AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2009 (6) TMI 45
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.... relates to another addition made by the Assessing Officer in respect of a sum of Rs. 14,98,282 on account of disallowable travelling expenses incurred through credit cards recovered in the course of search. The said addition having met a similar fate at the hands of the appellate authority and the learned Tribunal below, the findings of the said authorities have been challenged in the instant appeal. 3. A search was conducted on April 27, 1998, and on subsequent dates in the business and residential premises of the Sarawagi group to which the assessee belongs. Admittedly, nothing was found in the course of the search. However, the search party noticed the business establishment of the assessee located at Adabari and taking into account the investments in the said building, as shown in the returns filed by the assessee, referred the matter to the Departmental Valuation Officer (DVO) for submission of a report on the valuation of the said building. The Departmental Valuation Officer submitted his report. The Assessing Officer, on his own, also made a reference to the District Valuation Officer, I. T. Department at Kolkata, for his expert comments in the matter. No communication was....
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....ation) [1974] 93 ITR 505 has been relied upon by Shri Bhuyan. 7. Shri Bhuyan has further submitted that the provisions of section 158BB of the Act, as prevailing on the date of the assessment order, i.e., November 21, 2000, would govern the instant matter and the amendment of section 158BB brought about by the Finance Act of 2002, though with retrospective effect from July 1, 1995, will not apply to the present case. Relying on the provisions of section 158BB, prior to its amendment by the Finance Act of 2002, Shri Bhuyan has submitted that the materials relied upon by the Assessing Officer in making the assessment of undisclosed income need not be connected with the materials found in the course of the search and such materials may be independent of the search. 8. In so far as the issue with regard to disallowable travelling expenses is concerned, Shri Bhuyan has submitted that in the course of the search certain items of expenditure claimed to be business expenditure and incurred against the credit cards of the partners and officers of the assessee were found to be relatable to personal expenditure of such persons. Therefore, according to Shri Bhuyan, the learned Tribunal ought....
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....eriod continued to remain. It is only after the aforesaid amendment made in the year 2003 that the earlier assessment stands abated and the Assessing Officer has been empowered to make fresh assessment of income inclusive of undisclosed income. Dr. Saraf has further pointed out that the precedents cited on behalf of the appellant are cases involving regular assessments and not assessment of undisclosed income. Dr. Saraf has also relied upon two decisions of the Delhi High Court in the case of CIT v. Manoj Jain reported in [2007] 287 ITR 285 and CIT v. Ashok Khetrapal reported in [2007] 294 ITR 143 to contend that undisclosed income cannot be assessed on the basis of any evidence or materials not discovered /known in the course of the search and otherwise unconnected with the search. In this regard, reliance has been placed on the decision of the Madhya Pradesh High Court in the case of CIT v. Khushlal Chand Nirmal Kumar reported in [2003] 263 ITR 77. 10. In so far as the issue with regard to the addition of disallowable travelling allowances is concerned, Dr. Saraf has pointed out that the entirety of the said expenditure was reflected in the books of account of the assessee which....
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.... of books of account or documents and such other materials or information as are available with the Assessing Officer. As reduced by the aggregate of the total income, or, as the case may be, as increased by the aggregate of the losses of such previous years, determined,-" After amendment "158BB. (1) The undisclosed income of the block period shall be the aggregate of the total income of the previous years falling within the block period computed, in accordance with the provisions of this Act, on the basis of evidence found as a result of search or requisition of books of account or other documents and such other materials or information as are available with the Assessing Officer and relatable to such evidence, as reduced by the aggregate of the total income, or as the case may be as increased by the aggregate of the losses of such previous years, determined,- ..." 13. A reading of the provisions of section 158BB, as it existed before and after amendment, amply discloses that even prior to the amendment, section 158BB authorised the Assessing Officer to make an assessment of undisclosed income on the basis of evidence found as a result of "search... and such other materials or ....