Block assessment additions need incriminating search material; post-search inquiry alone cannot sustain undisclosed income.

In block assessment proceedings under Chapter XIV-B, an addition cannot be sustained where the search yields no incriminating material relating to the alleged investment in the property. The text states that no document was found during search to show such investment, and the addition rested only on the assessee's return and the DVO's report. The legal point is that undisclosed income in block assessment must be founded on evidence found during search, and post-search inquiry cannot by itself create the required basis when the search material is absent. On that ground, the issue was decided in favour of the assessee and against the Revenue.

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Issues: Whether, in block assessment proceedings under Chapter XIV-B, an addition could be sustained in the absence of any incriminating material found during search in relation to the alleged investment in the property at Sainik Farms.

Analysis: The material on record showed that no incriminating document was found during the search to indicate any investment in the property. The addition was made only on the basis of the return filed by the assessee and the DVO's report. In block assessment matters, undisclosed income must be founded on evidence found during search, and post-search inquiry cannot by itself supply the necessary foundation where the search yields no incriminating material.

Conclusion: The issue was decided in favour of the assessee and against the Revenue, and no substantial question of law arose on this ground.

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