Held, that there was a difference between undisclosed income and unexplained income which was apparently absent on the face of the show-cause notice. The very basis of invocation of jurisdiction under section 263 suffered from serious fallacies, that the unexplained income found and surrendered during the course of survey proceedings was sought to be brought to tax straightway under section 115BBE of the Act. There were no findings recorded by the Principal Commissioner whether any explanation was called for from the assessee in terms of these undisclosed transactions either during the course of survey proceedings or during the course of assessment proceedings and how the explanation offered was not found acceptable to the Principal Commissioner. There was no inquiry or investigation which had been conducted by the Principal Commissioner and there was no positive evidence brought on record why the deeming provision read with section 115BBE of the Act were applicable. The assessee had been asked specific questions not only regarding the discrepancy found during the course of survey and also the nature and source thereof during the course of survey. The nature of advances was unaccounted business advances and source of income surrendered was the assessee’s share of diagnostic laboratory fees received from S, who ran the diagnostic lab from the business premises of the assessee and had shared 70 per cent. of laboratory fees with the assessee which remained unaccounted and undisclosed at the time of survey. Though these transactions were not recorded at the time of survey qualifying as unrecorded transactions, the assessee had provided the necessary explanation about the nature and source of the unrecorded transactions and the necessary nexus with the assessee’s business had been established. Thus, it could not be said that these were unexplained transactions. The Assessing Officer had duly taken cognisance of the findings of the survey team, the documents found during the course of survey, the statement of S, the surrender letter and the return of income and after examination thereof and due application of mind, the income had been rightly assessed under the head “Business income”. There were no findings recorded by the Principal Commissioner how the deeming provisions were applicable and the order passed by the Assessing Officer was erroneous. Therefore, the order passed by the Principal Commissioner was set aside and that of the Assessing Officer restored.(AY. 2017-18)