Gist of Decision: Under s. 158BB, the procedure for computing the undisclosed income of the block period has been given. It provides that 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 the result of search or requisition of books of account or other documents and such other materials or information as are available with the AO and relatable to such evidence with certain other conditions.
The emphasis has been given for determination of total income on the basis of evidence found as the result of search or requisition of books of account or other documents and such other materials or information as are available with the AO and relatable to such evidence. It is not in dispute that in the search conducted on 25th Sept., 1996, certain papers were found marked as “B-1/23” which showed receipts of Rs. 6,670, Rs. 85,820 and Rs. 72,915. However, there was no material to show that any other income which may have been concealed and any undisclosed assets have been found in the search. Therefore, best judgement assessment, which had been made on the basis of search alone, could not have been made as the block assessment in case of search has to be confined to income attributable to the material and evidence found therein or other information available with the AO relating to such materials. If the AO had come to the conclusion that some other income of the assessee (unconnected with the materials found at the time of search) has escaped assessment, he is at liberty to initiate the proceedings under s. 147/ 148 in accordance with law. Tribunal was therefore justified in holding that since no hidden assets, movable or immovable, had been found, the assessee could not be expected to have made a fortune of unaccounted professional receipts.