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TMI Blog2002 (10) TMI 337X X X X Extracts X X X X X X X X Extracts X X X X ..... section 132 of the Income-tax Act by the Income-tax authorities. Subsequently, the Assessing Officer issued notice under section 158BC. However, the assessee did not furnish any return in response to the said notice. The Assessing Officer called upon the assessee to get its account audited under section 142(2A) for the assessment years 1992-93, 1993-94 and 1994-95. M/s. Dhanesh Gupta Company, 1-1/16, Ansari Road, Daryaganj, Delhi was appointed as auditor and were directed to submit the audit report as per Rule 14-A of the I.T. Rules, 1962. However, the necessary audit report does not appear to have been submitted during the proceedings. 3. The Assessing Officer scrutinized the books of account of the assessee-company. The assessee vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment year 1996-97. The Assessing Officer thus made the block assessment determining the undisclosed income for the block period at Rs. 1,03,51,984. The assessee is aggrieved mainly against the trading additions made on ad hoc basis as well as the aforementioned addition made on account of unexplained investment in the property under section 69B. 5. In the grounds of appeal, the assessee has raised as many as 8 grounds. However, during the course of hearing before us, the learned Counsel of the assessee pressed only three grounds as under : ( a )Ground Nos. 3 and 4 regarding ad hoc trading addition of Rs. 35 lakhs in assessment year 1996-97 and Rs. 65 lakhs in assessment year 1997-98; and ( b )Ground No. 5 regarding additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for adjournment may be granted on the ground that he needed further time for intensive study of the case. However, since the issue was fully covered by earlier decision of the Tribunal and the legal position regarding the scope and ambit of "undisclosed income" liable to be assessed under the special assessment procedure as laid down under Chapter XIV-B of the Income-tax Act is well settled, we decline the request for further adjournment and proceed to dispose of the appeal. 8. Learned Counsel invited our attention to the paper book filed by the assessee including, inter alia, audited balance sheets for assessment years 1996-97 and 1997-98. Learned Counsel submitted that in the instant case, no incriminating evidence or material has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned CIT(A) vide appellate order dated 10-11-2000. For assessment year 1986-87, the Assessing Officer has processed return under section 143(1)( a ) and did not proceed further under section 143. 9. After careful consideration of the facts and materials on record, we have no hesitation in deleting the impugned trading additions made on ad hoc basis by the Assessing Officer, namely, Rs. 35 lakhs for assessment year 1996-97 and Rs. 65 lakhs for assessment year 1997-98. The proposition is well settled by various judicial pronouncements that the assessment of undisclosed income in the block period can only be done on the basis of evidence found as a result of search operations and such other material or information as are available with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer has done is to reject the books of account as unreliable and take resort to the provisions of section 145(1) and made ad hoc additions for two assessment years, namely 1996-97 and 1997-98 which form part of the block assessment period. We are of the considered opinion that no such additions merely on the basis of estimates are liable to be made in the block assessment as envisaged under Chapter XIV-B which provides for special assessment procedure limited to facts and material found during the search operations. This procedure is entirely different from that of regular assessment procedure. As held by the judicial authorities, both procedures would run simultaneously independent of each other. Thus, if books of account a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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