C.Sampath Kumar, CHENNAI V. DCIT, CHENNAI

ITSSA 54/CHNY/2005

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3247 (ITAT-CHENNAI)
• Duration Of Justice: 11 year(s) 11 month(s) 29 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 20-04-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 21-04-2005
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVASJCIT
• Assessee Lawyers: S SRIDHAR
• Keywords: Depreciation; Salary income; Charitable institution; Principle of natural justice; Block assessment; Unabsorbed depreciation
• Section: 143(3); 32; 147; 148; 144; 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , .. ' #$, & '( BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER I.T.(SS) A. NO.54/MDS/2005 BLOCK ASSESSMENT PERIOD : 1986-87 TO 1995-96 AND PART OF 1996-97 SHRI C. SAMPATH KUMAR, C/O SHRI S. SRIDHAR, ADVOCATE, NEW NO.3, OLD NO.2, I MAIN ROAD, GANDHI NAGAR, ADYAR, CHENNAI - 600 020. PAN : 24704-S V. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL II(4), CHENNAI - 600 034. (*+/ APPELLANT) (-.*+/ RESPONDENT) *+ / 0 / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE -.*+ / 0 / RESPONDENT BY : SHRI SHIVA SRINIVAS, JCIT ' / 1& / DATE OF HEARING : 02.02.2017 234 / 1& / DATE OF PRONOUNCEMENT : 20.04.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRC LE II(4), CHENNAI, DATED 31.03.2005 UNDER SECTION 158BD OF TH E INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2 I.T.(SS) A. NO.54/MDS/05 2. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE , SUBMITTED THAT THERE WAS SEARCH IN THE PREMISES OF ONE SHRI A .N. DYANESWARAN ON 19.01.1996. ACCORDING TO THE LD. CO UNSEL, SHRI A.N. DYANESWARAN IS AN OFFICER OF INDIAN ADMINISTRA TIVE SERVICE. AT THE TIME OF SEARCH, THE SAID SHRI A.N. DYANESWARAN WAS WORKING AS CHAIRMAN AND MANAGING DIRECTOR OF TAMIL NADU MINERA LS LTD. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE, A NON-P RACTICING CHARTERED ACCOUNTANT, WAS THE DIRECTOR IN A COMPANY BY NAME M/S DOMORE TOOLS AND ACCESSORIES PVT. LTD. ACCORDING T O THE LD. COUNSEL, THE COMPANY M/S DOMORE TOOLS AND ACCESSORI ES PVT. LTD. IS ENGAGED IN THE BUSINESS OF MANUFACTURING AUTO SP ARE PARTS. 3. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE , FURTHER SUBMITTED THAT THE ASSESSEE SAID TO HAVE ENTERED TH E HOUSE OF SHRI A.N. DYANESWARAN AT THE TIME OF SEARCH ON 19.01.199 6. SINCE THE ASSESSEE ENTERED THE HOUSE OF SHRI A.N. DYANESWARAN DURING THE COURSE OF SEARCH OPERATION, HE WAS ALSO SEARCHED BY THE REVENUE AUTHORITIES. DURING THE COURSE OF SEARCH OPERATION , THE REVENUE AUTHORITIES FOUND CASH OF ` 2,16,000/- AND ALSO USD 5014, WHICH ARE SAID TO BE IN POSSESSION OF THE ASSESSEE. THE ASSE SSING OFFICER MADE A BLOCK ASSESSMENT ON 12.02.2001 DETERMINING T HE TOTAL 3 I.T.(SS) A. NO.54/MDS/05 UNDISCLOSED INCOME AT ` 1,95,70,900/-. ON APPEAL BY THE ASSESSEE BEFORE THIS TRIBUNAL, THE ORDER OF THE ASSESSING OF FICER DATED 12.02.2001 WAS SET ASIDE AND THE MATTER WAS REMITTE D BACK TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATION. IN FACT, THIS TRIBUNAL DIRECTED THE ASSESSING OFFICER TO AFFORD S UFFICIENT OPPORTUNITY TO THE ASSESSEE. CONSEQUENT TO THE DIR ECTION OF THIS TRIBUNAL, THE PRESENT ASSESSMENT ORDER WAS PASSED B Y THE ASSESSING OFFICER REPEATING THE SAME ADDITION MADE IN THE ORIGINAL ORDER. THEREFORE, THE ASSESSEE HAS FILED THE PRESE NT APPEAL BEFORE THIS TRIBUNAL. 4. REFERRING TO THE GROUNDS OF APPEAL, THE LD.COUNS EL FOR THE ASSESSEE SUBMITTED THAT GROUNDS NO.1 TO 7 ARE GENER AL IN NATURE, THEREFORE, THE ASSESSEE IS NOT PRESSING THESE GROUN DS. IN FACT, THE ASSESSEE IS CHALLENGING THE FRAMING OF ASSESSMENT U NDER SECTION 158BD OF THE ACT AND ALSO RAISED AN ISSUE THAT DURI NG PENDENCY OF HIS APPEAL BEFORE THE HIGH COURT, THE ASSESSING OFF ICER PASSED THE ASSESSMENT. THE LD.COUNSEL FURTHER SUBMITTED BEFOR E THIS TRIBUNAL THAT THE ASSESSEE IS NOT PRESSING THE GROUNDS NO.1 TO 7. THE LD. DEPARTMENTAL REPRESENTATIVE HAD NO OBJECTION TO DIS MISS THE GROUNDS AS NOT PRESSED. 4 I.T.(SS) A. NO.54/MDS/05 5. IN VIEW OF THE ABOVE, THE GROUNDS RAISED BY THE ASSESSEE NO.1 TO 7 WITH REGARD TO ASSESSMENT UNDER SECTION 1 58BD OF THE ACT AND VIOLATION OF PRINCIPLES OF NATURAL JUSTICE, ETC. ARE DISMISSED AS NOT PRESSED. 