Issue before court:
- Whether undisclosed income can be taxed in the hands of assessee does not belong to block period.
- Whether addition can be made relying on undated & unsigned documents seized during search without proper enquiry by AO.
Brief Facts:
- A search and seizure proceedings were conducted on 28.2.2007 in the assessee’s premises. Notice u/s 153 A was issued and assessee filed return in response to notices for the AYs 2002-03, 2003-04, 2004-05, 2005-06.
- AO made additions of Rs. 3.64 crores and Rs. 20 lakhs, on the basis of some loose papers and chit, alleged to be property related transactions again not reported by the assessee. The CIT(A) and ITAT concurrently ruled with respect to the second amount (i.e. Rs. 20 lakhs) that since the transactions related to the time period 1999-2000, the addition was time-barred, besides overturning it on the merits.
- AO again determined salary of the assessee at higher amount relying on a letter/ e-mail sized document seized during search operation on which no sign and date was mentioned. AO on relying upon the seized documents made various additions in different AYs.
- On appeal CIT (A) after examining facts held that the document seized cannot be exclusively relied upon to make additions.
Contention of the revenue:
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