Block assessment additions must rest on seized evidence and proof of actual payment, not unsupported estimates.

In block assessment, undisclosed income must rest on material found in search and related evidence. The seized agreements for sale, affidavits, receipts, possession receipts, powers of attorney, wills and MoUs were examined; the affidavits and sale agreements supported the stated consideration for the lands covered by the agreements, and no seller was examined to discredit them. For the lands covered by the MoUs, the seized affidavits stated that no sale price had been received at the rates mentioned, and no independent evidence showed actual payment by the assessee. On that basis, the estimated addition could not be sustained under the block assessment framework.

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Issues: Whether, in a block assessment, the addition towards undisclosed income based on seized documents and Memoranda of Understanding was sustainable in the absence of evidence of actual payment or support from the sellers' affidavits.

Analysis: In a block assessment, the Assessing Officer's jurisdiction is confined to material found and seized during search and related information. The seized record included agreements for sale, affidavits, receipts, possession receipts, powers of attorney, wills and MoUs. The affidavits and agreements for sale corroborated the stated consideration for the lands covered by the agreements, and no seller was examined to discredit those documents. As regards the lands covered by MoUs, the affidavits seized during search recorded that the sellers had not received any sale price at the rates mentioned in the MoUs, and no independent evidence showed actual payment by the assessee. On those facts, the estimated addition could not be sustained under the statutory framework governing computation of undisclosed income for the block period.

Conclusion: The addition was unsustainable, and the assessee succeeded on the issue.

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