Block assessment additions require incriminating search material; presumptive undisclosed income was deleted for lack of supporting evidence.

In a block assessment under section 158BC, undisclosed income must be confined to the years or periods for which incriminating material is actually found in the search, and additions cannot rest on presumptions, assumptions, or roving enquiries. The Tribunal applied CBDT Circular No. 717 and the Chapter XIV-B principle that only search-detected undisclosed income can be assessed. On the facts, the material relied upon by the Assessing Officer was insufficient to support the disputed addition for the relevant period, so the addition was deleted.

---

---

Issues: Whether, in a block assessment under section 158BC, the addition towards undisclosed income could be sustained on presumptions and assumptions in the absence of adequate incriminating material found in the search.

Analysis: The assessment was made under the block assessment scheme following a search under section 132. The Tribunal noted that CBDT Circular No. 717 clarified that where incriminating material is found only for certain years or periods within the block period, the computation of undisclosed income should be confined to those years or periods. It further relied on the principle that Chapter XIV-B authorises assessment only of undisclosed income detected as a result of search and does not permit roving enquiries or additions based merely on conjecture. On the facts, the material relied upon by the Assessing Officer did not justify the large addition made for the relevant period.

Conclusion: The addition of Rs. 26,84,652 was deleted and the assessee succeeded on this issue.

---