TaxTMI 
TaxTMI 
2010 (4) TMI 100
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....to the block period 01.04.1990 to 17.10.2000 is the subject matter of the present appeal preferred by the revenue. The revenue has proposed the following questions, which, according to it, are substantial questions of law and require the consideration of this court:- "a) Whether in the facts and circumstances of the case, the Income-tax Appellate Tribunal erred in deleting the additions of Rs 44,38,997/- in spite of admission of the assessee that it was not in a position to produce vouchers or authenticate the genuineness of expenses? b) Whether the Income-tax Appellate Tribunal erred in holding that Section 69C is not applicable to block assessment? c) Whether the Income-tax Appellate Tribunal misconstrued the provisions of Section 1....
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.... to have been made by the Assessing Officer. 4. The case before us has two dimensions. The first being as to whether the Assessing Officer was right in treating the said sum of Rs 44,38,997/- as unexplained expenditure under Section 69C of the said Act. The second aspect is whether the said addition could legitimately have been made in the course of a block assessment. 5. Insofar as the first aspect of the matter is concerned, we find that Section 69C clearly stipulates that where, in any financial year, the assessee has incurred an expenditure and he offers no explanation about "the source of such expenditure or part thereof", or the explanation, if it is offered by him, is not, in the opinion of the Assessing Officer, satisfactory, th....
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....n. 7. Coming to the second aspect of the matter, we find that both the Commissioner of Income-tax (Appeals) as well as the Income-tax Appellate Tribunal have held that the addition in a block assessment can only be made on the basis of the material found during the search. No material as such was found during the search and seizure operations and it is only in the special audit directed by the Assessing Officer, who was unable to find any material at the time of search, that the authenticity of the expenditures were doubted. We are of the view that both the lower appellate authorities correctly came to the conclusion that this was not a case where the addition would be justified in block assessment proceedings. 8. With regard to propose....