Separate assessment year principle bars additions based on later survey material without cogent evidence.

The Allahabad HC noted that an addition for undisclosed income from alleged private practice for assessment year 1998-99 could not rest on a survey report relating to 22.08.2000, because each assessment year is a separate unit and no independent material showed private practice during the relevant previous year. It held that an inference drawn from facts discovered two years later was insufficient to sustain the addition, and that the assessment was based on guesswork rather than cogent evidence. The related disallowance of agricultural income also failed for want of supporting material, and the addition was deleted.

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Issues: Whether the addition of undisclosed income from alleged private practice and the related disallowance of agricultural income for assessment year 1998-99 could be sustained on the basis of a survey and report pertaining to a later period.

Analysis: The Court noted that the assessee had specifically denied private practice during the relevant previous year and asserted only charitable activity. Apart from the survey report relating to 22.08.2000, no independent material was brought on record to show private practice during the previous year relevant to assessment year 1998-99. The Court held that each assessment year is a separate unit of assessment and that an inference founded on facts discovered two years later could not justify an addition for the earlier year. It further held that the assessment was based on guesswork and not on cogent evidence, and that the disallowance of agricultural income also lacked supporting material.

Conclusion: The questions of law were answered in favour of the assessee, and the addition for undisclosed income from private practice for assessment year 1998-99 was deleted.

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