R.S. Syal, A.M.: These two cross-appeals one by assessee and other by Revenue arise out of order passed by CIT(A) on 30th Jan., 2003 for block period comprising of asst. yrs. 1990-91 to 1999-2000 and upto 29th July, 1999. First we will take up appeal of assessee. This appeal is time-barred by 200 days. We have considered prayer for condonation of delay as per which appeal was prepared and appeal fee was also deposited in time. appeal was handed over to Munshi of advocate for dispatching who kept it in office file and due to illness and long absence from office appeal remained undispatched. It was only subsequently that this fact came to notice and appeal was promptly filed. We are satisfied with reasons for delayed presenting of appeal. Accordingly, we condone delay and take up appeal for hearing. assessee has raised additional ground as under: "That there is no justification in charging surcharge in assessment under s. 158BC prior amendment in s. 113 w.e.f. June, 2006. surcharge in case of appellant be deleted." Since issue raised in this additional ground is legal one, not requiring any probing of fresh facts, we are satisfied that this additional ground deserves to be admitted. We order accordingly. We have heard both sides and perused relevant material on record. Insofar as additional ground is concerned, we find that issue is squarely covered in favour of assessee by order passed by Special Bench of Tribunal at Hyderabad in Merit Enterprises vs. Dy. CIT (2006) 102 TTJ (Hyd)(SB) 748: (2006) 101 ITD 1 (Hyd)(SB) in which it was held that proviso to s. 113 relating to surcharge on undisclosed income in block assessment, which was inserted w.e.f 1st June, 2002 is substantive provision and has no retrospective operation. Since in instant case search was conducted on 29th July, 1999, which falls before stipulated date, we are of considered opinion that levy of surcharge cannot be sustained. We order accordingly and hold that surcharge in this case cannot be levied and learned CIT(A) was not justified in sustaining its levy. This ground is allowed. Ground Nos. 2 to 4 were not pressed by learned Authorised Representative which are hereby dismissed. only other effective ground, which survives for our consideration is against confirmation of addition of Rs. 80,000 on account of unexplained cash. Facts apropos of this ground are that search action was taken upon assessee on 29th July, 1999 during course of which certain incriminating material was found. total cash of Rs. 1,56,600 was found in course of search, which consisted of Rs. 1,33,600 from room of Shri Sher Mohammad, that is assessee and Rs. 23,000 from another room. Only sum of Rs. 80,000 was seized. During course of assessment proceedings, assessee explained source of total cash found at time of search of which AO accepted it except Rs. 80,000, which was claimed to be out of cash sales not recorded in books. It was claimed that assessee and his brother Shri Mehboob Ali had made sales outside books of account in their respective concerns and cash to extent of Rs. 80,000 emanated from such undisclosed sales. AO did not accept assessee s contention on ground that such claim was not made in course of search. He, therefore, made addition of Rs. 80,000, which came to be confirmed in first appeal. We have heard both sides and perused relevant material on record. I t is evident from assessment order that short stock of Rs. 2,36,655 was found in case of assessee on account of which AO made addition of Rs. 2,55,843 by also including amount of GP. learned CIT(A), in first appeal upheld addition to extent of GP rate on sales made outside books of account, which implies that factum of sales made outside books of account by assessee has been brought on record to tune of Rs. 2,36,655. Naturally, when sale has been made outside books of account, its proceeds would be available with assessee in one form or other. It is not case of Revenue that said sale proceeds were utilized anywhere else. Thus explanation of assessee that cash of Rs. 80,000 emanated from sale proceeds of short stock cannot be disbelieved. By overturning impugned order on this score, we order for deletion of this addition. This ground is allowed. First ground of Revenue s appeal is against direction to AO for making addition only for profit element in unrecorded sales. It is obvious that when purchases are included in books of account and sale is made outside books of account, which represents short stock, it is only profit element that can be put to tax and not entire sale proceeds. Numerous orders have been passed all over India by various Benches of Tribunal to this extent. We, therefore, hold that learned CIT(A) was justified in allowing relief of Rs. 2,36,655. This ground is not allowed. Second ground is against direction of learned CIT(A) to adopt local PWD rates by scaling down CPWD valuation by 20 per cent and also to allow 10 per cent deduction for self-supervision. assessee had constructed house, which was valued by DVO at Rs. 5,31,000 out of which, investment of Rs. 2,52,000 was treated as explained and remaining amount of Rs. 2,79,000 was unexplained. Against this, assessee himself surrendered sum of Rs. 2 lakhs. learned CIT(A), by relying on orders passed by Tribunal including case of Ravi Mathur & Ors. vs. Asstt. CIT 27 Tax World 289, held that only PWD rates were to be applied. Accordingly he scaled down investment by 20 per cent. He further allowed deduction @ 10 per cent on account of self-supervision. After hearing both sides and perusing relevant material on record, w e do not find any reason to interfere in impugned order on this score because Jodhpur Bench of Tribunal has also held in several cases that valuation can be done only on basis of PWD rates and if valuation has been made on basis of CPWD rates, then deduction of 20 per cent should be allowed to scale down valuation from CPWD to PWD rates. Similar is position regarding allowing 10 per cent self-supervision allowance, which is consistent view of Jodhpur Bench of Tribunal. We, therefore, hold that learned CIT(A) was justified in allowing these two reliefs. This ground is also dismissed. In result, appeal of Revenue is dismissed and that of assessee is partly allowed. *** SHER MOHAMMAD v. DEPUTY COMMISSIONER OF INCOME TAX (INV.)