6. NOW COMING TO GROUNDS NO.8, 9 AND 10, WHICH ALSO RELATE TO VALIDATION OF BLOCK ASSESSMENT FRAMED BY THE ASSESS ING OFFICER AGAINST THE ASSESSEE. DURING THE COURSE OF HEARING THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT HE IS NOT PRESSING THE GROUNDS NO.8 TO 10 ALSO, THEREFORE, THE GROUNDS NO.8 TO 10 RAISE D BY THE ASSESSEE ARE DISMISSED AS NOT PRESSED. 7. THE NEXT ISSUE ARISES FOR CONSIDERATION IS ASSES SMENT OF SALARY INCOME AS UNDISCLOSED INCOME FOR THE BLOCK P ERIOD. THIS GROUND IS RAISED BY THE ASSESSEE AS GROUNDS NO.11 A ND 12 BEFORE THIS TRIBUNAL. 8. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE , SUBMITTED THAT THERE WAS NO SEIZED MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION. MOREOVER, THE SALARY INCOME IS LESS THA N THE TAXABLE LIMIT, THEREFORE, THE ASSESSING OFFICER IS NOT JUST IFIED IN MAKING ADDITION. 5 I.T.(SS) A. NO.54/MDS/05 9. ON THE CONTRARY, SHRI SHIVA SRINIVAS, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE IS A DI RECTOR IN M/S DOMORE TOOLS AND ACCESSORIES PVT. LTD. THE ASSESSE E HAS RECEIVED SALARY TO THE EXTENT OF ` 20,000/- FOR ASSESSMENT YEAR 1996- 97 AND ` 24,000/- FROM ASSESSMENT YEAR 1987-88 TO 1992-93. AGAIN THE ASSESSEE RECEIVED ` 20,000/- FOR THE ASSESSMENT YEAR 1993-94 AND SIMILARLY, INCOME OF ` 24,000/-, ` 48,000/- AND ` 43,580/- WERE EARNED BY THE ASSESSEE FOR ASSESSMENT YEARS 1994-95 , 1995-96 AND 1996-97 RESPECTIVELY. THE ASSESSING OFFICER AF TER ALLOWING STANDARD DEDUCTION AS PER THE PROVISIONS OF INCOME- TAX ACT, 1961, BROUGHT THE SAME FOR TAXATION. MOREOVER, ACCORDING TO THE LD. D.R., THE ASSESSEE HAS ALSO NOT FILED REGULAR RETURN OF I NCOME DURING THIS PERIOD DISCLOSING THE ABOVE SALARY INCOME. THEREFO RE, THE ASSESSING OFFICER RIGHTLY TREATED THE SALARY INCOME AS UNDISCLOSED INCOME FOR THE BLOCK PERIOD. ON A QUERY FROM THE B ENCH WHAT IS THE MATERIAL FOUND DURING THE COURSE OF SEARCH OPER ATION IN RESPECT OF SALARY INCOME, THE LD. D.R. SUBMITTED THAT NOTHI NG IS REFLECTED IN THE ASSESSMENT ORDER. THE FACT REMAINS, ACCORDING TO THE LD. D.R., THAT THE ASSESSEE HAS NOT FILED RETURN OF INCOME DI SCLOSING SALARY 6 I.T.(SS) A. NO.54/MDS/05 INCOME, THEREFORE, THE SAME WAS ASSESSED RIGHTLY AS UNDISCLOSED INCOME FOR THE BLOCK ASSESSMENT. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THERE WAS SEARCH IN THE PREMISES OF SHRI A.N. DYANESWARAN ON 19.01.1996. THE ASSESSEE ENTERED INTO THE HOUSE OF SHRI A.N. DYANESWARAN DURING THE COURSE OF SEARCH OPERATION A ND HE WAS ALSO PHYSICALLY SEARCHED BY THE REVENUE AUTHORITIES AND IT WAS FOUND THAT THE ASSESSEE WAS IN POSSESSION OF INDIAN CURRENCY TO THE EXTENT OF ` 2,16,000/- AND USD TO THE EXTENT OF $ 5014. APART FROM THIS, IT APPEARS THERE IS NO MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER HAS NOT REFERRED ANYTHING IN THE ASSESSMENT ORDER. 11. WE HAVE CAREFULLY GONE THROUGH THE PROVISIONS O F SECTION 158BB(1) OF THE ACT WHICH READS AS FOLLOWS:- COMPUTATION OF UNDISCLOSED INCOME OF THE BLOCK PERI OD 158BB (1) THE UNDISCLOSED INCOME OF THE BLOCK PERIOD SH ALL 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 RESUL T OF SEARCH OR REQUISITION OF BOOKS OF ACCOUNT OR OTHER DOCUMENTS AND SUCH OTHER MATERIALS OR INFORMATION AS ARE AVAILABLE WIT H THE ASSESSING OFFICER AND RELATABLE TO SUCH EVIDENCE, AS REDUCED BY THE 7 I.T.(SS) A. NO.54/MDS/05 AGGREGATE OF THE TOTAL INCOME, OR, AS THE CASE MAY BE, AS INCREASED BY THE AGGREGATE OF THE LOSSES OF SUCH PR EVIOUS YEARS, DETERMINED,-- (A) WHERE ASSESSMENTS UNDER SECTION 143 OR SECTION 144 OR SECTION 147 HAVE BEEN CONCLUDED PRIOR TO THE DATE OF COMMENCE MENT OF THE SEARCH OR THE DATE OF REQUISITION, ON THE BASIS OF SUCH ASSESSMENTS ; (B) WHERE RETURNS OF INCOME HAVE BEEN FILED UNDER S ECTION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB-SECTION (1 ) OF SECTION 142 OR SECTION 148 BUT ASSESSMENTS HAVE NOT BEEN MADE TIL L THE DATE OF SEARCH OR REQUISITION, ON THE BASIS OF THE INCOM E DISCLOSED IN SUCH RETURNS ; (C) WHERE THE DUE DATE FOR FILING A RETURN OF INCOM E HAS EXPIRED, BUT NO RETURN