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TMI Blog2015 (6) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... style "K.S.B. Silks" at Kancheepuram. The Revenue carried out search and seizure operation under section 132 of the Act in the hands of the assessee on September 14, 2000, consequent to which the block assessment was framed by the Assessing Officer under section 158BC of the Act determining undisclosed income at Rs. 1,05,91,555, vide block assessment order dated December 31, 2002. The assessee challenged the same by filing an appeal before the learned Commissioner of Income-tax (Appeals) and the same was partly allowed. Aggrieved by the relief granted by the learned Commissioner of Income-tax (Appeals), the Revenue has preferred this appeal before us. 3. The first issue relates to the addition made on account of unaccounted investments made in immovable properties. In the block assessment proceedings, the Assessing Officer listed out the immovable properties purchased by the assessee and arrived at the value of undisclosed properties at Rs. 41,30,690. However, the assessee contended that these properties were duly disclosed by him under VDIS scheme and in support of the same he produced the necessary documents. The Assessing Officer noticed that the VDIS certificates was issued by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f reopening of assessment and hence the same is not applicable to the block assessment proceedings, which is a separate code by itself. With regard to the decision of the hon'ble Supreme Court referred to above, the learned authorised representative submitted that the same was rendered in the context of advance tax and TDS amounts and hence the same also shall not have application to the facts of the instant case. The authorised representative also submitted that the view taken by the first appellate authority finds support from the decision of the hon'ble Delhi High Court in the case of CIT v. Naveen Gera [2010] 328 ITR 516 (Delhi). 7. Having heard the rival contentions, we are of 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 the 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 that was available to the Department was to assess those income, i.e., that was not covered by the VDIS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce, even if the value of vehicles is taken at cost, the depreciation should be allowed separately. However, if the value of vehicles is taken at written down value, then the depreciation is deemed to have been allowed. Hence, we agree with the decision rendered by the learned Commissioner of Income-tax (Appeals) on this issue 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 Rs. 12,86,021. However, the assessee has taken the value of stock at Rs. 10,57,990 in his computation. Hence the Assessing Officer, in effect, assessed the difference between the two figures amounting to Rs. 2,28,031 as undisclosed income of the assessee, since he took the value of stock at Rs. 12,86,021. The assessee contended before the learned Commissioner of Income-tax (Appeals) that the search parties have taken the value of stock at "tag price", i.e., at selling price, whereas, he has taken the value of stock at cost price. In the remand report, the Assessing Officer submitted that the assessee had accepted the valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also the gold declared under VDIS scheme (250 gms). The assessee also claimed that he had received gifts of gold on naming ceremony and birthdays (250 gms). The learned Commissioner of Income-tax (Appeals) accepted the contentions of the assessee with regard to the gold jewellery belonging to mother, spouse and that declared under VDIS scheme. However, he did not accept the claim of receipt of gift during naming ceremony and birthdays. 14. Considering the fact that the learned Commissioner of Income-tax (Appeals) has granted relief to the extent of gold belonging to the mother and spouse of the assessee and also that declared under VDIS scheme, we do not find any infirmity in his order, since the ladies in the Indian families normally possess jewelleries to that extent. Accordingly, we approve his order on this issue. 15. In respect of the silver articles also, the learned Commissioner of Income-tax (Appeals) gave relief in respect of silver items belonging to the assessee's mother (2500 gms), spouse (3750 gms) and that declared under VDIS scheme (1000 gms). The learned Commissioner of Income-tax (Appeals) did not accept the claim of receipt of gifts (1500 gms) by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correct in ignoring the seized materials in selective manner, i.e., the view of the learned Commissioner of Income-tax (Appeals) was that the seized materials should be given due credence in toto, unless contrary is shown. We agree with the legal position expressed by the learned Commissioner of Income-tax (Appeals). Further, the Assessing Officer has also failed to contradict the claim made by the assessee in this regard. Hence, we agree with the view expressed by the learned Commissioner of Income-tax (Appeals) on this issue also. 18. The last issue relates to the addition made towards insufficient drawings. It is an admitted fact that the Assessing Officer has made 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 learned Commissioner of Income-tax (Appeals) 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-a-vis the metro cities. Hence, in our view, the learned Commissioner of In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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