1998 (2) TMI 142

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....Dhuleshwar Road, Bombay-2. A notice under s. 158BC was issued by the Asstt. CIT (Inv.), Cir-1(1), Surat. Return of income for the block period was filed on 14th Feb., 1996 disclosing the total undisclosed income of Rs. 25 lakhs. The AO after scrutiny of the material found during the course of search worked out the total undisclosed income at Rs. 45,75,190 as under: . . Rs. A. For the period 1st April, 1995 to 6th Dec., 1995 16,81,931 B. For the period 1st April, 1995 to 31st March, 1995 26,84,652 C. Cash found during the earlier search on 8th Oct., 1994 1,77,000 3. Though a number of grounds have been raised before us the assessee disputes mainly the addition of Rs. 26,84,652 referred to supra. During ....

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....'s reliance on this circular is appreciated. Concealed income of the block period is being calculated accordingly. In the instant case the incriminating papers had been found pertaining to asst. yr. 1995-96 as well as for the period 1st April, 1995 to 6th Dec., 1995. Hence, estimation is being done for this period only." 4. Shri S.N. Soparkar, the learned counsel for the assessee submitted that though the learned AO took note of the contents of the above noted circular, he failed to realise that only two papers for a sum of Rs. 10,000 and Rs. 20,000 referable to this period, i.e., Dec., 1994 were found by the search party and were relating to the transactions on which commission could be treated as the income of the assessee. The commiss....

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.... assessee squarely stands covered by the Circular No. 717—Explanatory Notes of the CBDT referred to supra. It is pertinent to note that though the learned AO has taken note of the said circular and has also "appreciated" its contents, but yet made an astronomical addition of Rs. 26.84 lakhs on pure presumptions and assumptions. In the case of Sundar Agencies the Hon'ble Tribunal, Mumbai Bench has held as under: "Whether within pale of Chapter XIV-B assessment could be made only in respect of undisclosed income and such undisclosed income must come as a result of search—Held, yes—whether s. 158BC does not provide a licence to Revenue for making roving enquiries connected with completed assessment and is beyond power of AO to review ....