OF INCOME HAS BEEN FILED, AS NIL ; (D) WHERE THE PREVIOUS YEAR HAS NOT ENDED OR THE DA TE OF FILING THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTI ON 139 HAS NOT EXPIRED, ON THE BASIS OF ENTRIES RELATING TO SUCH IN COME OR TRANSACTIONS AS RECORDED IN THE BOOKS OF ACCOUNT AN D OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE ON OR BEF ORE THE DATE OF THE SEARCH OR REQUISITION RELATING TO SUCH PREVI OUS YEARS ; (E) WHERE ANY ORDER OF SETTLEMENT HAS BEEN MADE UND ER SUB- SECTION (4) OF SECTION 245D, ON THE BASIS OF SUCH ORDER ; (F) WHERE AN ASSESSMENT OF UNDISCLOSED INCOME HAD B EEN MADE EARLIER UNDER CLAUSE (C) OF SECTION 158BC, ON THE BASI S OF SUCH ASSESSMENT. EXPLANATION FOR THE PURPOSES OF DETERMINATION OF UNDISCLOSED INCOME,-- (A) THE TOTAL INCOME OR LOSS OF EACH PREVIOUS YEAR SHALL, FOR THE PURPOSE OF AGGREGATION, BE TAKEN AS THE TOTAL INCOM E OR LOSS COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF CHAPT ER IV WITHOUT GIVING EFFECT TO SET OFF OF BROUGHT FORWARD LOSSES UNDER CHAPTER VI OR UNABSORBED DEPRECIATION UNDER SUB-SECTION (2) OF SECTION 32 ; (B) OF A FIRM, RETURNED INCOME AND TOTAL INCOME ASS ESSED FOR EACH OF THE PREVIOUS YEARS FALLING WITHIN THE BLOCK PERI OD SHALL BE THE 8 I.T.(SS) A. NO.54/MDS/05 INCOME DETERMINED BEFORE ALLOWING DEDUCTION OF SALA RY, INTEREST, COMMISSION, BONUS OR REMUNERATION BY WHATEVER NAME CALLED TO ANY PARTNER NOT BEING A WORKING PARTNER : PROVIDED THAT UNDISCLOSED INCOME OF THE FIRM SO DET ERMINED SHALL NOT BE CHARGEABLE TO TAX IN THE HANDS OF THE PARTNER S, WHETHER ON ALLOCATION OR ON ACCOUNT OF ENHANCEMENT ; (C) ASSESSMENT UNDER SECTION 143 INCLUDES DETERMINATI ON OF INCOME UNDER SUB-SECTION (1B) OF SECTION 143. 12. IN VIEW OF SPECIFIC LANGUAGE EMPLOYED BY PARLI AMENT FOR THE PURPOSE OF COMPUTING UNDISCLOSED INCOME FOR BLOCK P ERIOD, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSE SSING OFFICER HAS TO CONFINE HIMSELF ONLY TO THE EVIDENCE FOUND DURIN G THE COURSE OF SEARCH OPERATION AND SUCH OTHER MATERIAL WHICH ARE RELATABLE TO THE EVIDENCE FOUND DURING THE COURSE OF SEARCH OPERATIO N. THE ASSESSING OFFICER CANNOT TRAVEL BEYOND THE EVIDENCE FOUND DURING THE COURSE OF SEARCH OPERATION. IN THE CASE BEFORE US, ADMITTEDLY, WHAT WAS FOUND BY THE REVENUE AUTHORITIES IS ONLY ` 2,16,000/- IN INDIAN CURRENCY AND USD 5014. APART FROM THAT, THE RE IS NO OTHER MATERIAL AVAILABLE ON RECORD. IN THOSE CIRCUMSTANC ES, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICE R IS NOT JUSTIFIED IN MAKING ADDITION WITH REGARD TO SALARY INCOME. THER EFORE, WE ARE UNABLE TO UPHOLD THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY, THE ORDER OF THE ASSESSING OFFICER IS SET ASIDE. THE A DDITION MADE BY 9 I.T.(SS) A. NO.54/MDS/05 THE ASSESSING OFFICER TOWARDS SALARY INCOME FOR ALL THE ASSESSMENT YEARS WHICH FALL IN THE BLOCK PERIOD IS DELETED. 13. THE NEXT ISSUE ARISES FOR CONSIDERATION IS ASSE SSMENT OF CREDIT BALANCE IN THE BOOKS OF ACCOUNT OF M/S DOMOR E TOOLS AND ACCESSORIES PVT. LTD. AS UNDISCLOSED INCOME. 14. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSE E, SUBMITTED THAT THE ASSESSING OFFICER MADE ADDITION ON THE GRO UND THAT THERE ARE CREDITS IN THE BOOKS OF ACCOUNT OF M/S DOMORE T OOLS AND ACCESSORIES PVT. LTD. IN THE NAME OF THE ASSESSEE. ACCORDING TO THE LD. COUNSEL, NO MATERIAL WAS FOUND DURING THE COURS E OF SEARCH OPERATION, THEREFORE, IT CANNOT BE UNDISCLOSED INCO ME FOR THE BLOCK PERIOD. AT THE BEST, IT MAY BE ASSESSED AS INCOME IN THE REGULAR ASSESSMENT UNDER SECTION 143(3) OF THE ACT AND CERT AINLY IT CANNOT BE UNDISCLOSED INCOME FOR THE BLOCK PERIOD. IN THE ABSENCE OF ANY MATERIAL, ACCORDING TO THE LD. COUNSEL, THERE CANNO T BE ANY ADDITION. 15. ON THE CONTRARY, SHRI SHIVA SRINIVAS, THE LD. D EPARTMENTAL REPRESENTATIVE, SUBMITTED THAT ON THE BASIS OF BOOK S OF ACCOUNT OF THE COMPANY, THE ASSESSING OFFICER REQUESTED THE AS SESSEE TO EXPLAIN THE SOURCE FOR INCREASE IN CREDIT BALANCE. THE ASSESSEE 10 I.T.