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TMI Blog2003 (4) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... irm a search and seizure operation was carried out under section 132 of the Act whereby certain amount in cash and jewelleries were found. A notice under section 158BC was issued on July 7, 1997, and the respondent was asked to furnish return in respect of the block period April 1, 1986, to March 31, 1996, and also for April 1, 1996, to December 24, 1996. In pursuance of the notice the assessee filed the return and the Assessing Officer proceeded with assessment. While dealing with investment in a construction, the Assessing Officer came to hold that the investment for the respective years was Rs. 10,18,000. To arrive at the conclusion the Assessing Officer placed reliance on the report obtained from the Departmental Valuation Officer. He e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... misconstrued the provision engrafted under section 158BB of the Act inasmuch as the said provision unequivocally lays postulate that the Assessing Officer can take into consideration the information at the time of assessment and the report of the Departmental Valuation Officer is an information and material one and legally obtainable under the provision. He has also drawn our attention to section 131(1)(d) of the Act. To bolster his submission he has placed reliance on the decisions rendered in the case of C.T. Laxmandas v. CIT (Assistant) [1994] 208 ITR 859 (Mad) and William De Noronha v. CIT (Assistant) [1997] 227 ITR 27 (All). Mr. Sumit Nema, learned counsel for the assessee, per contra, contended that the scope of section 158BB cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e due date for filing a return of income has expired but no return of income has been filed, as nil; (d) where the previous year has not ended or the date of filing the return of income under sub-section (1) of section 139 has not expired, on the basis of entries relating to such income or transactions as recorded in the books of account and other documents maintained in the normal course on or before the date of the search or requisition relating to such previous years; (e) where any order of settlement has been made under sub-section (4) of section 245D, on the basis of such order; (f) Where an assessment of undisclosed income had been made earlier under clause (c) of section 158BC, on the basis of such assessment. Explanation.--For t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or collection of report as that would be in tune and harmony with the language employed under sections 158BB and 131(1)(d) of the Act. Mr. Nema would like us to interpret the aforesaid provision in the backdrop that unless the information is in continuance of the document or material seized in the course of search an independent report cannot form the foundation for computation of undisclosed income of the block period. Before we refer to the circular of the Central Board of Direct Taxes, we would like to refer to the citations made at the Bar. In the case of C.T. Laxmandas [1994] 208 ITR 859 the learned single judge of the Madras High Court expressed the view that the Income-tax Officer has power to determine the market value of a capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer, thereafter, referred the matter to the Departmental Valuer, who valued the property at Rs. 6.66 lakhs and, accordingly, the difference has been added to the income of the assessee as undisclosed income. The above basis clearly shows that the Department has not understood the scope of Chapter XIV-B of the Income-tax Act. By no stretch of imagination, the impugned addition fell within the Chapter XIV-B. There would be no finality, if the Department is permitted to add back to the income of the assessee on the basis of the Departmental valuer's report obtained subsequent to the order of the regular assessment. Hence, the Tribunal was right in deleting the said addition. Accordingly, question No. 3 is answered in the affirmative, i.e., ..... X X X X Extracts X X X X X X X X Extracts X X X X
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