THE UNDISCLOSED SALES FOR THE ASSESSMENT YEAR 1996-97 HAS TO BE ESTIMATED ON THE SAME PROPOSITION AS THAT OF ASSESSMENT YEAR 1995-96. THE ASSESSEE ADMITTED THE SALES FOR THE ASSESSMENT YEAR 1995-96 AT ` 46.96 LAKHS AND THE UNDISCLOSED SALES FOUND AS PER LOOSE SHEET NO.17 IS 57.61 LAKHS. THEREFORE, T HE ASSESSING OFFICER ESTIMATED THE UNDISCLOSED SALES AT 125% FOR THE ASSESSMENT 12 I.T.(SS) A. NO.9/MDS/15 YEAR 1996-97 AND DETERMINED THE UNDISCLOSED SALE CO NSIDERATION AT ` 48,25,000/-. HENCE, ACCORDING TO THE LD. D.R., THE CIT(APPEALS) HAS RIGHTLY CONFIRMED THE ADDITION. 21. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE DUE DATE FOR FILING THE RETURN OF INCOME FOR THE AS SESSMENT YEAR 1996-97 WAS 31.07.1996. THE SEARCH WAS CONDUCTED O N 19.01.1996. WE HAVE CAREFULLY GONE THROUGH THE PRO VISIONS OF SECTION 158BB OF THE ACT. SECTION 158BB(1) CLEARLY SAYS THAT THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD SHALL BE CO MPUTED ON THE BASIS OF THE EVIDENCE FOUND AS A RESULT OF SEARCH A ND SEARCH MATERIAL OR INFORMATION AS AVAILABLE WITH THE ASSES SING OFFICER AND RELATABLE TO SUCH EVIDENCE AS REDUCED BY THE AGGREG ATE OF THE TOTAL INCOME OR AS THE CASE MAY BE AS INCREASED BY THE AG GREGATE OF SUCH LOSSES OF THE PREVIOUS YEARS DETERMINED. SUB- CLAUSE (D) OF SECTION 158BB(1) OF THE ACT CLEARLY SAYS THAT WHERE THE PREVIOUS YEAR HAS NOT ENDED OR THE DATE OF FILING THE RETURN OF INCOME UNDER SECTION 139(1) OF THE ACT HAS NOT EXPIRED, ON THE B ASIS OF ENTRIES RELATING TO SUCH INCOME OR TRANSACTIONS AS RECORDED IN THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS SHOULD BE REDUCED. IN THE FACTS OF THE 13 I.T.(SS) A. NO.9/MDS/15 CASE BEFORE US, THE SEARCH WAS CONDUCTED ON 19.01.1 996 AND ADMITTEDLY, THE PREVIOUS YEAR HAS NOT ENDED ON THE DATE OF SEARCH. MOREOVER, THE DUE DATE FOR FILING RETURN OF INCOME UNDER SECTION 139(1) OF THE ACT HAS NOT EXPIRED. NO MATERIAL WAS FOUND DURING THE COURSE OF SEARCH OPERATION. THEREFORE, THE ASSESSI NG OFFICER CANNOT COMPUTE ANY UNDISCLOSED INCOME IN THE ABSENC E OF ANY MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATIO N, WHICH IS NOT REFLECTED IN THE BOOKS OF ACCOUNT MAINTAINED IN THE REGULAR COURSE. ADMITTEDLY, NO MATERIAL WAS FOUND DURING THE COURSE OF SEARCH OPERATION FOR THE ASSESSMENT YEAR 1996-97 AND THE U NDISCLOSED SALES ARE ESTIMATED ON THE BASIS OF THE LOOSE SHEET NO.17 WHICH RELATES TO ASSESSMENT YEAR 1995-96. IN VIEW OF THE SPECIFIC LANGUAGE EMPLOYED BY THE LEGISLATURE IN SECTION 158 BB(1) OF THE ACT, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THA T THE ASSESSING OFFICER HAS TO CONFINE HIMSELF TO THE EVIDENCE FOUN D DURING THE COURSE OF SEARCH OPERATION AND THE INFORMATION WHIC H IS RELATABLE TO SUCH EVIDENCE. IN THE ABSENCE OF ANY EVIDENCE OR I NFORMATION, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THERE CA NNOT BE ANY ADDITION ON ESTIMATE BASIS. MOREOVER, THE PREVIOU S YEAR HAS NOT ENDED ON THE DATE OF SEARCH AND DUE DATE FOR FILING OF RETURN OF INCOME HAS NOT EXPIRED AS PRESCRIBED UNDER SECTION 139(1) OF THE 14 I.T.(SS) A. NO.9/MDS/15 ACT. IN THOSE CIRCUMSTANCES, COMPUTATION OF UNDISC LOSED INCOME FOR THE BLOCK PERIOD, FOR THE ASSESSMENT YEAR 1996-97 I S NOT CALLED FOR. THEREFORE, THIS TRIBUNAL IS UNABLE TO UPHOLD THE ES TIMATION OF UNDISCLOSED SALES AT ` 48,25,000/-. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ASSESSING O FFICER IS DIRECTED TO DELETE THE ADDITION OF ` 48,25,000/- FOR THE ASSESSMENT YEAR 1996- 97. 22. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED ON 14 TH JANUARY, 2016 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 14 TH JANUARY, 2016. KRI. - +056 7620 /COPY TO: 1. () /APPELLANT 2. +,() /RESPONDENT 3. / 80 () /CIT(A)-19, CHENNAI 4. / 80 /CIT, CENTRAL-2, CHENNAI 5. 69 +0 /DR 6. :; < /GF.