(SS) A. NO.54/MDS/05 EXPLAINED BEFORE THE ASSESSING OFFICER THAT THE OPE NING CREDIT BALANCE AS ON 01.04.1985 WAS ` 4,38,000/-. THE REMUNERATION RECEIVED FROM THE COMPANY WAS CREDITED IN THE CAPIT AL ACCOUNT. THE ASSESSEE ALSO CLAIMED THAT HE BOUGHT LOAN ON PLEDGE D JEWELS AND GAVE MONEY TO THE COMPANY. IN THE ABSENCE OF ANY D ETAILS WITH REGARD TO THE CLAIM MADE BY THE ASSESSEE BEFORE THE ASSESSING OFFICER, THE ASSESSING OFFICER FOUND THAT THE ASSES SEE HAS NOT EXPLAINED THE SOURCE FOR INCREASE IN CREDIT BALANCE IN THE ACCOUNT OF THE COMPANY, THEREFORE, THE SAME WAS TREATED AS UND ISCLOSED INCOME FOR THE BLOCK PERIOD. 16. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO CAREFULLY GONE THROUGH THE IMPUGNED ORDER OF ASSESS MENT. A BARE READING OF THE ASSESSMENT ORDER DOES NOT DISCLOSE A NY REFERENCE ABOUT SEIZED MATERIAL WHICH WAS FOUND DURING THE CO URSE OF SEARCH OPERATION. THIS BEING A BLOCK ASSESSMENT MADE UNDE R SECTION 158BD OF THE ACT, THE ASSESSING OFFICER IS EXPECTED TO CONFINE HIMSELF ONLY TO THE MATERIAL FOUND DURING THE COURS E OF SEARCH OPERATION AND SUCH OTHER INFORMATION OR MATERIAL AV AILABLE ON RECORD WHICH IS RELATABLE TO SEIZED MATERIAL. IN THIS CAS E, THERE IS NO 11 I.T.(SS) A. NO.54/MDS/05 MATERIAL AVAILABLE ON RECORD WITH REGARD TO CREDIT BALANCE IN THE BOOKS OF ACCOUNT OF M/S DOMORE TOOLS AND ACCESSORIE S PVT. LTD. THE ASSESSEE PRODUCED THE BOOKS BEFORE THE ASSESSIN G OFFICER IN THE REGULAR COURSE OF ASSESSMENT UNDER SECTION 158B D OF THE ACT AND THE ASSESSING OFFICER HAS SIMPLY PICKED UP THE FIGURE FROM THE ACCOUNTS OF THE COMPANY. THIS CREDIT BALANCE IN TH E BOOKS, WHICH WAS FOUND DURING THE ASSESSMENT UNDER SECTION 158BD OF THE ACT, DOES NOT RELATE TO ANY MATERIAL OR EVIDENCE FOUND D URING THE COURSE OF SEARCH OPERATION. IN THOSE CIRCUMSTANCES, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER IS NO T JUSTIFIED IN MAKING ANY ADDITION WITH REGARD TO CREDIT BALANCE F OUND IN THE BOOKS OF M/S DOMORE TOOLS AND ACCESSORIES PVT. LTD. IN V IEW OF THE ABOVE, THIS TRIBUNAL IS UNABLE TO UPHOLD THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY, THE ORDER OF THE ASSESSING OFFICER IS SET ASIDE AND THE ADDITION MADE BY THE ASSESSING OFFICE R IS DELETED. 17. THE NEXT ISSUE ARISES FOR CONSIDERATION IS ADDI TION OF ` 62,64,288/- FOR THE ASSESSMENT YEAR 1995-96 AND ` 47,99,648/- FOR THE ASSESSMENT YEAR 1996-97 TOWARDS REPAYMENT OF LO AN TAKEN BY SHRI NADATHUR VARADHAN. 12 I.T.(SS) A. NO.54/MDS/05 18. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSE E, SUBMITTED THAT SHRI NADATHUR VARADHAN, A US CITIZEN OF INDIAN ORIGIN, OBTAINED LOAN FROM STATE BANK OF INDIA, NRI BRANCH. THE LOA N WAS USED IN MAKING DONATION TO DHARMAMBAL NAMASIVAYAM TRUST. A CCORDING TO THE LD. COUNSEL, DHARMAMBAL NAMASIVAYAM TRUST IS A PUBLIC CHARITABLE TRUST FORMED BY DR. DHARMAMBAL, WHO IS N ONE OTHER THAN THE MOTHER OF SHRI A.N. DYANESWARAN. THE TRUSTEES OF DHARMAMBAL NAMASIVAYAM TRUST ARE SHRI A.N. DYANESWARAN HIMSELF , HIS MOTHER DR. DHARMAMBAL, SHRI A.N. DYANESWARANS WIFE SMT. P REMA DYANESWARAN SHRI A.N. DYANESWARANS SON SHRI SENTHU REWARAN. THE REVENUE AUTHORITIES FOUND SUBSTANTIAL DONATION MADE BY SHRI NADATHUR VARADHAN TO THE TRUST. THE ASSESSEE, WHO ENTERED INTO THE RESIDENCE OF SHRI A.N. DYANESWARAN DURING THE C OURSE OF SEARCH OPERATION, WAS EXAMINED AND IT WAS FOUND THAT SUBST ANTIAL DONATION WAS MADE BY SHRI NADATHUR VARADHAN TO DHARMAMBAL NAMASIVAYAM TRUST. 19. SHRI S. SRIDHAR, THE LD. COUNSEL FOR THE ASSESS EE, FURTHER SUBMITTED THAT THERE IS NO MATERIAL AVAILABLE ON RE CORD WITH REGARD TO REPAYMENT OF LOAN BY THE ASSESSEE. WHAT WAS FOUND WAS THE DONATION MADE BY SHRI NADATHUR VARADHAN TO DHARMAMB AL 13 I.T.(SS) A. NO.54/MDS/05 NAMASIVAYAM TRUST. THE ASSESSEE WAS ALSO EXAMINED BY DIRECTORATE OF ENFORCEMENT ON 15.05.1996. THE ASSE SSEE CLARIFIED THAT AS PER INSTRUCTION OF SHRI A.N. DYANESWARAN, H E CLOSED THE LOAN ACCOUNT. THIS WAS WRONGLY UNDERSTOOD BY THE ASSESS ING OFFICER THAT THE LOAN TAKEN BY SHRI NADATHUR VARADHAN WAS R EPAID BY THE ASSESSEE. ACCORDING TO THE LD. COUNSEL, THE STATEM ENT MADE BY THE ASSESSEE IS VERY CLEAR THAT HE REQUESTED HIS FRIEND FOR ` 6,49,047.50 SO THAT DONATION MAY BE GIVEN TO THE EXTENT OF ` 15,00,000/-. THIS DOES NOT SHOW THAT THE ASSESSEE HAS PAID THE MONEY AT ALL. THEREFORE, ACCORDING TO THE LD. COUNSEL, THE ASSESS ING OFFICER IS NOT JUSTIFIED IN MAKING ANY ADDITION. 