Block assessment evidence nexus permits use of connected-person survey material when tied to search evidence.

Block assessment under Chapter XIV-B is confined to undisclosed income supported by evidence found in search or requisition, together with material relatable to that evidence. The statutory scheme requires a direct nexus between the searched material and the assessed undisclosed income. Survey material under section 133A is distinct, but where it is gathered simultaneously from a connected person during the search process and is relatable to the search evidence, it may be relied upon. The SC held that material concerning cash payments to the builder satisfied that nexus and could be used in the assessee's block assessment.

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Issues: Whether material found during a survey at the premises of a connected person can be used for block assessment of the assessee.

Analysis: Block assessment under Chapter XIV-B is confined to undisclosed income determined on the basis of evidence found as a result of search or requisition and other materials or information available with the Assessing Officer and relatable to such evidence. The statutory scheme requires a direct nexus between the searched material and the assessment of undisclosed income. The power of survey under section 133A is distinct, but where survey material is gathered simultaneously in the premises of a connected person in the course of the search process, such material may be relied upon if it is relatable to the search evidence and to the undisclosed income of the assessee. The Court held that the material regarding cash payments to the builder was relevant and could be used in the block assessment.

Conclusion: The issue was answered in favour of the Revenue; the survey material was held to be usable in the assessee's block assessment.

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