Sri R.Dhandapani, Dharapuram V. ACIT, Erode

ITSSA 1/CHNY/2010

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 2522 (ITAT-CHENNAI)
• Duration Of Justice: 6 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-11-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 09-09-2016
• Assessment Year: misc
• Appeal Filed On: 22-01-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DURAI
• Assessee Lawyers: G BASKAR
• Keywords: Block assessment

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , !' .$%$&, ( ') BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER I.T.(SS) A. NO.1/MDS/2010 BLOCK ASSESSMENT PERIOD : 01.04.1985 TO 11.06.199 6 SHRI R. DHANDAPANI, 55, KANNAN NAGAR, UDUMALAIPET ROAD, DHARAPURAM 638 656. PAN : AACPD 1537 K V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE II, ERODE. (+,/ APPELLANT) (./+,/ RESPONDENT) +, 0 1 / APPELLANT BY : SHRI G. BASKAR, ADVOCATE ./+, 0 1 / RESPONDENT BY : SHRI DURAI PANDIAN, JCIT 2 0 3( / DATE OF HEARING : 09.09.2016 456 0 3( / DATE OF PRONOUNCEMENT : 30.11.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF ASSESSMENT DATED 23.12.2009 AND PERTAINS TO BLOCK P ERIOD 01.04.1985 TO 11.06.1996. 2. SHRI G. BASKAR, THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE FIRST ISSUE ARISES FOR CONSIDERATION IS VA LIDITY OF THE BLOCK 2 I.T.(SS) A. NO.1/MDS/10 ASSESSMENT MADE UNDER SECTION 158BC OF THE INCOME-T AX ACT, 1961 (IN SHORT 'THE ACT'). THE LD.COUNSEL SUBMITTE D THAT HE IS NOT PRESSING THIS ISSUE AND HENCE WITHDRAWING THE SAME. THE LD. DEPARTMENTAL REPRESENTATIVE DID NOT HAVE ANY OBJECT ION IN THE ASSESSEES WITHDRAWING THIS ISSUE. IN VIEW OF THE ABOVE, THE ISSUE RELATING TO VALIDITY OF THE ASSESSMENT IS DISMISSED AS NOT PRESSED. 3. THE NEXT ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO ADDITION OF ` 60,000/- ON ESTIMATION TOWARDS PERSONAL DRAWINGS. 4. SHRI G. BASKAR, THE LD.COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSING OFFICER ESTIMATED THE PERSONAL D RAWINGS AT ` 60,000/- WITHOUT ANY SEARCH MATERIAL. THIS BEING T HE BLOCK ASSESSMENT UNDER SECTION 158BC OF THE ACT, ACCORDIN G TO THE LD. COUNSEL, THE ASSESSING OFFICER HAS TO CONFINE HIMSE LF ONLY TO THE MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATIO N. IN THE ABSENCE OF ANY MATERIAL, ACCORDING TO THE LD. COUNS EL, THE ADDITION MADE BY THE ASSESSING OFFICER IS NOT SUSTAINABLE. 5. ON THE CONTRARY, SHRI DURAI PANDIAN, THE LD. DEP ARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSING OFFICE R ESTIMATED THE PERSONAL DRAWINGS AT ` 60,000/-. EVEN THOUGH NO SEARCH MATERIAL 3 I.T.