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TMI Blog2008 (10) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... ing in jewellery under the name and style of M/s Siddesh Jewellers. Search action under s. 132 of the IT Act, 1961 (the Act) was carried out at the business as well as residential premises of the assessee on 24th Oct., 2002. No incriminating material was found in the course of search except some difference in the stock found at the time of search. The stock found was valued at Rs. 8,60,810 while the stock as per the books of accounts prepared tentatively on the date of search was of Rs. 9,42,475. In response to the notice under s. 158BC of the Act, the assessee filed return declaring undisclosed income at nil. 3. In the course of assessment proceedings, it was noted by the AO that certain documents in the nature of Jamakharch Panas were fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee, it was reiterated that it had no relation with such party. 4. The AO rejected the explanation of the assessee. According to him. M/s Ranka Jewellers had clearly identified the assessee as a person referred to in the seized material. Therefore, the denial of assessee did not carry much weight. It was also noted by him that similar nature of transactions were also found in such seized material in the name of some other parties who were making unaccounted sales to Ranka Group and one of the parties of Mumbai had accepted in the assessment proceedings that it was making unaccounted sales to Ranka Group. On the basis of this fact, the AO observed that there was no difference between the transactions effected by Mumbai party and the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de by the AO on the basis of material seized from the premises of Shri Prakash Salunkhe. Apart from confirming the additions, the learned CIT(A), after going through the transactions in the seized material and seeking the remand report from the AO, enhanced the unaccounted income in respect of unaccounted investment from Rs. 2 lakhs to Rs. 16,36,762. Regarding the gross profit addition of Rs. 17,916, the learned CIT(A) restored the matter to the file of the AO for fresh adjudication after making certain verifications. It was also directed that if the claim of the assessee was found to be correct on factual aspects then the addition would stand deleted. Aggrieved by the said order of the learned CIT(A), the assessee has preferred this appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of s. 158BB(1) as originally enacted as well as the provisions of s. 158BB(1) amended by the Finance Act, 2002 with retrospective effect from 1st July, 1995. Such provisions prior to and after amendment are given below: ------------------------------------------------------------ Sec. 158BB(1) ------------------------------------------------------------ Prior to Amendment After Amendment ------------------------------------------------------------ The undisclosed income of the The undisclosed income of block period shall be the the block period shall be aggregate of the total the aggregate of the total income of the previous income of the previous years years falling within the falling within the block block perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e words 'such other materials or information' may not necessarily refer to the word or words preceding to it. Considering the object of the legislature it was held that the words 'such other materials or information' should be understood as 'any other material'. However, after the amendment, the said decision has no relevance since the other materials or information to be used must relate to the evidence found in the course of search at the premises of the assessee. Word 'relatable' is a word of significance. Since the amendment has been made with retrospective effect from 1st July, 1995, we are required to adjudicate the issue with reference to the amended provisions. 10. The word 'relation' as per the various dictionary meanings means co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e made solely on the basis of material found from the position of the third party. 12. Even otherwise, on facts, we are of the view that addition was unjustified. We have gone through the seized papers in the form of ledger accounts in the books of Ranka Jewellers found from the premises of Mr. Prakash Salunkhe which appear at pp. 8 to 15 of the paper book. The perusal of the same shows that the name of the assessee was nowhere written on these papers. It only shows that one word 'Kirti' was mentioned which by itself does not lead to the inference that it was the account of the assessee. The assessee had clearly denied any relation in respect of such transactions. Even Ranka Jewellers has nowhere stated that this account refers to the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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