Block assessment evidence rules limit reliance on unsigned agreements and untested statements; bank-deposit addition required fresh hearing.

In block assessment, the alleged higher sale consideration for immovable property could not be adopted solely on the basis of an unsigned agreement to sell and un-confronted statements, especially where the assessee's own search statement, return under section 139(1), and the registered sale deeds supported a lower figure. The transaction was therefore to be computed on the basis of Rs. 38 lakhs rather than the higher alleged amount. The addition for unexplained bank deposits was also found to have been made without giving adequate opportunity to explain the source, so fairness required fresh adjudication. That issue was set aside and restored to the Assessing Officer for reconsideration.

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Issues: (i) Whether the consideration arising from the sale of immovable property was to be included in block assessment at Rs. 1.10 crores or restricted to Rs. 38 lakhs, and whether the unsigned agreement to sell and un-confronted statements could be relied upon; (ii) Whether the addition of unexplained bank deposits as undisclosed income under the block assessment required fresh adjudication for want of adequate opportunity.

Issue (i): Whether the consideration arising from the sale of immovable property was to be included in block assessment at Rs. 1.10 crores or restricted to Rs. 38 lakhs, and whether the unsigned agreement to sell and un-confronted statements could be relied upon.

Analysis: The block assessment provisions excluded income or transactions already recorded in documents on or before the date of search where the statutory conditions were satisfied. The agreement to sell was not signed by the buyers, the sale deeds reflected a different and lower consideration, and the alleged supporting statements were not confronted to the assessee. At the same time, the assessee's own statement at search and the return filed under section 139(1) showed a consideration of Rs. 38 lakhs, which furnished the correct basis for computation. The agreement to sell, by itself, could not be treated as conclusive of the higher alleged consideration.

Conclusion: The addition could not be sustained at Rs. 1.10 crores, and the undisclosed income from this transaction was to be computed on the basis of Rs. 38 lakhs.

Issue (ii): Whether the addition of unexplained bank deposits as undisclosed income under the block assessment required fresh adjudication for want of adequate opportunity.

Analysis: The assessment was completed within a short span after the questionnaire was issued, leaving insufficient opportunity for the assessee to explain the source of the bank deposits. In these circumstances, fairness required that the matter be reconsidered after giving a proper opportunity of hearing.

Conclusion: The addition relating to bank deposits was set aside and restored to the Assessing Officer for fresh decision.

Final Conclusion: The appeal succeeded in part, with the property transaction addition restricted and the bank-deposit issue sent back for reconsideration.

Ratio Decidendi: In block assessment, an unsigned or otherwise untested agreement to sell cannot, by itself, establish the full consideration where the assessee's own admission and the registered conveyances indicate a different figure, and additions made without adequate confrontation and opportunity may be set aside for fresh adjudication.

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