(SS) A. NO.1/MDS/10 WAS FOUND DURING THE COURSE OF SEARCH OPERATION, AC CORDING TO THE LD. D.R., THE ASSESSEE MIGHT HAVE INCURRED CERTAIN EXPENDITURE FOR MAINTENANCE. THEREFORE, THE ASSESSING OFFICER HAS RIGHTLY ESTIMATED THE PERSONAL DRAWINGS AT ` 60,000/-. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THIS IS A BLOCK ASSESSMENT UNDER SECTION 158BC OF THE AC T. SECTION 158BB(1) OF THE ACT SPECIFICALLY SAYS THAT UNDISCLO SED INCOME FOR THE BLOCK PERIOD HAS TO BE COMPUTED ON THE BASIS OF EVIDENCE FOUND DURING THE COURSE OF SEARCH OPERATION OR THE INFORM ATION WHICH IS RELATABLE TO THE EVIDENCE FOUND DURING THE COURSE O F SEARCH OPERATION. IN THIS CASE, THERE IS NO EVIDENCE FOUN D DURING THE COURSE OF SEARCH OPERATION. IN THE ABSENCE OF ANY EVIDENCE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ESTI MATED ADDITION OF ` 60,000/- TOWARDS PERSONAL DRAWINGS IS NOT JUSTIFIED . ACCORDINGLY, THE ORDER OF THE ASSESSING OFFICER IS SET ASIDE AND THE ADDITION OF ` 60,000/- IS DELETED. 7. THE NEXT GROUND OF APPEAL IS WITH REGARD TO DETE RMINATION OF OPENING CAPITAL AT ` 5,00,000/-. 4 I.T.(SS) A. NO.1/MDS/10 8. SHRI G. BASKAR, THE LD.COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSEE WAS CULTIVATING AGRICULTURAL LAND FOR A VERY LONG PERIOD AND NO OTHER INVESTMENT WAS MADE BY THE ASSE SSEE. THEREFORE, THE ASSESSEE WOULD HAVE ACCUMULATEED INC OME FOR THE PURPOSE OF OPENING CAPITAL AT ` 5,00,000/-. 9. ON THE CONTRARY, SHRI DURAI PANDIAN, THE LD. DEP ARTMENTAL REPRESENTATIVE, SUBMITTED THAT THERE IS NO MATERIAL AVAILABLE ON RECORD TO SUGGEST THAT THE ASSESSEE HAS ANY INCOME TO CLAIM THE SAME AS OPENING CAPITAL. THEREFORE, ON THE BASIS O F MATERIAL AVAILABLE ON RECORD, THE ASSESSING OFFICER ESTIMATE D THE OPENING CAPITAL AT ` 5,00,000/-. THE ASSESSEE SIMPLY CLAIMS THAT THE OP ENING CAPITAL ESTIMATED BY THE ASSESSING OFFICER WAS VERY LOW. IN THE ABSENCE OF ANY MATERIAL, ACCORDING TO THE LD. D.R., IT CANNOT BE SAID THAT ESTIMATION MADE BY THE ASSESSING OFFICER TOWAR DS OPENING CAPITAL IS VERY LOW. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER ESTIMATED THE AGRICULTURAL INCOME AT ` 2,60,000/- FOR THE BLOCK PERIOD ENDING 31.03.1991. FOR THE BLOCK PERIOD END ING 31.03.1992, THE ASSESSING OFFICER ESTIMATED THE AGRICULTURAL IN COME AT 5 I.T.(SS) A. NO.1/MDS/10 ` 1,00,000/-. SIMILARLY, FOR OTHER ASSESSMENT YEARS ENDING 31.03.1993 AND 31.03.1994, THE ASSESSING OFFICER HA S ESTIMATED ` 1,00,000/- FOR EACH ASSESSMENT YEAR. FOR THE ASSES SMENT YEAR 31.03.1995, THE ASSESSING OFFICER ESTIMATED THE AGR ICULTURAL INCOME AT ` 2,20,000/-. AS ON 01.04.1995, THE ASSESSING OFFICE R HAS TAKEN THE OPENING CAPITAL AT ` 5,00,000/- ON THE BASIS OF CASH FLOW STATEMENT OF ALL THE YEARS UNDER CONSIDERATION. TH ERE IS