Where sum recovered during search was notreflected in books of account of assessee, same could be brought to tax asundisclosed income in block assessment even though regular assessment continuedseparately

Commissioner of Income-tax

v.

Kanti Bhai Damani

Section 68 of the Income-tax Act, 1961 - Cashcredit - Block period 1-4-1988 to 27-10-1998 - A search was conducted atpremises of assessee-agent and certain sum was found by search party - Inresponse to notice under section 158BC, assessee filed return declaring nilundisclosed income and submitted that said sum was not found but wasvoluntarily disclosed by him under VDIS, 1997 - Assessing Officer found thatsaid sum was not reflected in assessee's books and treating same as undisclosedincome of assessee, made addition - However, Assessing Officer had also made anaddition of similar amount on protective basis - Therefore, Tribunal held thatsaid addition could not be made in block assessment proceedings though itopined that in view of time gap between voluntary disclosure and date of searchsaid amount could not be attributed to voluntary disclosure - Division Bench of Calcutta High Court in Dy. CIT v. Shaw Wallace & Co. Ltd. held that both regular assessment and block assessment can becontinued separately - Whether in view of said decision and factual positionthat said sum had been found at time of search, addition of same as undisclosedincome was justified - Held, yes [In favour of revenue]