2006 (5) TMI 76

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.... 132 of the Income-tax Act, 1961, was conducted by the Revenue agencies on the premises of the assessee on November 29, 1995, which continued up to February 12, 1996. Based on the evidence collected in the course of search, a block assessment under section 158BC was made in tenns of an order dated February 28, 1997. The Assessing Officer came to the conclusion that the assessee had not disclosed a....

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....company. It was instead advanced as interest-free loans to the employees. He calculated a sum of Rs. 13,32,666 towards interest which the said amount would have earned and added the same to the taxable income of the assessee. The second addition which the Assessing Officer made was that a sum of Rs. 2,67,826 representing payments made to M/s. Agarwal Gases for the gas cylinders purchased from the....

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....the view that in the course of search, the Revenue authorities had seized trust receipts which according to it supported the version given by the assessee regarding advance of cash in hand to employees. The Tribunal was also of the view that in a block assessment, additions could be made only if there was any incriminating material found in the course of search. Similarly in the case of purchases....

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....r the explanation offered by the assessee for the non-availability of actual cash in hand was acceptable. It is true that the Assessing Officer had rejected the explanation given by the assessee but the Tribunal has, upon a reappraisal of the material correctly come to the conclusion that the said explanation was acceptable. In any event, whether or not the explanation was acceptable, having regar....