2004 (6) TMI 234

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.... years of block period will not form part of undisclosed income, ignoring the provisions of s. 158BB(1)(c) of the IT Act, 1961. 3. That the learned CIT(A) has erred in law and on facts in holding that (i) undisclosed income should necessarily reflect towards the undisclosed assets, expenses and investment found during the search, (ii) no incriminating documents or material were found in search at the residence of the assessee and the undisclosed income of the assessee has been arbitrarily calculated on the basis of day books maintained by other person; and (iii) the undisclosed income of the assessee is not computed on the basis of seized martial, but estimated, ignoring the provision of s. 158BB(1) of the IT Act, 1961, and facts mention....

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....g home of Dr. A.K. Varshney for which was getting separate fees. On 7th Oct., 1997, the assessee's residence and physiotherapy centre were searched under s. 132 of the Act, when nothing incriminating was detected. 3.2 Notice under s. 158BC of the Act was issued on 24th July, 1998, which was served on 7th Aug., 1998. The assessee filed return of block period disclosing undisclosed income at Rs. nil on 18th Sept., 1998. 3.3 The AO proceeded with assessment proceeding by observing as under: "During the search proceedings, no documents were seized or found on the basis of which the income of the assessee may be computed. Therefore, the papers seized in the case of other persons and statements recorded at the time of search have to be m....

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....t. CIT (2000) 66 TTJ (Jp) 305 : (1999) 9 ITC 344 (Jp). It will be seen that AO has accepted the explanation of the appellant regarding source of acquisition of all the assets. No incriminating documents or material were found in search at the residence. She has fully explained the source of expenses incurred on acquiring assets and for incurring expenses on household. Her husband was also earning and supporting the family. Her salary was duly accounted for in the books of accounts of Dr. Varshney at whose premises main search was conducted. She had duly filed evidence regarding earning of income from patients to whom she rendered service, in the shape of patient register maintained by the doctor. Thus, considering the case from all angle....