Per Abdul Razack, Judicial Member - The assessee assails the block assessment order passed by the Assessing Officer under section 158BC(c) of the Act dated 31-10-1996.

2. The appellant-assessee is proprietor of M/s. Christy Fried Gram and engaged in manufacturing and supplying weaning food under TINP for which he obtained contracts. Search operations on 17-10-1995 were conducted on the assessee and continued upto 3-11-1995. During the course of search operations a statement on oath from the assessee was recorded under section 132(4) of the Act. In answer to question No. 16 the assessee submitted that he has invested Rs. 15,85,000 in purchase of immovable properties and Rs. 10,15,000 in purchase of movables. He also stated that contract expenses to the extent of Rs. 50 lakhs have not been written in accounts and that he will declare Rs. 1.11 crore for the assessment years 1995-96 and 1996-97 by filing the returns and paying income-tax also. The Assistant Director of Inspection also took an oath statement from the assessee on 4-12-1995. The copies of oath statements translated in English have been placed in the paper book filed on 25-6-1997 from pages 2 to 11.

3. On the basis of search operations, the Assessing Officer issued a notice on 24-7-1996 under section 158-BC of the Act directing him to file a return for the block period of 10 years giving 15 day’s time in respect of undisclosed income. After the issue of notice under section 158BC read with section 142(1) of the Act, the Assessing Officer conducted enquiries on the basis of seized materials and also called for certain other documents and papers and other related information to enable him to complete the block period assessment of undisclosed income of the assessee. The assessee filed the block period return on 7-10-1996 returning undisclosed income of Rs. 1,06,92,950 the details of which are as under :

The Assessing Officer discussing various aspects of the case in his lengthy order running to 15 typed pages has stated in more than one place that the account books recovered during the course of search operations were not maintained in the normal course and therefore, the undisclosed income cannot be computed on the basis of the seized accounts. At page 11 in para 9 of the impugned order the Assessing Officer has stated that the sales figures available from 1-4-1990 to 17-10-1995 are to the tune of Rs. 28,59,37,287. In the same para 9 at page 11 of the impugned order the Assessing Officer has stated that it is not possible to rely on the books of account and documents filed by the assessee and as discussed earlier in the impugned order the account books are not complete and are irregular and cannot be relied upon for making the block period assessment. The Assessing Officer has further stated at page 11 of the impugned order that the profit and loss account and balance-sheet also cannot be accepted as correct. Taking all these facts and circumstances into account the Assessing Officer computed undisclosed income for the period from 1-4-1995 to 17-10-1995 in a sum of Rs. 1,05,74,253. The detailed working of which has been given at page 13 of the impugned order and which we deem it fit to reproduce as below :—

The Assessing Officer during the course of