20. ON THE CONTRARY, SHRI SHIVA SRINIVAS, THE LD. D EPARTMENTAL REPRESENTATIVE, SUBMITTED THAT ON EXAMINATION, THE REVENUE AUTHORITIES FOUND CERTAIN MATERIAL WHICH CONTAINED 40 PAGES WITH REGARD TO PAYMENT OF DONATION BY SHRI NADATHUR VARA DHAN TO DHARMAMBAL NAMASIVAYAM TRUST. ONE OF THE LETTERS D ATED 21.06.1995 ADDRESSED BY THE ASSESSEE TO SHRI NADATH UR VARADHAN SHOWS THAT HE REPAID THE LOAN WHICH WAS TAKEN BY SH RI NADATHUR VARADHAN. WHEN THE ASSESSEE WAS EXAMINED BY DIRECT ORATE OF ENFORCEMENT ON 15.05.1996, THE ASSESSEE CLARIFIED T HAT THE FRIEND 14 I.T.(SS) A. NO.54/MDS/05 REFERRED IN THE LETTER DATED 21.06.1995 IS NONE OTH ER THAN SHRI A.N. DYANESWARAN. THE ASSESSING OFFICER FOUND THAT THE LOAN TAKEN BY SHRI NADATHUR VARADHAN WAS ACTUALLY REPAID BY THE A SSESSEE. REFERRING TO THE ASSESSMENT ORDER, THE LD. D.R. SUB MITTED THAT SHRI NADATHUR VARADHAN GAVE CONSENT TO GIVE THE FIXED DE POSIT STANDING IN HIS NAME AS SECURITY FOR THE LOAN OBTAINED BY HI M FOR THE PURPOSE OF DONATION. THE MAJOR ROLE WAS PLAYED BY THE ASSE SSEE WHO ARRANGED THE PAYMENT OF LOAN TO THE TRUST AND ALSO REPAID THE LOAN OBTAINED BY SHRI NADATHUR VARADHAN. THE ASSESSEE H AS ALSO AGREED BEFORE ENFORCEMENT DIRECTORATE THAT HE DEPOS ITED ` 95,84,063/- IN THE ACCOUNT OF SHRI NADATHUR VARADHA N. THE ASSESSEE EXPLAINED BEFORE THE ASSESSING OFFICER THA T HE TOOK THE LANDS ON LEASE. HOWEVER, HE COULD NOT SUBSTANTIATE THE SAME BY PRODUCING NECESSARY MATERIAL. IN THE ABSENCE OF AN Y MATERIAL, ACCORDING TO THE LD. D.R., THE ENTIRE REPAYMENT OF LOAN TAKEN BY SHRI NADATHUR VARADHAN FROM STATE BANK OF INDIA WAS TREA TED AS UNDISCLOSED INCOME OF THE ASSESSEE. 21. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE ENTERED THE PREMISES OF S HRI A.N. 15 I.T.(SS) A. NO.54/MDS/05 DYANESWARAN DURING THE COURSE OF SEARCH OPERATION B Y THE REVENUE AUTHORITIES. THE MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION FROM THE ASSESSEE DISCLOSES PAYMEN T OF DONATION BY SHRI NADATHUR VARADHAN TO DHARMAMBAL NAMASIVAYAM TRUST. THE LETTER DATED 21.06.1995 ADDRESSED BY THE ASSESS EE TO SHRI NADATHUR VARADHAN SHOWS THAT HE REQUESTED SHRI A.N. DYANESWARAN FOR ` 16,49,047.50 SO THAT THE SAID SHRI NADATHUR VARADHAN COULD GIVE A DONATION OF ` 15,00,000/-. THE SAID AMOUNT WAS DEPOSITED IN THE BANK ON 29.04.1995 AND 24.05.1 995. IN FACT, THE DEPOSIT WAS MADE TO CLOSE THE LOAN ACCOUNT. FR OM THE ABOVE, IT APPEARS THAT THE ASSESSEE COLLECTED MONEY FROM SHRI A.N. DYANESWARAN AND SAME WAS DEPOSITED TO CLOSE THE LOA N TAKEN BY SHRI NADATHUR VARADHAN. IN FACT, ` 95,84,063/- WAS DEPOSITED IN THE ACCOUNT OF SHRI NADATHUR VARADHAN IN STATE BANK OF INDIA, NRI BRANCH, MOUNT ROAD, CHENNAI-2. 22. FROM THE ORDER OF THE ASSESSING OFFICER IT APPE ARS CHEQUES WERE ISSUED FROM THE ACCOUNT OF M/S DOMORE TOOLS AN D ACCESSORIES PVT. LTD. IN THE NAME OF SHRI NADATHUR VARADHAN AND ALSO HE GAVE EQUAL AMOUNT OF MONEY IN CASH FOR DEPO SIT IN THE SAME BANK ACCOUNT. THE ASSESSING OFFICER FOUND THA T THE ASSESSEE 16 I.T.(SS) A. NO.54/MDS/05 COULD NOT EXPLAINED THE SOURCE FOR MAKING DEPOSIT O F ` 95,84,063/- IN THE BANK ACCOUNT OF SHRI NADATHUR VARADHAN. THE LE TTER DATED 21.06.1995 CLEARLY SAYS THAT THE MONEY WAS TAKEN BY THE ASSESSEE FROM HIS FRIEND. THE FRIEND IS NONE OTHER THAN SHR I A.N. DYANESWARAN. THEREFORE, THIS TRIBUNAL IS OF THE CO NSIDERED OPINION THAT IF AT ALL ANY ADDITION IS TO BE MADE, THE SAME HAS TO BE MADE ONLY IN THE HANDS OF SHRI A.N. DYANESWARAN. SHRI A .N. DYANESWARAN FOUND THE TRUST BY A TRUST DEED DATED 1 6.12.1992 AND MADE THE ASSESSEE AS AN INSTRUMENT FOR COLLECTI NG DONATION FROM VARIOUS PERSONS INCLUDING SHRI NADATHUR VARADH AN. FROM THE FACTS NARRATED BY THE ASSESSING OFFICER AND THE MAT ERIAL AVAILABLE ON RECORD, IT APPEARS THAT THE ASSESSEE ACTED AS A MIDDLEMAN FOR ARRANGING DONATION TO THE TRUST ESTABLISHED BY SHRI A.N. DYANESWARAN AND FOR REPAYMENT OF MONEY. IN THE PRO CESS OF COLLECTING THE MONEY FOR THE TRUST ESTABLISHED BY S HRI A.N. DYANESWARAN, THE ASSESSEE ARRANGED LOAN FOR THE PAY MENT OF SHRI NADATHUR VARADHAN AND THE SAME WAS PAID TO THE TRUS T AND THE MONEY WAS APPARENTLY COLLECTED BY SHRI A.N. DYANESW ARAN AND THE SAME WAS DEPOSITED IN THE BANK ACCOUNT. THIS FACT WAS CLEAR FROM THE MATERIAL AVAILABLE ON RECORD AND THE LETTER OF THE ASSESSEE DATED 17 I.T.