SANJIV KHANNA, J.

Afore-stated appeals under Section 260-A of the Income Tax Act, 1961 (‘Act’ for short) have been preferred by the Revenue, the Commissioner of Income Tax, Delhi (Central)-III.

2. ITA No.169/2005 challenges order of the Income Tax Appellate Tribunal (the Tribunal, for short) in IT(SS)A. No.52/Delhi/2003 dated 19th January, 2003 deleting addition of Rs.61,80,000/- as undisclosed income on merits and also on the ground that this addition could not have been made in the Block Assessment Order for the period from 1st April, 1989 to 15th January, 2000.

3. ITA No.895/2008 arises from order of the Tribunal dated 12th October, 2007 in IT(SS)A No.400/Del/2005, whereby the Tribunal has deleted the penalty imposed by the assessing officer under Section 158 BFA (2) of the Act on the ground that the additions made in the Block Assessment Order were set aside by the Tribunal vide order dated 19th January, 2003.

4. By order dated 23rd May, 2005 ITA 169/2005 was admitted and the following substantial question of law was framed:-

“Whether the Income Tax Appellate Tribunal was correct in law in deleting an addition of Rs.51,00,000/- being the undisclosed income although the assessee himself admitted in his statement before the Income Tax Authorities that he had paid money to buy these gifts?”

5. By order dated 6th September, 2010 ITA 895/2008 was admitted and the following substantial question of law was framed for consideration, with the direction that the two ITAs would be heard together:-

“Whether the ITAT was correct in law in deleting an addition of Rs.51,10,000/- being the undisclosed income although the assessee himself admitted in his statement before the Income Tax Authorities that he had paid money to buy these gifts?”

6. With the consent of counsels for the parties, we had reframed the substantial question of law vide order dated 31st October, 2017 to the following effect:-

"1. Whether the Income Tax Appellate Tribunal was correct in law in deleting the addition of Rs.51,00,000/- (Rupees Fifty One Lacs) as undisclosed income and accepting the case of the assessee that he has been able to establish genuineness of the gift?

2. Whether the Income Tax Appellate Tribunal was right in holding that the Assessing Officer could not have added the income of Rs.51,00,000/- as undisclosed income in the Block assessment proceedings under chapter XIV B of the Income Tax Act, 1961?"

It was also clarified in the said order that the first question includes the issue whether the decision and reasoning of the tribunal is perverse or not. Substantial questions of law primarily relate to and arise in ITA No.169/2005. Decision in ITA No.895/2008 would be consequential to the decision of this Court in ITA No.169/2005. The substantial question of law in ITA No. 895/2008 should appropriately read as under:-

“Whether ITAT was correct in law in deleting the penalty imposed by the Assessing Officer under section 158 BFA(2) of the Act”

7. Search and seizure operations under Section 132 of the Act were conducted on 25th November, 1999 in the case of BSL Group and Mr. M.S. Aggarwal, who has been hereinafter referred to the respondent/ assessee.

8. During the course of search, several incriminating documents and material were found and seized. The respondent /assessee was carrying on benami business in the name of M/s. Universal Enterprises, M/s. Vishal Vyapar, M/s. Kumar Traders, M/s. Nutan Enterprises, M/s. Krishna Traders and M/s. Evergreen Corporation, which were not accounted for and reflected in the books of accounts. These firms were trading in acrylic sheets, off-cuts and scrap. As per the Revenue on the basis of the papers and documents found during search, these benami entities belonging to the respondent/assessee had unaccounted for turn-over of over Rs.26,35,25,144/-.

9. Respondent /assessee in his statement recorded on oath under Sect