Law:

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Section 69 of the Income-tax Act, 1961 - Unexplained investments Where addition is sought to be made on basis of materials seized during raid, in case the explanation of the assessee is to be disbelieved, the Assessing Officer should have some material to rebut same, mere conjectures and surmises cannot form basis for making additions. [Block Period 1988-89 to 1998-99] During the course of search, certain incriminating documents were found and seized. While framing the assessment for the block period, certain additions were made on various accounts. The Tribunal upheld the order of the Commissioner (Appeals) deleting the additions made by the Assessing Officer on account of the alleged unexplained investment in the purchase of plots, properties, construction of house and purchase of jewellery: Held that as far as the addition on account of alleged investment in the purchase of other valuable was concerned, the Tribunal followed an earlier order passed by it in the case of one D wherein it was held that in case the explanation of the assessee was to be disbelieved, the Assessing Officer should have some material to rebut the same. Mere conjectures and surmises cannot form the basis for making additions. A circular issued by the Central Board of Direct Taxes bearing No. 347(E), dated 20-5-1978 was also relied upon. In view of that the order of the Tribunal was to be upheld. JUDGMENT Rajesh Bindal, J.-The Revenue has approached this court by filing the present appeal, raising the following substantial questions of law, arising out of the order dated February 3, 2006, passed by the Income-tax Appellate Tribunal, Delhi Bench "C", New Delhi (for short, "the Tribunal"), in I.T.A. (SS) No. 7(Delhi)/2001, for the block period 1988-89 to 1998-99 : "1. Whether, on the facts and in the circumstances of the case, the learned Income-tax Appellate Tribunal was right in law in confirming the order of the Commissioner of Income-tax (Appeals) in deleting the addition of Rs. 21,00,094 made by the Assessing Officer on account of unexplained investments made by the assessee in the purchase of plots, properties and construction of house on the basis of seized documents ? 2. Whether,…

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