K.S. Jhaveri, J.

1. By way of this appeal, the appellant-revenue has challenged the order dated 27/03/2008 passed by the ITAT in ITA No. 30/RJT/2005 whereby the appeal of the revenue came to be dismissed and confirmed the order dated 28/01/2005 passed by the CIT (Appeals), Rajkot.

2. The short facts of the case are that respondent was doing business of gold and a search operation was carried out under Section 132 of the Income Tax Act at the business and residential premises on 12/01/1999 and during the said search operation, gold weighing 28,116 Kg valued at Rs. 1,24,85,982/- was recovered from the residence of respondent and were dug out from the courtyard of the residence. Thereafter, notice under Section 158BC of the Act was issued and respondent-assessee filed the return of undisclosed income declaring undisclosed income of Rs. 13,75,334/- for the block period i.e. Assessment year 1989-90 to 1998-99 and upto 12/01/1999. The Assessing Officer completed the assessment and determined the undisclosed income at Rs. 3,97,51,081/- by an order dated 31/01/2001.

2.1 The respondent-assessee preferred an appeal against the order passed by A.O. before the Commissioner of Appeals wh