ASSISTANT COMMISSIONER OF INCOME TAX, CHENNAI V. NALLAMMAL DEIVASIGAMANI VENKATACHALAM, ERODE

ITA 1291/CHNY/2023

AI Insights

The case involves appeals by the Revenue against the CIT(A)'s order which deleted substantial additions made to the assessee's income for the assessment years 2016-17 and 2017-18. The additions were based on documents seized during a search operation and a statement from an associate of another individual under investigation. The CIT(A) found no justification for these additions, a decision which the Tribunal supported, emphasizing that the assessee was not a public servant at the time and thus could not have received the alleged payments. The Tribunal's decision was influenced by government orders that clearly allocated ministerial roles, showing that the assessee was not the Revenue Minister during the relevant years.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 27191 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NILAY BARAN SOM
• Assessee Lawyers: Y. SRIDHAR; F
• Keywords: Set aside; Document seized; Documents seized
• Section: 250; 132

Judgement Text

" Page - 1 - of 5 आयकर अपीलीय अधिकरण, ‘‘ए’ न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH: CHENNAI श्री एबी टी. वर्की, न्यायिर्क सदस्य एवं श्री अयिताभ शुक्ला, लेखा सदस्य क े समक्ष BEFORE SHRI ABY T VARKEY, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER आयकर अपील सं./IT No.1291/Chny/2023, निर्ाारण वर्ा /Assessment Years: 2016-17 आयकर अपील सं./IT No.1292/Chny/2023, निर्ाारण वर्ा /Assessment Years: 2017-18 Asst.Commissioner of Income Tax, Central Circle-2(2) Chennai. Nallammal Deivasigamani Venkatachalam, No.68/5, Thoppupalayam, Perundurai, Erode, Tamil Nadu-638052 [PAN: ADNPV7602B] (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee by : Shri Y.Sridhar, F.C.A. प्रत्यर्थी की ओर से /Revenue by : Shri Nilay Baran Som, CIT सुिवाई की तारीख/Date of Hearing : 21.11.2024 घोर्णा की तारीख /Date of Pronouncement : 22.01.2025 आदेश / O R D E R PER AMITABH SHUKLA, A.M : These appeals are filed by the Revenue against the order bearing DIN & Order Nos.ITBA/APL/M/250/2023-24/1056439247(1), ITBA/APL/M/250/2023-24/1056439566(1) & ITBA/APL/M/250/2023- 24/1056439636(1) dated 22.09.2023 for the assessment years 2016-17 and 2017-18. Through the aforesaid appeal the Revenue has challenged order u/s 250 dated 22.09.2023 passed by the CIT(A), Chennai. Both the appeals are contesting identical issues and hence are adjudicated by way this common order. ITA No.1291 & 1292 /Chny/2023 :- 2 -: Page - 2 - of 5 2.0 Brief factual matrix of the case, narrated by the Ld. AO made addition of Rs.4,25,00,000/- and Rs. 2,95,00,000/- in assessee’s hands for AY-2016-17 and 2017-18 respectively. As per facts recorded by the Ld. AO search u/s 132 was conducted in the group cases of M/s. S.R.S. Mining, J.Sekar Reddy, K.Rathinam and S.Ramachandran on 08.12.2016. During the search incriminating documents were found from the premise of M/s. S.R.S. Mining vide annexure-ANN / MPK / NS / B&D / S-19 & S- 20 and ANN / KGAR / MPKSSR / B&D / S-1 to S-3 which alluded towards payments of amounts of monies to public servants. The Ld. AO in para 3.1 of his order for AY-2016-17 has given a tabular chart showing payments of monies allegedly to Shri N.D.Venkatachalam i.e. the assessee. The Ld. AO has recorded that Shri N.D.Venkatachalam was the state revenue minister of government of Tamilnadu during the impugned period. As per the seized documents, payments were made to some persons pseudonymously referred as “M-Revenue”, “Revenue Minister”, “R(M). According to the Ld.AO sworn statement of one Shri Sreenivasulu, associate of Shri J.Sekar Reddy was recorded on 10.12.2016 in which he confirmed that under instructions of Shri J.Sekar Reddy, K.Rathinam and S.Ramachandran he was maintaining the said documents in his hand writing and the amounts indicated and payments made to the indicated person. He further stated that M-Revenue and ITA No.1291 & 1292 /Chny/2023 :- 3 -: Page - 3 - of 5 other pseudonymous indicate to the minister of revenue. Relying upon the above seized material the Ld. AO proceeded to make additions of Rs.4,25,00,000/- and Rs.2,95,00,000/- in assessee’s hands for AY-2016- 17 and 2017-18 respectively. While making the impugned additions the Ld. AO relied upon the principles of preponderance of probability. The Ld. First Appellate Authority extensively analyzed the impugned addition as evident from para 6.6.1 to 6.6.31 of his combined appellate order dated 22.09.2023 for AYs 2015-16 to 2017-18. It was concluded that there is no justification with the Ld. AO to make the impugned additions on the strength of seized documents and mere statement of Shri Sreenivasulu. 3.0 We have heard rival submissions in the light of material available on records. The Ld. Counsel for the assessee submitted that the Ld.CIT(A) has extensively covered and analyzed varied facets of this case and after correctly understanding and appreciating the same, he has concluded that no case of any addition is made out in assessee’s case. Consequently he directed the Ld.AO to delete the addition. The Ld. Counsel for the assessee also submitted that while according relief the Ld. First Appellate Authority has appreciated the correct statutory provisions as well as judicial pronouncements surrounding the controversy. The Ld. DR would like to rely upon the order of the Ld. AO. It was submitted that the relief allowed by the Ld. CIT(A) is not based upon correct appreciation ITA No.1291 & 1292 /Chny/2023 :- 4 -: Page - 4 - of 5 of facts and records. It was argued that the incriminating documents found during search and the statement of Shri Sreenivasalu was sufficient evidence to charge the assessee with the blame of undisclosed income. Accordingly, it was vehemently requested to set aside the order of the Ld.CIT(A) and confirm the order of the Ld.AO. 3.1 We have noted that the Ld.CIT(A) has comprehensively analyzed intricate facts of the case in the light of contemporaneous status and judicial pronouncements governing the matter, inter-alia, rulings of Hon’ble Madras High Court. Accordingly, we are of the view that the order of the Ld. CIT(A) does not require any interference at this stage. While adjudicating the present appeal we have also taken judicial notice of orders passed by the Government of Tamilnadu while allocating portfolios to ministers. Thus we have considered GOMs numbers 864 dated 29.09.2014, 519 dated 23.05.2015 and 758 dated 30.08.2016. Perusal thereof clearly shows that the Revenue Minister for the government of Tamilnadu was one Thiru R.B.Udhyakumar, a person other than the present assessee. The entire addition based upon incriminating documents and the statement of Shri Sreenivasulu rests upon argument that the assessee as a public servant had obtained certain amount of monies from the M/s.SRS Mining. The GOMs of government of Tamilnadu discussed supra clearly show that the assessee was not the ITA No.1291 & 1292 /Chny/2023 :- 5 -: Page - 5 - of 5 minister for revenue and hence was not a public servant and therefore the entire hypothesis propounded by the revenue fails. Accordingly, considering the fact that no infirmity has been found in the order of the Ld.CIT(A) warranting an intervention as well as the fact that the assessee was not the revenue minister during the impugned period, we sustain the order of the Ld. CIT(A) and dismiss all the grounds of appeal raised by the revenue through ITA Nos. 1291 and 1292 for AY- 2016-17 and 2017-18 respectively. 4.0. In the result, both the appeals of the revenue are dismissed. Order pronounced on 22nd , January-2025 at Chennai. Sd/- ( एबी टी. वकी) (ABY T VARKEY) न्यानयक सदस्य / Judicial Member Sd/- (अयिताभ शुक्ला) (AMITABH SHUKLA) लेखा सदस्य /Accountant Member चेन्नई/Chennai, नदिांक/Dated: 22nd , January-2025. KB/- आदेश की प्रतितिति अग्रेतिि/Copy to: 1. अिीिार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT - Chennai 4. तिभागीय प्रतितिति/DR 5. गार्ड फाईि/GF "