S. RAVINDRA BHAT, J.

1. This batch of appeals under Section 260-A of the Income Tax Act (“the Act” hereafter) and writ petitions arise from scrutiny assessments made pursuant to a search and seizure operations conducted in 1995. The assessees are aggrieved in one batch of matters; the Revenue claims to be aggrieved, in two appeals. The essential facts are narrated below, after which individual grounds urged in the various appeals and writ petitions would be dealt with.

2. The main assessee/appellant, Ashok Chawla (hereafter called by his name) had served in the Indian Army from which he retired in 1984 and went on to found M/s. Centaur Helicopter Services (P) Ltd (hereafter “Centaur”) with him and his wife as its directors. Centaur was an authorized dealer of M/s. Schweizer Aircraft Corporation USA (“Schweizer” hereafter) for purchase and sale of its helicopters in India. Ashok Chawla was also consultant to M/s. Capitex Impex (P) Ltd. for manufacture of leather goods. The Revenue had claimed or rather suspected that Ashok Chawla used to earn income from defense deals and contracts, which he did not account for in his income tax returns and he instead claimed to be an army pensioner and salary income earner from Centaur. On 31st August, 1995, a search and seizure operation was carried out by the Revenue in his premises as well as those of his companies, concerns and individuals associated with him. This resulted in seizure of several documents, cash and other materials.

3. Ashok Chawla and others who received notices, pursuant to the search, filed block returns for the period AY 1985-1995. Ashok Chawla declared undisclosed income to the extent of Rs. 39,86,916/-. In the assessment order by the Assessing Officer (AO), the income assessed for the block period that was brought to tax was Rs. 17,77,29,193/-. Ashok Chawla’s appeals to the Income Tax Appellate Tribunal (ITAT) failed; it dismissed his appeals by the impugned order, dated 26th December 2006. That impugned order is the subject matter of challenge in ITA 495/2007. Initially, the validity of search proceedings had been challenged in a writ petition, W.P.(C) 1518/1997, which was disposed of by an order dated 1st August, 2001, which expressed the opinion that since the issues concerned were factual, the ITAT ought to consider and return findings on them. The ITAT, in its impugned order, held that it lacked competence to examine the validity or legality of search and seizure. Therefore, Ashok Chawla, in a freshly filed writ petition (W.P.(C) 4299/2007) questions the validity and legality of search and seizure proceedings, on diverse grounds, including that it was motivated by legal malice, mala fides, tainted inasmuch as it was premised upon the information of a former partner and his ability to bring about pressure, and technical grounds such as improper search in the absence of proper witnesses and lastly, that the assessment order was made by the officer who searched the premises. Ashok Chawla has also challenged the order of the ITAT, declining his application for rectification of its main order in his appeal (in his application MA 57/Del/2007 before the tribunal) by filing W.P.(C) 3517/2011.

4. The additions that were the subject of Ashok Chawla’s appeals were discussed in relation to Ground Nos. 5 to 16. These were on account of various materials seized during the search and seizure operations listed below:

(1) A slip of paper which contained the description of an account (No. 53745) with Discount Bank Trust Co, Switzerland (Discount Bank, for short);

(2) Visiting card of Dr. VRS Fricker, Vice President of Discount Bank;

(3) Telephone bills containing a record of several calls between Ashok Chawla and Dr. Fricker;

(4) A typed telex addressed to Fricker which instructed the latter to transfer US $ 40,000 to an account with National Westminster Bank and for also