Judgment L. Narasimha Reddy, J. The petitioner is a dealer in machinery relating to bore-well, at Secunderabad and is assessed to income tax. A raid was conducted in the business premises of the petitioner and those of its associate establishments, on 13.12.1995. The procedure under Chapter XIV-B of the Income Tax Act, 1961 (for short ‘the Act’), was invoked. The block assessment covering the assessment years 1985-86 till 13.12.1995 was made. The Assessing Authority passed an order on 31.12.1996, imposing certain amount of tax, upon the undisclosed income. The petitioner approached the Settlement Commission at Chennai, the 1st respondent, under Section 245D of the Act. Through its order, dated 11.02.2002, the 1st respondent determined the undisclosed income for the block period at Rs.1,36,52,701/- and imposed tax at 60%, aggregating to Rs.81,91,620/- The petitioner challenges the said order. Sri S.Dwarakanath, learned counsel for the petitioner, submits that the 1st respondent did not take into account, the relevant provisions of Chapter XIV-B of the Act and has disallowed several deductions, which are otherwise permissible in law. He contends that though the accumulated losses and carried forward, depreciations were referable to the block period, subsection (4) of Section 158BB of the Act, was invoked to disallow them. Learned counsel submits that the said provision gets attracted only when there exist the unabsorbed losses or carried forward depreciation, that have spilled over beyond the block period, and not otherwise. He has placed reliance upon the judgment of the Supreme Court in E.K.Lingamurthy v. Settlement Commission (Income Tax and Wealth Tax) (2009) 314 ITR 305 (SC). Sri J.V.Prasad, learned counsel for the respondents, on the other hand, submits that the scope of determination under Section 245D of the Act is limited and it cannot be said to be the adjudication by the Authority under the Act. He contends that though the 1st respondent was entitled to reject the claim, if the disclosures made by the petitioner were not to its satisfaction, the application was entertained and a detailed reasoned order was passed. He submits that the order passed by the 1st respondent completely accords with Chapter XIV-B and no exception can be taken to it. On the basis of the search conducted on 13.12.1995 in the establishments of the petitioner, a block assessment has been made. Chapter XIV-A of the Act prescribes a detailed procedure to be followed in this regard. He submits that the order passed by the 1st respondent completely accords with Chapter XIV-B and no exception can be taken to it. On the basis of the search conducted on 13.12.1995 in the establishments of the petitioner, a block assessment has been made. Chapter XIV-A of the Act prescribes a detailed procedure to be followed in this regard. As a first step, the ‘undisclosed income’ is to be ascertained. This expression is defined under Section 158B(b) of the Act. The determination thereof is provided for under sub-section (1) of Section 158BB. It reads: “158BB. Computation of undisclosed income of the block period.- (1) The undisclosed income of the block period shall be the aggregate of the total income of the previous years falling within the block period computed, in accordance with the provisions of this Act on the basis of evidence found as a result of search or requisition of books of account or other documents and such other materials or information as are available with the Assessing Officer and relatable to such evidence, as reduced by the aggregate of the total income, or, as the case may be, as increased by the aggregate of the losses of such previous years determined,- (a) … (remaining part of the Section is omitted as not necessary at present).” Once the undisclosed income is determined in accordance with the prescribed procedure, the tax has to be levied upon it. However, even in respect of block assessments, the regular procedure that is followed in respect of ordinary assessments is required to be applied. This is evident from Section 158BH, which reads: “158BH. Application of other provisions of this Act. However, even in respect of block assessments, the regular procedure that is followed in respect of ordinary assessments is required to be applied. This is evident from Section 158BH, which reads: “158BH. Application of other provisions of this Act. – Save as otherwise provided in this Chapter, all other provisions of this Act shall apply to assessment made under this Chapter.” The only saving to our mind, which is referable to Section 158BH, is the one under sub-section (4) of Section 158BB the provision reads as under: “For the purpose of assessment under this Chapter, losses brought forward from the previous year under Chapter VI or unabsorbed depreciation under sub-section (2) of Section 32 shall not be set off against the undisclosed income determined in the block assessment under this Chapter, but may be carried forward for being set off in the regular assessments.” A perusal of this indicates that, if an assessee, who has been subjected to search, has any unabsorbed loss or carried forward depreciation, obviously meaning the one which has spilled over the block period, it shall not be available to be adjusted or set off against the undisclosed income. Even while denying such a facility, the Act preserved such unabsorbed loss or carried forward depreciation, to be adjusted in the regular assessments. The record, in this case, is not clear as to whether there existed any unabsorbed loss or carried forward depreciation, that spilled over the block period of the writ petitioner. If there exists any such components, they are not liable to be adjusted. If, on the other hand, the losses or depreciations are those which are referable to the block period, they are liable to be worked out, as though it is a regular assessment which, in fact, is a mandate under Section 158BH of the Act. With this clarification, we dispose of the writ petition directing that the consequential order shall be passed keeping in view the aspects pointed out by us. There shall be no order as to costs. The miscellaneous petition filed in this writ appeal shall also stand disposed of.