Block assessment requires seized search material; additions for suppressed sales and cash credit failed without a direct nexus to the search.

Block assessment under Chapter XIVB is confined to seized material or information directly relatable to the search, so additions for suppressed sales and unexplained cash credit cannot rest on presumption alone. Where no seized evidence showed receipt of sales consideration over and above the books, and a section 132(4) statement did not specifically implicate the assessee, the additions lacked the required search nexus. Regular assessment could not be substituted through block assessment, and the additions were deleted.

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Issues: Whether the additions for suppressed sales and unexplained cash credit in block assessment were sustainable in the absence of seized material showing undisclosed income.

Analysis: Block assessment under Chapter XIVB is confined to material found during search or information relatable to the search. The record showed no seized evidence establishing that the assessee had received sales consideration over and above the books of account. The reliance placed on a statement recorded under section 132(4) was insufficient, as it did not specifically implicate the assessee. In these circumstances, the additions were founded on presumption rather than search material, and regular assessment could not be substituted by block assessment.

Conclusion: The additions were rightly deleted and the questions were answered against the Revenue and in favour of the assessee.

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