Subsequent year evidence cannot support an addition for an earlier assessment year absent material tied to that year.

Equal time addition for assessment year 1996-97 could not be sustained where the first inspection showed only a stock deficiency unsupported by purchase bills and there was no material linking any omission to that year. Evidence from the later assessment year 1997-98, which disclosed suppression, was held irrelevant to justify an addition for the earlier year because the materials must relate to the transaction under consideration in that assessment year alone. The corresponding penalty also failed. The Tribunal's order was set aside and relief was granted to the assessee.

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Issues: Whether the equal time addition and the corresponding penalty for the assessment year 1996-97 could be sustained on the basis of the inspection made in that year and the materials from a subsequent assessment year.

Analysis: The assessment year in question was 1996-97. The first inspection in that year disclosed only a stock deficiency not supported by purchase bills, and there were no other materials to justify an inference of probable omission warranting equal time addition. The later inspection during the subsequent assessment year 1997-98, which revealed suppression, could not be used to uphold an addition for the earlier year, because the materials relevant to the assessment must relate to the transaction of the year under consideration alone.

Conclusion: The equal time addition was not sustainable for the assessment year 1996-97 and the corresponding penalty also could not stand.

Final Conclusion: The Tribunal's order was set aside and relief was granted to the assessee.

Ratio Decidendi: An addition for a completed assessment year cannot be sustained on the basis of subsequent year evidence in the absence of material showing suppression or omission relatable to that assessment year.

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