NO REFERENCE ABOUT CASH FLOW STATEMENT IN THE ASSESSME NT ORDER. UNDER NORMAL CIRCUMSTANCES, THIS TRIBUNAL WOULD HAV E REMANDED THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICE R FOR RECONSIDERATION. HOWEVER, REMANDING BACK THE MATTE R TO THE ASSESSING OFFICER AT THIS STAGE MAY NOT SERVE THE P URPOSE. THIS IS THE SECOND ROUND OF LITIGATION BEFORE THIS TRIBUNAL . IN THE FIRST ROUND OF LITIGATION, THE MATTER WAS REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER. INSPITE OF THAT, THE ASSESSING OFFICER HAS ESTIMATED THE OPENING CAPITAL AT ` 5,00,000/- WITHOUT ANY BASIS. IN THE ABSENCE OF ANY MATERIAL, THIS TRIBUNAL IS UNABL E TO UPHOLD THE ESTIMATION MADE BY THE ASSESSING OFFICER. ACCORDING LY, THE OPENING CAPITAL ESTIMATED BY THE ASSESSING OFFICER TO THE E XTENT OF ` 5,00,000/- IS DELETED. THE ASSESSING OFFICER IS DI RECTED TO ACCEPT THE ESTIMATION MADE BY THE ASSESSEE. 6 I.T.(SS) A. NO.1/MDS/10 11. THE NEXT GROUND OF APPEAL IS WITH REGARD TO AGR ICULTURAL INCOME. 12. SHRI G. BASKAR, THE LD.COUNSEL FOR THE ASSESSEE , SUBMITTED THAT THE ASSESSING OFFICER ESTIMATED THE AGRICULTUR AL INCOME AT ` 1,00,000/- AS AGAINST THE INCOME DECLARED BY THE AS SESSEE AT ` 17,51,000/-. THE ASSESSEE HAS FURNISHED THE AREA O F THE LAND UNDER CULTIVATION AND THE NATURE OF CROP CULTIVATED , IRRIGATION FACILITY, ETC. BEFORE THE ASSESSING OFFICER. THE ASSESSING O FFICER HAS FAILED TO CONSIDER THE NATURE OF CROP AND CULTIVATION MADE BY THE ASSESSEE AND THE AREA OF CULTIVATION. IN FACT, THE ASSESSEE ALONG WITH HIS WIFE, FATHER, PATERNAL UNCLE AND OTHERS WORKED IN THE FIE LD FOR EARNING THE AGRICULTURAL INCOME, THEREFORE, THE ASSESSING OFFIC ER OUGHT TO HAVE ACCEPTED THE AGRICULTURAL INCOME DECLARED BY THE AS SESSEE AT ` 17,51,000/- PER ANNUM. 13. ON THE CONTRARY, SHRI DURAI PANDIAN, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSING OFFICE R CONSIDERING THE STATEMENT RECORDED BY THE VILLAGE ADMINISTRATIV E OFFICER AND CHITTA FOR THE PERIOD 31.03.1995 AND 31.03.1996, OB SERVED THAT THE ASSESSEE ADMITTED THE AGRICULTURAL INCOME AT ` 50,000/- AND 7 I.T.(SS) A. NO.1/MDS/10 ` 11,41,405/- RESPECTIVELY. ON THE BASIS OF THIS MAT ERIAL, THE ASSESSING OFFICER ESTIMATED THE INCOME AT ` 10,00,000/- FOR THE BLOCK PERIOD. IN OTHER WORDS, THE ASSESSING OFFICE R ESTIMATED THE INCOME AT ` 1,00,000/- PER ANNUM. 14. