DIPAK MISRA, J.

1. In this appeal preferred under Section 260A of the Income Tax Act, 1961 (for short the Act), the challenge is to the order dated 20.01.2006 passed in I.T.A. NO. 70/Pat/2004 for the block period 90-91 to 2000-01.

2. A search and seizure operation was conducted at the residential premises of the respondent-assessee at Ranchi and Delhi on 13.01.2000 under Section 132(1) of the Act. During the search and seizure certain loose sheets and documents were found and those were seized. Those documents indicated assessees investment in immoveable properties and foreign exchange dealings. A notice under section 158BC of the Act was issued on 15.09.2000 and served on the assessee requiring him to file a true and correct return of the total income. The assessee filed his return for the block period 01.04.1999 to 13.01.2000 by indicating that the total undisclosed income is Rs. 5,17,000/- Thereafter, the assessing officer took up the assessment and determined the total income for the block period at Rs. 4,98,47,849/-. A sum of Rs. 69,23,564/- has been lessened as per Section 158BC of the income disclosed in the return of the income filed before search

3. The assessee being dissatisfied preferred an appeal.The appellate authority dealing with the factum of deduction under Section 158BC of the Act held as follows:

"22. I have considered the facts relating to this asset. I have also perused the case laws cited by the appellant and also the judgment of Honble High Court of Bombay reported at 247 ITR 448. However, even before considering the merit of the issue, I find that the asset has been declared by the appellant in his regular return for the related year. His two sons have shown this asset in their returns for AY 1998-99 which were filed before the search. Certificate u/s 230A was applied for before the search and was obtained. This asset was not, therefore, undisclosed nor was is detected as a result of the search. This asset, therefore, has to be considered in the regular assessments of the concerned persons and cannot be considered in block assessment following the judgment of Honble High Court of Delhi in the case of LR Gupta V/s. Union of India on (194 ITR 32) and the judgment of Honble High Court of Calcutta in the case of Bhagwati Prasad Kedia V/s. CIT (248 ITR 562). In this view of the matter, so far as this block assessment is concerned, the addition of Rs. 41,85,000/- is deleted.

23. Similarly, the additions relating to properties at Sainik Farm Meharauli (Rs. 43,55,000/-), B-30, Swami Nagar, New Delhi (Rs. 2,94,43,425/-), E-195, Greater Kailash, New Delhi (Rs. 1,00,000/-), B-41 & 42, West Vinod Nagar, New Delhi (Rs. 4,35,160/-) and 61B, Sainik Farm, New Delhi (Rs.24,41,700/-) are also deleted from this block assessment as these assets have been declared to the Department before the search and as the same have to be examined in regular assessments."

4. Being dissatisfied with the order, the assessee preferred an appeal before the tribunal. The tribunal being of the view that the first ground is general dismissed the same. The tribunal dealt with the second ground as under:

"3. Second ground reads as under: -

"For that in the facts and circumstances of the case the Id. CIT(A) is not justified in confirming the addition of Rs.10,90,800/- made by the assessing officer as undisclosed bank deposit. It is erroneous to hold that the deposits in the bank account owned and held by Sanjay Kumar Mangalam and Vijay Kumar Mangalam aggregated to Rs.10,90,800/- during the period relevant to the assessment year 1993-94, 1995-96 and 1996-97 was undisclosed and remain undisclosed and was thus undisclosed income of the assessee. The evidences and explanation furnished have been brushed aside. The Assessing Officer has made this addition on account of the following credits in the bank accounts of Shri Sanjay Kr. Mangalam and Shri Vijay Kumar Mangalam, sons of the assessee:

SI. No. Name of the a/c holder Account No. & Bank D