Search and seizure: Block assessment: Section 158BC; Block period 01-04-1986 to 26-06- 1996: Undisclosed income to be determined on basis of evidence found during search: Cannot be computed on the basis of best judgment:

The assessee was a practicing medical doctor having different sources of income such as income from agricultural activities, medical profession and pathology. On 25-09-1996, a search u/s. 132 at the residential premises of the assessee was simultaneously conducted with a survey u/s. 133A at his business premises where an x-ray clinic and blood bank were located. During the survey a register marked pertaining to the blood bank was found and seized. Another register pertaining to x-ray was also seized. No search was conducted at the business premises of the assessee from where these registers were impounded. The assessing Officer made an assessment u/s. 158BC of the Act, of the assessee’s undisclosed income for the block period making additions pertaining to the blood bank and x-ray. The Tribunal deleted the addition.

On appeal, by the Revenue, the Allahabad High Court upheld the decision of the Tribunal and held as under:

i) Undisclosed income of the block period has to be determined 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 with certain other conditions. It is not open to the Assessing Officer to compute the income on the basis of best judgment.

ii) A search was conducted at the residential premises of the assessee and survey was conducted at the business premises. During the search, no cash, bullion, jewellery or any material was found, which could be considered as undisclosed income.

iii) The additions were made on estimate basis after seizing the register from the business premises of the assessee. The Tribunal was justified in deleting the addition.”