(SS) A. NO.54/MDS/05 21.06.1995, WHICH WAS REPRODUCED BY THE ASSESSING O FFICER IN THE IMPUGNED ORDER OF ASSESSMENT. 23. THE ASSESSEE BEING A CHARTERED ACCOUNTANT WAS F ULLY USED BY SHRI A.N. DYANESWARAN FOR THE PURPOSE OF COLLECT ING DONATION TO THE TRUST ESTABLISHED BY HIS FAMILY. THE ASSESSEE IN AN ATTEMPT TO PROTECT SHRI A.N. DYANESWARAN, CLAIMED THAT HE HAS TAKEN 150 ACRES OF LAND ON LEASE. THIS TRIBUNAL IS OF THE CO NSIDERED OPINION THAT WHEN THE ENTIRE TRANSACTION WAS MADE AT THE IN STANCE OF SHRI A.N. DYANESWARAN, THE LOAN WAS TAKEN IN THE NAME OF SHRI NADATHUR VARADHAN AND PAYMENT WAS MADE TO THE TRUST ESTABLISHED BY SHRI A.N. DYANESWARAN AND SHRI A.N. DYANESWARAN MADE ARRANGEMENT FOR REPAYMENT OF DONATION RECEIVED BY THE TRUST TO THE RESPECTIVE PERSONS CLEARLY INDICATES THAT TH E ASSESSEE IS ONLY A MIDDLEMAN. IN THOSE CIRCUMSTANCES, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THERE CANNOT BE ANY ADDITIO N IN THE HANDS OF THE ASSESSEE. AT THE BEST, THE ADDITION, IF ANY, C AN BE MADE ONLY IN THE HANDS OF SHRI A.N. DYANESWARAN AND DEFINITELY N OT IN THE HANDS OF THE ASSESSEE. THEREFORE, THIS TRIBUNAL IS UNABL E TO UPHOLD THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY, THE ORD ER OF THE ASSESSING OFFICER IS SET ASIDE AND THE ADDITION MADE BY THE A SSESSING OFFICER 18 I.T.(SS) A. NO.54/MDS/05 TO THE EXTENT OF ` 62,64,288/- FOR THE ASSESSMENT YEAR 1995-96 AND ` 47,99,648/- FOR THE ASSESSMENT YEAR 1996-97 IS DELE TED. 24. THE NEXT ISSUE ARISES FOR CONSIDERATION IS ASSE SSMENT OF ` 13,56,340/- AS UNDISCLOSED INCOME. 25. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSE E, SUBMITTED THAT THE ASSESSING OFFICER MADE ADDITION OF ` 13,56,340/- ON THE GROUND THAT THE ASSESSEE HAS RECEIVED PAYMENT OF ` 2.50 PER US$ FOR ARRANGING DONATION TO DHARMAMBAL NAMASIVAYAM TR UST. ACCORDING TO THE LD. COUNSEL, SEIZED MATERIAL INDIC ATES THAT THE ASSESSEE ARRANGED DONATION TO DHARMAMBAL NAMASIVAYA M TRUST FROM SHRI NADATHUR VARADHAN. HOWEVER, IT DOES NOT INDICATE ANY PREMIUM RECEIVED BY THE ASSESSEE. ACCORDING TO THE LD. COUNSEL, THE SEIZED MATERIAL DOES NOT INDICATE ANY COMMISSIO N RECEIVED BY THE ASSESSEE. 26. ON THE CONTRARY, SHRI SHIVA SRINIVAS, THE LD. D EPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE SEIZED MATERIAL INDICATES THAT THE ASSESSEE HAS RECEIVED ` 2.50 PER US$ FOR ARRANGING DONATION TO DHARMAMBAL NAMASIVAYAM TRUST. THE ASSESSING OFFICE R BY LETTER DATED 19.11.2004 REQUESTED THE ASSESSEE TO EXPLAIN WHY THE 19 I.T.(SS) A. NO.54/MDS/05 COMMISSION SHOULD NOT BE TREATED AS INCOME. THE AS SESSEE HAS NOT FILED ANY OBJECTION BEFORE THE ASSESSING OFFICE R. THEREFORE, THE COMMISSION WAS ADDED AS INCOME OF THE ASSESSEE. 27. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE SEIZED MATERIAL DISCLOSES THAT THE ASSESSEE HAS ARRANGED P AYMENT OF DONATION TO DHARMAMBAL NAMASIVAYAM TRUST. AS ALREA DY OBSERVED IN THE EARLIER PART OF THIS ORDER, THE ASSESSEE HAS ACTED AS A MIDDLEMAN FOR ARRANGING DONATION TO THE TRUST ESTAB LISHED BY SHRI A.N. DYANESWARAN. EVEN THOUGH THE REVENUE CONTENDS THAT THE ASSESSEE RECEIVED COMMISSION AT THE RATE OF ` 2.5 PER US$, NO MATERIAL IS AVAILABLE ON RECORD TO INDICATE THAT TH E ASSESSEE HAS RECEIVED ANY COMMISSION. THERE IS NO MATERIAL TO I NDICATE THAT THE ASSESSEE ORGANIZED ANY DONATION IN US DOLLAR. THER EFORE, THIS TRIBUNAL IS UNABLE TO UPHOLD THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY, THE ORDER OF THE ASSESSING OFFICER IS SET ASIDE AND THE ADDITION OF ` 13,56,340/- IS DELETED. 28. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADD ITION OF ` 2,16,000/-, THE CASH FOUND FROM THE ASSESSEE. 20 I.T.