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. A COPY OF THE VILLAGE ADMINISTRATIVE OFFICERS CERTIFICATE IS AVA ILABLE AT PAGE 136 OF PAPER-BOOK NO.2. IT CLEARLY SHOWS THAT THE ASSESSE ES WIFE WAS CULTIVATING 6.78.0 HECTARES OF AGRICULTURAL LAND. THE ADANGAL EXTRACT SHOWS THAT THE SAID LAND WAS CULTIVATED WITH COTTON , GROUNDNUT, COCONUT, ETC. THE VILLAGE ADMINISTRATIVE OFFICERS CERTIFICATE SHOWS THAT ANNUAL INCOME WAS ` 1,50,000/- FROM THE SAID LAND. THE ASSESSING OFFICER OBSERVED IN THE ASSESSMENT ORDER THAT IN THE STATEMENT RECORDED BY THE VILLAGE ADMINISTRATIVE OF FICER, THE ASSESSEE ADMITTED THE AGRICULTURAL INCOME ONLY TO T HE EXTENT OF ` 50,000/- AND ` 11,41,405/- RESPECTIVELY. A COPY OF ANOTHER VILLAG E ADMINISTRATIVE OFFICERS CERTIFICATE, WHICH IS AVAI LABLE AT PAGE 124 OF THE PAPER-BOOK NO.2 SHOWS THAT THE ASSESSEES WIFE SMT. SARASWATHI WAS CULTIVATING 3.12.0 HECTARES FOR MORE THAN SIX YEARS. THE ANNUAL INCOME EARNED WAS ` 1,00,000/-. FROM THESE MATERIAL 8 I.T.(SS) A. NO.1/MDS/10 AVAILABLE ON RECORD, IT APPEARS THAT THE ASSESSEE W AS EARNING FROM THE AGRICULTURAL LAND MORE THAN ` 2.5 LAKHS PER ANNUM. THE ASSESSEE CLAIMS THAT FOR THE BLOCK PERIOD CONSISTIN G OF TEN YEARS, IT WAS ONLY ` 17,51,000/-. THEREFORE, THE ASSESSING OFFICER IS N OT JUSTIFIED IN CONCLUDING THAT THE AGRICULTURAL INCOM E WAS ` 10,00,000/-. ACCORDINGLY, THE ORDER OF THE ASSESSING OFFICER IS SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO ACCEPT THE AGRICUL TURAL INCOME DECLARED BY THE ASSESSEE AT ` 17,51,000/-. 15. THE NEXT ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO SALE CONSIDERATION SAID TO BE PAID TO SHRI RAJA K. SADAS IVAM CHETTIAR FOR PURCHASE OF 1.5 ACRES OF LAND AND 0.75 ACRES OF LAN D RESPECTIVELY. 16. SHRI G. BASKAR, THE LD.COUNSEL FOR THE ASSESSEE , SUBMITTED THAT THE ASSESSING OFFICER WITHOUT ANY MATERIAL FOU ND THAT THE ASSESSEE HAS PAID A SUM OF ` 8,26,000/- TO SHRI RAJA K. SADASIVAM CHETTIAR. IN FACT, THE ASSESSEE HAS NOT PAID ANY A MOUNT AND NO MATERIAL WAS FOUND DURING THE COURSE OF SEARCH OPER ATION TOWARDS PAYMENT OF ` 8,26,000-. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS PAID ` 55,42,000/- TO ONE SHRI RAJA K. SADASIVAM CHETTIAR. THE ASSESSEE EXPLAINED BEFORE THE ASSESS ING OFFICER THAT THESE AMOUNTS WERE GIVEN TO ONE PRABHU WHO IS A CIN E PRODUCER 9 I.T.(SS) A. NO.1/MDS/10 AND THE SAME WAS WRITTEN IN THE BOOKS OF ACCOUNT AS PRABHU ACCOUNT. A STATEMENT WAS ALSO RECORDED FROM SHRI RAJA K. SADASIVAM CHETTIAR ON 03.05.1996. THE SAID SHRI RA JA K. SADASIVAM CHETTIAR ADMITTED THAT HE HAS DEALINGS WI TH THE ASSESSEE IN RESPECT OF SALE OF ONE LAND AND HE HAS ADMITTED THAT HE BORROWED MONEY FROM THE ASSESSEE. ACCORDING TO THE LD. COUNSEL, FROM THE ABOVE STATEMENT OF SHRI RAJA K. SADASIVAM CHETTIAR, THE ASSESSING OFFICER PRESUMED THAT SHRI RAJA K. SADASI VAM CHETTIAR RECEIVED ` 1,18,000/- FROM THE ASSESSEE. THE ASSESSING OFFICE R CONCLUDED THAT THE ENTRIES FOUND IN THE LOAN REGIST ER IN THE NAME OF SHRI RAJA