Block assessment additions must rest on seized evidence, not presumption; unexplained investment and household expense estimates were deleted.

In block assessment, an addition must be based on seized material or direct evidence, not on presumption, suspicion, or mere estimation. Where a seized loose paper was capable of two explanations and the assessee's version was supported by the seller's power of attorney and affidavit, the unexplained investment addition was deleted. Likewise, an estimated addition for undisclosed household expenses based only on a general statement and ad hoc estimate was unsustainable in the absence of seized evidence, especially where the family arrangement and recorded foreign trip expenses supported the assessee. The appeal succeeded on the substantive additions, granting partial relief.

---

---

Issues: (i) Whether the addition of Rs. 10,75,000 as unexplained investment under section 69 was justified on the basis of the seized loose paper and surrounding circumstances; (ii) Whether the estimated addition of Rs. 5,96,280 towards undisclosed household expenses was sustainable in block assessment.

Issue (i): Whether the addition of Rs. 10,75,000 as unexplained investment under section 69 was justified on the basis of the seized loose paper and surrounding circumstances.

Analysis: The seized paper showed the agreed sale consideration and entries marked with positive and negative signs, but the dispute was whether the amount written below the negative sign represented cash payment or registry-related expenses. The block assessment addition could be sustained only on the basis of material found during search, not on guesswork or presumption. The record contained no direct evidence of cash payment of Rs. 9,50,000 during search, and the sworn statement and affidavit of the seller's power of attorney supported the assessee's version that the disputed amount related to registration expenses. Since two views were possible, the view favourable to the assessee was accepted.

Conclusion: The addition of Rs. 10,75,000 was not justified and was deleted, in favour of the assessee.

Issue (ii): Whether the estimated addition of Rs. 5,96,280 towards undisclosed household expenses was sustainable in block assessment.

Analysis: The estimated household expenditure was based on a general statement and an ad hoc estimate rather than seized material. The household arrangement was a joint family setup, the expenditure was stated to be contributed by family members, and the foreign trip expenditure was found recorded. In block assessment, additions cannot rest on estimations alone without supporting seized evidence.

Conclusion: The addition of Rs. 5,96,280 towards undisclosed household expenses was deleted, in favour of the assessee.

Final Conclusion: The appeal succeeded on the substantive additions, while the remaining grounds were rejected or treated as infructuous, resulting in partial relief to the assessee.

Ratio Decidendi: In block assessment proceedings, an addition must rest on seized material or direct evidence, and not on presumption, suspicion, or mere estimation when the record supports a plausible explanation in favour of the assessee.

---