Block assessment cannot cover income already disclosed in regular assessment when no undisclosed income is found in search material.

Income already reflected in regular assessment could not be brought into block assessment under Chapter XIV-B, because that scheme applied only to undisclosed income found through search material. The Tribunal's finding that the search material had already been accounted for in the regular proceedings meant no undisclosed income existed for block assessment purposes. The High Court treated the Revenue's challenge as an attempt to disturb a factual finding, and held that such a finding could not be reopened in appeal absent perversity. The proposed questions therefore did not raise any substantial question of law, and the assessee's position was upheld.

---

---

Issues: Whether income already disclosed in regular assessment could be included in block assessment under Chapter XIV-B, and whether the Tribunal's finding that no undisclosed income existed gave rise to a substantial question of law.

Analysis: The material found in search was held to have already been reflected in the regular assessment proceedings. On that basis, the Tribunal concluded that block assessment was not permissible for income already disclosed, and that only income found to be undisclosed on the basis of search material could be brought to tax under the block assessment scheme. The High Court further held that the Revenue's challenge was essentially to a finding of fact that there was no undisclosed income, and such a finding could not be re-opened in appeal in the absence of perversity. The proposed questions therefore did not amount to substantial questions of law.

Conclusion: The Revenue's appeal failed and the assessee's position was upheld.

---