K. SADASIVAM CHETTIAR AT PAGE 191 MIGHT H AVE BEEN WRITTEN IN THE PRABHU ACCOUNT. WITHOUT APPRECIAT ING THE MATERIAL AVAILABLE ON RECORD, ACCORDING TO THE LD. COUNSEL, THE ASSESSING OFFICER CONCLUDED THAT SHRI RAJA K. SADASIVAM CHETT IAR DID NOT PAY ANY AMOUNT AND THE ASSESSEE GAVE ENTIRE AMOUNT OF ` 15,00,000/- IN FEBRUARY, 1996. ACCORDINGLY, THE ASSESSING OFFICER MADE AN ADDITION OF ` 55,80,000/- FOR PURCHASE OF 1.5 ACRES OF LAND FROM SHRI RAJA K. SADASIVAM CHETTIAR. ACCORDING TO THE LD. C OUNSEL, THE ENTIRE PAYMENT WAS MADE TO PRABHU ALIAS SADASIVAM C HETTIAR AND NOT TO SHRI RAJA K. SADASIVAM CHETTIAR. THE ASSESS ING OFFICER PRESUMED THAT THE ASSESSEE HAS CREATED AN ARTIFICIA L IDENTITY IN 10 I.T.(SS) A. NO.1/MDS/10 RESPECT OF THE PERSON WHO RECEIVED THE MONEY. SINC E THE MONEY WAS NOT ADVANCED TO SHRI RAJA K. SADASIVAM CHETTIAR AND IT WAS ADVANCED ONLY TO PRABHU ALIAS SADASIVAM CHETTIAR, A CCORDING TO THE LD. COUNSEL, THE ADDITION MADE BY THE ASSESSING OFF ICER IS NOT JUSTIFIED. 17. ON THE CONTRARY, SHRI DURAI PANDIAN, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT IN THE ORIGINAL ROUN D OF LITIGATION, THIS TRIBUNAL REMANDED BACK THE MATTER TO THE FILE OF TH E ASSESSING OFFICER TO RE-EXAMINE THE MATTER WITH A DIRECTION T O VERIFY THE SEIZED MATERIAL. THE ASSESSING OFFICER VERIFIED THE SEIZE D MATERIAL AND FOUND THAT THE ASSESSEE HAS CREATED AN ARTIFICIAL P ERSON IN THE NAME OF PRABHU ALIAS SADASIVAM. THE ASSESSEE EXPLAINED BEFORE THE ASSESSING OFFICER THAT HE OBTAINED AFFIDAVIT FROM S HRI PRABHU IN THE YEAR 1998 AND NOW HIS WHEREABOUTS ARE NOT KNOWN. I NSPITE OF REPEATED OPPORTUNITIES GIVEN TO THE ASSESSEE, ACCOR DING TO THE LD. D.R., HE COULD NOT PRODUCE THE DEBTOR SHRI PRABHU A LIAS SADASIVAM BEFORE THE ASSESSING OFFICER. IN THE ABSENCE OF AN Y CLUE REGARDING THE EXISTENCE OF SHRI PRABHU ALIAS SADASIVAM, THE A SSESSING OFFICER CONCLUDED THAT THE ASSESSEE HAS CREATED AN ARTIFICI AL IDENTITY TO HIDE THE ACTUAL PERSON WHO HAD RECEIVED THE AMOUNTS. TH E SEIZED 11 I.T.(SS) A. NO.1/MDS/10 MATERIAL DISCLOSES THE NAME OF SHRI RAJA K. SADASIV AM CHETTIAR AND SHRI SRIDHAR, S/O SHRI SADASIVAM. SHRI SRIDHAR IS NONE OTHER THAN THE SON OF SHRI RAJA SADASIVAM CHETTIAR. IN PRABH U ACCOUNT, IT WAS WRITTEN AS GIVEN TO CHETTIAR. THE ENTRY MADE ON 03.05.1996 SHOWS THAT A SUM OF ` 2,00,000/- WAS APPEARED TO BE PAID. KEEPING IN VIEW ALL THE EVIDENCE AND THE FAILURE OF THE ASS ESSEE TO PRODUCE PRABHU ALIAS SADASIVAM, THE ASSESSING OFFICER FOUND THAT PRABHU ALIAS SADASIVAM IS NOT IN EXISTENCE AND THE ENTIRE PAYMENT WAS MADE TO SHRI RAJA K. SADASIVAM CHETTIAR. ACCORDING LY, IT WAS FOUND BY THE ASSESSING OFFICER THAT THE ASSESSEE PURCHASE D 1.5 ACRES OF LAND WHICH BELONGED TO SHRI RAJA K. SADASIVAM CHETT IAR TO SET OFF THE AMOUNTS DUE TO HIM AMOUNTING TO ` 55,80,000/-. THEREFORE, ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER HA S RIGHTLY MADE THE ADDITION. 18. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSEE CLAIMS THAT THE MONEY WAS PAID TO PRABHU ALIAS SADA SIVAM, A CINE PRODUCER. EVEN THOUGH THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE PRABHU, THE ASSESSEE COULD NOT PRODUCE T HE PERSON AND HE CLAIMED BEFORE THE ASSESSING OFFICER THAT HIS WH EREABOUTS ARE 12 I.T.(SS) A. NO.1/MDS/10 NOT KNOWN. THE FACT REMAINS THAT THE ASSESSEE HAS FILED AN AFFIDAVIT FROM THE SAID PRABHU ALIAS SADASIVAM. AS PER THE D IRECTION OF THIS TRIBUNAL IN THE EARLIER ROUND OF LITIGATION, THE AS SESSING OFFICER EXAMINED SHRI RAJA K. SADASIVAM CHETTIAR. SHRI RAJ A K. SADASIVAM CHETTIAR ADMITTED THAT HE HAS SOLD 1.49 A CRES OF LAND IN SURVEY NO.372/2A TO THE ASSESSEE FOR ` 4,41,000/- AND ANOTHER LAND IN SURVEY NO.373/1 TO THE WIFE OF THE ASSESSEE TO T HE EXTENT OF 0.75 ACRES FOR A CONSIDERATION OF ` 3,75,000/-. FROM THE ABOVE STATEMENTS RECORDED FROM THE VENDORS IT IS OBVIOUS THAT THE COST OF THE LAND WAS ONLY ` 4,41,000/- AND ` 3,75,000/- RESPECTIVELY. THEREFORE, THE PAYMENT SAID TO BE MADE BY THE ASSES SEE TO SHRI RAJA K. SADASIVAM CHETTIAR FOR PURCHASE OF LAND IS CONTRARY TO THE EVIDENCE AVAILABLE ON RECORD. THE ASSESSING OFFICE R TRIED TO SHOW THAT THE AMOUNT OF ` 55,80,000/- WAS SET OFF TOWARDS THE COST OF LAND PURCHASED BY THE ASSESSEE AND HIS WIFE. SINCE THE ASSESSING OFFICER CLAIMS THAT PRABHU ALIAS SADASIVAM IS A NON -EXISTING PERSON, THIS TRIBUNAL HAD OBSERVED EARLIER IN THE ORDER DAT ED 31.10.2002 IN THE FIRST ROUND OF LITIGATION, A COPY OF WHICH IS A VAILABLE AT PAGE 96, THAT THE STATEMENT RECORDED FROM THE VENDORS AND TH E MATERIAL FOUND DURING SEARCH CANNOT BE IGNORED. IN THE ABSE NCE OF ANY MATERIAL EVIDENCE THAT THE ASSESSEE HAS PAID MORE M ONEY TO SHRI 13 I.T.(SS) A. NO.1/MDS/10 RAJA K. SADASIVAM CHETTIAR, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT MERELY BECAUSE THE ASSESSING OFFICER C OULD NOT IDENTIFY PRABHU ALIAS SADASIVAM, IT CANNOT BE PRESUMED THAT THE ASSESSEE HAS PAID ` 55,80,000/- FOR PURCHASE OF LAND FROM SHRI RAJA K. SADASIVAM CHETTIAR. THEREFORE, THIS TRIBUNAL IS UN ABLE TO UPHOLD THE ADDITION MADE BY THE ASSESSING OFFICER TOWARDS PURCHASE OF LAND FROM SHRI RAJA K. SADASIVAM CHETTIAR. ACCORD INGLY, THE ORDER OF THE ASSESSING OFFICER IS SET ASIDE AND THE ADDIT ION MADE BY THE ASSESSING OFFICER IS DELETED. 19. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADD ITION OF ` 2,00,000/- TOWARDS PURCHASE CONSIDERATION OF CAR. 20. DURING THE COURSE OF HEARING, THE LD.COUNSEL FO R THE ASSESSEE SUBMITTED THAT HE IS NOT PRESSING THIS ISS UE. THE LD. DEPARTMENTAL REPRESENTATIVE ALSO DID NOT HAVE ANY O BJECTION. THEREFORE, WE DISMISS THIS GROUND OF APPEAL AS NOT PRESSED. ACCORDINGLY, THE ADDITION OF ` 2,00,000/- TOWARDS PURCHASE OF CAR IS DISMISSED AS NOT PRESSED. 21. THE NEXT ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO DEPOSITS AND LOANS SAID TO BE TAKEN BY THE ASSESSEE TO THE EXTENT OF ` 12.2 LAKHS. 14 I.T.(SS) A. NO.1/MDS/10 22. SHRI G. BASKAR, THE LD.COUNSEL FOR THE ASSESSEE , SUBMITTED THAT THE ASSESSING OFFICER HAS NOT CONSIDERED THE L IABILITY OF THE ASSESSEE WHILE ARRIVING AT NET WORTH. REFERRING TO PAGE 107 OF THE PAPER-BOOK NO.1, THE LD.COUNSEL SUBMITTED THAT THER E ARE LIABILITIES WHICH HAVE TO BE TAKEN INTO CONSIDERATION WHILE EST IMATING THE NET WORTH. 23. WE HAVE HEARD SHRI DURAI PANDIAN, THE LD. DEPAR TMENTAL REPRESENTATIVE ALSO. WHILE ARRIVING AT THE NET WOR TH, THE LIABILITIES OF THE ASSESSEE HAVE ALSO TO BE TAKEN INTO CONSIDERATI ON. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER HAS TO RE-EXAMINE THE ISSUE AFTER TAKING INTO CONSI DERATION THE LIABILITIES OF THE ASSESSEE FOR ESTIMATING THE NET WORTH. ACCORDINGLY, THE ISSUE IS REMITTED BACK TO THE FILE OF THE ASSES SING OFFICER ONLY FOR LIMITED PURPOSE OF CONSIDERING THE LIABILITIES OF T HE ASSESSEE ALSO AND THEREAFTER ESTIMATE THE NET WORTH. 24. THE NEXT ISSUE ARISES FOR CONSIDERATION IS LEVY OF INTEREST UNDER SECTION 158BFA(1) OF THE ACT. 25. WE HAVE HEARD SHRI DURAI PANDIAN, THE LD. DEPAR TMENTAL REPRESENTATIVE ALSO. ADMITTEDLY, PROVISIONS OF INC OME-TAX ACT AS IT 15 I.T.(SS) A. NO.1/MDS/10 WAS IN EXISTENCE ON THE FIRST DAY OF THE FINANCIAL YEAR HAS TO BE TAKEN INTO CONSIDERATION. IN THE CASE BEFORE US, T HE BLOCK PERIOD IS 01.04.1985 TO 11.06.1996. ADMITTEDLY, THE PROVISIO NS OF SECTION 158BFA(1) WAS INTRODUCED BY INCOME-TAX (AMENDMENT) ACT, 1997 WITH EFFECT FROM 1.1.1997. THEREFORE, THE PROVISIO NS OF SECTION 158BFA(1) OF THE ACT IS NOT APPLICABLE AT ALL. HEN CE, THE LEVY OF INTEREST UNDER SECTION 158BFA(1) OF THE ACT IS NOT JUSTIFIED. ACCORDINGLY, THE ORDER OF THE ASSESSING OFFICER IS SET ASIDE AND THE ADDITION MADE BY THE ASSESSING OFFICER IS DELETED. 26. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 30 TH NOVEMBER, 2016 AT CHENNAI. SD/- SD/- ( !' .$%$& ) ( . . . ) (ABRAHAM P. GEORGE) (N.R.S. GANESAN) ( / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 8 /DATED, THE 30 TH NOVEMBER, 2016. KRI. 0 .39: ;:63 /COPY TO: 1. +, /APPELLANT 2. ./+, /RESPONDENT 3. 2 <3 /CIT-II, COIMBATORE 4. := .3 /DR 5. & > /GF.