(SS) A. NO.54/MDS/05 29. WE HAVE HEARD SHRI S. SRIDHAR, THE LD.COUNSEL F OR THE ASSESSEE AND SHRI SHIVA SRINIVAS, THE LD. DEPARTMEN TAL REPRESENTATIVE. ACCORDING TO THE LD. DEPARTMENTAL REPRESENTATIVE, IN THE FIRST ROUND OF LITIGATION, THIS TRIBUNAL DID NOT REMAND THIS TO THE FILE OF THE ASSESSING OFFICER, THEREFORE, THE ADDIT ION MADE BY THE ASSESSING OFFICER HAS ATTAINED FINALITY, HENCE, IT CANNOT BE DISTURBED. IT IS NOT IN DISPUTE THAT IN THE ORIGIN AL ASSESSMENT, THE ASSESSING OFFICER MADE ADDITION OF ` 2,16,000/- AND IN THE FIRST ROUND OF LITIGATION, THE SAME WAS NOT REMITTED BACK TO TH E FILE OF THE ASSESSING OFFICER, THEREFORE, AS RIGHTLY SUBMITTED BY THE LD. D.R., THE ADDITION MADE IN THE FIRST ROUND OF LITIGATION ATTAINED FINALITY. MOREOVER, THIS SUM OF ` 2,16,000/- WAS FOUND IN THE POSSESSION OF THE ASSESSEE WHEN HE ENTERED THE PREMISES OF SHRI A .N. DYANESWARAN, THEREFORE, IT IS FOR THE ASSESSEE TO EXPLAIN HOW HE WAS IN POSSESSION OF ` 2,16,000/- IN THE ABSENCE OF ANY EXPLANATION, THIS TRIBUNAL DO NOT FIND ANY REASON T O INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SA ME IS CONFIRMED. 30. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADD ITION OF ` 30,00,000/- AS UNDISCLOSED INCOME IN RESPECT OF TRA NSACTION ENTERED INTO BY SHRI PALANIAPPAN RAMASWAMY. 21 I.T.(SS) A. NO.54/MDS/05 31. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSE E, SUBMITTED THAT THE ASSESSING OFFICER OBSERVED IN THE ASSESSME NT ORDER THAT THE ASSESSEE WAS FOUND IN POSSESSION OF THREE SETS OF RECEIPTS OF ` 10 LAKHS ISSUED BY SHRI PALANIAPPAN RAMASWAMY. THE ASSESSEE EXPLAINED BEFORE THE ASSESSING OFFICER THAT SHRI PA LANIAPPAN RAMASWAMY INTENDED TO SELL HIS OFFICE SPACES IN THE THIRD FLOOR OF CITY CENTRE POINT. SHRI PALANIAPPAN RAMASWAMY HAS HANDED OVER ALL THE PAPERS AND REQUESTED THE ASSESSEE TO ADVISE WHETHER IT COULD BE SOLD AT THAT STAGE. THE ASSESSEE ADVISED SHRI PALANIAPPAN RAMASWAMY TO COMPLETE THE CONSTRUCTION OF THE PREMISES FIRST, THEN GO FOR SALE SO THAT HE CAN HAV E GOOD RETURN ON THE INVESTMENT. THE ASSESSEE HAS ALSO ADVISED SHRI PALANIAPPAN RAMASWAMY TO GO FOR LOAN. IN FACT, THE ASSESSEE IN TENDED TO HAND OVER ALL THE PAPERS TO SHRI PALANIAPPAN RAMASWAMY. SINCE ALL THE RECEIPTS WERE FOUND IN POSSESSION OF THE ASSESSEE, THE ASSESSING OFFICER PRESUMED THAT THE ASSESSEE MIGHT HAVE PAID MONEY TO SHRI PALANIAPPAN RAMASWAMY. REFERRING TO THE STATEMENTS RECORDED FROM SHRI PALANIAPPAN RAMASWAMY AND THE ASSESSEE, T HE LD.COUNSEL SUBMITTED THAT THEY HAVE CLEARLY STATED THAT WHAT WAS GIVEN TO THE ASSESSEE WAS ONLY TO GET THE ADVICE. IN VIEW OF THE 22 I.T.(SS) A. NO.54/MDS/05 STATEMENT GIVEN BY THE ASSESSEE, AT THE INITIAL STA GE ITSELF, THERE CANNOT BE ANY ADDITION. 32. ON THE CONTRARY, SHRI SHIVA SRINIVAS, THE LD. D EPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE WAS FOU ND IN POSSESSION OF THREE SETS OF ` 10 LAKHS, EACH ISSUED BY SHRI PALANIAPPAN RAMASWAMY TOGETHER WITH AGREEMENT FOR S ALE OF THREE OFFICE SPACES IN CITY CENTRE POINT. ACCORDING TO T HE LD. D.R., SHRI PALANIAPPAN RAMASWAMY, BEING A SENIOR EXECUTIVE OF THE BANK AND BUSINESSMAN, HE WOULD NOT HAVE PARTED WITH RECEIPTS WITHOUT RECEIVING ANY MONEY. THE RECEIPTS ALSO INCLUDED AG REEMENT FOR SALE. THEREFORE, ACCORDING TO THE LD. D.R., THE AS SESSING OFFICER FOUND THAT EVEN THE STATEMENT OF SHRI PALANIAPPAN R AMASWAMY IS NOT OF ANY ASSISTANCE TO THE ASSESSEE. ACCORDING T O THE LD. D.R., THE STATEMENT OF SHRI PALANIAPPAN RAMASWAMY AND THE ASSESSEE ARE CONTRARY TO EACH OTHER. THEREFORE, THE ASSESSI NG OFFICER HAS RIGHTLY ASSESSED A SUM OF ` 30,00,000/- AS UNDISCLOSED INCOME FOR THE BLOCK PERIOD. 33. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT AGREEMENT FOR SALE TOGETHER WITH THREE SETS RECEIPTS OF 23 I.T.(SS) A. NO.54/MDS/05 ` 10 LAKHS EACH, WAS FOUND BY THE REVENUE AUTHORITIES . THE ASSESSEE CLAIMS THAT THE AGREEMENT WAS GIVEN TO THE ASSESSEE ALONG WITH RECEIPT FOR SALE OF THREE OFFICE SPACES IN THE CITY CENTRE POINT. IT IS NOT IN DISPUTE THAT SHRI PALANIAPPAN RAMASWAMY OWNED THREE OFFICE SPACES IN CITY CENTRE POINT. THE SAID SHRI PALANIAPPAN RAMASWAMY HIMSELF ADMITTED THAT THE RECEIPTS WERE G IVEN TO THE ASSESSEE FOR SALE OF OFFICE SPACES. THE ASSESSING OFFICER AFTER REFERRING TO STATEMENT GIVEN BY SHRI PALANIAPPAN RA MASWAMY SAYS THAT THE STATEMENT IS OF NO HELP. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHEN A PERSON, WHO GAVE RECEIPTS AND A GREEMENT FOR SALE, CLAIMS THAT THE SAME WAS FOR SALE OF OFFICE S PACES, THE SAME CANNOT BE BRUSHED ASIDE SO LIGHTLY. THE ASSESSEE C LAIMED BEFORE THE ASSESSING OFFICER THAT SAID SHRI PALANIAPPAN RA MASWAMY WANTED TO SELL THE OFFICES SPACES. HOWEVER, THE AS SESSEE ADVISED TO TAKE BANK LOAN AND GO FOR SALE AFTER CONSTRUCTIO N. IN VIEW OF THIS STATEMENT, WHICH IS AVAILABLE ON RECORD, THIS TRIBU NAL IS OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER HAD N O MATERIAL TO PRESUME THAT THE ASSESSEE HAS PAID ` 30 LAKHS TO SHRI PALANIAPPAN RAMASWAMY FOR PURCHASE OF OFFICE SPACES IN CITY CEN TRE POINT. 24 I.T.(SS) A. NO.54/MDS/05 34. WHEN SHRI PALANIAPPAN RAMASWAMY HIMSELF CLAIMS THAT THE RECEIPT WAS GIVEN TO THE ASSESSEE FOR SALE OF OFFIC E SPACES, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE RECE IPT WAS GIVEN TO THE ASSESSEE FOR SALE OF OFFICES SPACES AS WANTED B Y SHRI PALANIAPPAN RAMASWAMY AND THIS DOES NOT IN ANY WAY INDICATE THAT THE ASSESSEE HAS PAID ` 30 LAKHS TO SHRI PALANIAPPAN RAMASWAMY. IN THE ABSENCE OF ANY FURTHER MATERIAL TO SUBSTANTI ATE THAT THE ASSESSEE PAID ` 30 LAKHS TO SHRI PALANIAPPAN RAMASWAMY FOR PURCHASE OF OFFICE SPACES AT CITY CENTRE POINT, THI S TRIBUNAL IS OF THE CONSIDERED OPINION THAT MERE PRESUMPTION THAT SHRI PALANIAPPAN RAMASWAMY WOULD NOT HAVE PARTED WITH RECEIPT WITHOU T RECEIVING MONEY, CANNOT BE A REASON FOR MAKING ANY ADDITION. THIS BEING A BLOCK ASSESSMENT UNDER SECTION 158BD OF THE ACT, TH E ASSESSING OFFICER CANNOT PRESUME THAT SHRI PALANIAPPAN RAMASW AMY WOULD NOT HAVE GIVEN RECEIPT WITHOUT RECEIVING MONEY. TH E ASSESSING OFFICER OUGHT TO HAVE EXAMINED FURTHER AND POINTED OUT WHETHER THE ASSESSEE IN FACT PAID MONEY TO SHRI PALANIAPPAN RAM ASWAMY. SINCE SUCH AN EXERCISE WAS NOT DONE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT ON MERE PRESUMPTION, THERE CANNOT BE ANY ADDITION IN THE BLOCK PERIOD. THEREFORE, THIS TRIB UNAL IS UNABLE TO 25 I.T.(SS) A. NO.54/MDS/05 UPHOLD THE ORDER OF THE LOWER AUTHORITY. THE ORDER OF THE ASSESSING OFFICER IS SET ASIDE AND THE ADDITION OF ` 30 LAKHS IS DELETED. 35. THE NEXT ISSUE ARISES FOR CONSIDERATION IS ADDI TION OF ` 1,75,000/- WHICH IS EQUIVALENT TO USD 5014 FOUND IN POSSESSION OF THE ASSESSEE AT THE TIME OF SEARCH. 36. WE HAVE HEARD SHRI S. SRIDHAR, THE LD.COUNSEL F OR THE ASSESSEE AND SHRI SHIVA SRINIVAS, THE LD. DEPARTMEN TAL REPRESENTATIVE. IT IS NOT IN DISPUTE THAT THE REVE NUE AUTHORITIES FOUND USD 5014 WHEN THE ASSESSEE ENTERED THE PREMIS ES OF SHRI A.N. DYANESWARAN DURING THE COURSE OF SEARCH OPERAT ION. THE ASSESSEE APPEARS TO HAVE CLAIMED THAT THE SAME WAS BELONGING TO ONE SMT. SITA NAGARAJ. REFERRING TO THE ASSESSMENT ORDER, THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT ON ENQUI RY, THE ASSESSING OFFICER FOUND THAT THE SAID USD 5014 BELO NGING TO SMT. SITA NAGARAJ. MERELY BECAUSE THE ASSESSEE COULD NO T PRODUCE CONFIRMATION LETTER FROM SMT. SITA NAGARJ, THE SAME CANNOT BE ASSESSED IN THE HANDS OF THE ASSESSEE. WHEN THE AS SESSING OFFICER FOUND ON ENQUIRIES CONDUCTED WITH SMT. SITA NAGARJ, IT WAS CONFIRMED BY HER THAT THE US DOLLARS BELONGED TO HE R. MERELY BECAUSE NO WRITTEN CONFIRMATION WAS FILED BY THE AS SESSEE, IT CANNOT 26 I.T.(SS) A. NO.54/MDS/05 BE A REASON FOR MAKING ADDITION. BY LETTER DATED 1 5.12.2004, THE ASSESSEE INFORMED THE ASSESSING OFFICER THAT THE US DOLLARS BELONGED TO SMT. SITA NAGARAJ. THE ASSESSING OFFIC ER HAS NOT CONDUCTED ANY ENQUIRY WITH REGARD TO THE OWNERSHIP OF US DOLLARS. THEREFORE, THERE IS NO JUSTIFICATION FOR MAKING ADD ITION IN THE HANDS OF THE ASSESSEE. ACCORDINGLY, THE ORDER OF THE ASS ESSING OFFICER IS SET ASIDE AND THE ADDITION MADE BY THE ASSESSING OF FICER IS DELETED. 37. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON 20 TH APRIL, 2017 AT CHENNAI. SD/- SD/- ( . . ' #$ ) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESAN) & / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 6 /DATED, THE 20 TH APRIL, 2017. KRI. / -1#7 8741 /COPY TO: 1. *+ /APPELLANT 2. -.*+ /RESPONDENT 3. ' 91 /CIT, CENTRAL-II, CHENNAI-34 4. 7: -1 /DR 5. ; < /GF.