RCI Power Limited, CHENNAI V. DCIT, CHENNAI

ITA 1690/CHNY/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7106 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 17-07-2014
• Assessment Year: 1998-1999
• Appeal Filed On: 13-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N MADHAVANJCIT
• Assessee Lawyers: S SRIDHAR
• Keywords: Unexplained cash credit; Unexplained investment; Additional evidence
• Section: 143(3); 133A; 68; 69; 148; 6

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . , , !' # , $ % BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./ I.T.A.NO.1690/MDS./2014 ( / ASSESSMENT YEAR : 1998-99 ) M/S.RCI POWER LTD., 16,CENOTAPH ROAD, CHENNAI 600 018. VS. THE DY. COMMISSIONER OF INCOME TAX, COMPANY CIRCLE V(3), CHENNAI. PAN AACCR 0377 A ( &' / APPELLANT ) ( #(&' / RESPONDENT ) / APPELLANT BY : SHRI S.SRIDHAR,ADVOCATE / RESPONDENT BY : SHRI N.MADHAVAN,JCIT D.R. / DATE OF HEARING : 17.07.2014 ! /DATE OF PRONOUNCEMENT : 08.08.2014 ) / O R D E R PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED B Y THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-V, CHENNA I DATED ITA NO.1690/MDS/14 2 25.02.2014 IN ITA NO.602/13-14(A)-V PASSED U/S 143( 3 ) READ WITH SECTION 250 OF THE ACT. 2. THE ASSESSEE HAS RAISED SEVEN ELABORATE GROUNDS IN ITS APPEAL; HOWEVER, THE CRUX OF THE ISSUE IS THAT THE ASSESSEE IS AGGRIEVED BY THE ORDER OF THE LD. CIT(A) FOR HAVEN ING SUSTAINED THE ADDITIONS MADE BY THE LD. ASSESSING OFFICER FOR ` 1,67,87,132/- AS UNEXPLAINED INVESTMENT TOWARDS PROJECT EXPENSES WIT HOUT ASSIGNING PROPER REASONS AND JUSTIFICATION. 3.1. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSE SSEE IS A LIMITED COMPANY, ENGAGED IN THE BUSINESS OF ERECTION, OPERA TION AND MAINTENANCE OF WIND MILLS. DURING THE RELEVANT AS SESSMENT YEAR 1998-99, THE ASSESSEE COMPANY WAS THE SUBSIDIARY CO MPANY OF M/S.WESCARE (I) LTD., FILED ITS RETURN OF INCOME DE CLARING NIL INCOME. THEREAFTER, SURVEY U/S. 133A OF THE ACT WAS CONDUCT ED IN THE CASE OF M/S.WESCARE (I) LTD., THE HOLDING COMPANY, AND AS A RESULT, NOTICE WAS ISSUED TO THE ASSESSEE U/S. 147RWS 148 OF THE A CT. DURING THE COURSE OF THE SURVEY PROCEEDINGS IT WAS OBSERVED FR OM THE BOOKS OF ITA NO.1690/MDS/14 3 ACCOUNTS OF M/S.WESCARE (I) LTD., THAT THE ACCOUNT OF THE ASSESSEE COMPANY SHOWED CREDIT BALANCE OF ` 1,67,87,132/-. HOWEVER, IN THE BOOKS OF THE ASSESSEE COMPANY THE CORRESPONDING ENT RY FOR THE AFORESAID AMOUNT WAS NOT MADE. IT WAS EXPLAINED BY THE HOLDING COMPANY THAT THIS ENTRY WAS REVERSED DURING THE SUC CEEDING YEAR AND THEREFORE, THERE WAS NO OCCASION FOR THE ASSESSEE C OMPANY TO RECORD SUCH TRANSACTIONS IN ITS BOOKS OF ACCOUNTS. HOWEVER IT APPEARS THAT THE ASSESSING OFFICER HAD MADE THE ADDITION FOR THE AMOUNT OF ` 1,67,87,132/- IN THE HANDS OF BOTH THE HOLDING COM PANY AND THE SUBSIDIARY COMPANY IE., THE ASSESSEE COMPANY U/S. 6 8 & 69 OF THE ACT RESPECTIVELY BECAUSE THE HOLDING COMPANY HAD AL SO NOT FURNISHED ANY CONFIRMATION STATEMENT FROM ITS SUBSIDIARY COMP ANY. THE HOLDING COMPANY M/S.WESCARE DID NOT FILE ANY APPEAL AGAINST THIS ADDITION HOWEVER FILED PETITION BEFORE THE SETTLEMENT COMMIS SION. WHILE AS THE SUBSIDIARY COMPANY BEING THE ASSESSEE COMPANY F ILED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY BY STATING THA T PROVISIONS OF SECTION 69 WOULD NOT BE APPLICABLE TO THE CASE OF THE ASSES SEE BECAUSE THE ASSESSEE HAD NOT MADE ANY INVESTMENT WHICH IS NOT R ECORDED IN ITS BOOKS OF ACCOUNTS. IT WAS FURTHER STATED THAT THE ADDITION CANNOT BE ITA NO.1690/MDS/14 4 MADE IN THE HANDS OF THE ASSESSEE COMPANY FOR ANY E NTRY THAT IS MADE IN THE BOOKS OF M/S.WESCARE (I) LTD WHICH THE ASSESSEE COMPANY NEITHER HAVE ANY CONTROL OF NOR AWARE OFF . CONVINCED BY THE ARGUMENT OF THE ASSESSEE, THE LD. CIT (A) HAD D ELETED THE ADDITION. WHEN THE MATTER CROPPED UP BEFORE THE TRI BUNAL, CERTAIN ADDITIONAL EVIDENCES WERE PRODUCED AND THEREFORE TH E TRIBUNAL REMITTED THE MATTER BACK TO THE FILE OF THE LD. ASS ESSING OFFICER FOR VERIFICATION OF THE EVIDENCE AND DECIDING THE MATTE R AFRESH. THE DETAILS OF THE ADDITIONAL EVIDENCE ARE REPRODUCED H EREIN BELOW FOR REFERENCE:- (I) AFFIDAVIT OF M/S.WESCARE INDIA LTD. (II) NOTE ON PUTLURU PROJECT FILED BY M/S.WESCARE INDIA LTD. IN SETTLEMENT COMMISSION PETITION AT PAGE 6 OF APB-1 (III) ORDERS OF SETTLEMENT COMMISSION IN M/S.WESCAR E INDIA LTD. WITH BREAK-UP OF ADDITIONAL INCOME OFFERED. (IV) LEDGER ACCOUNT OF PUTLURU PROJECT IN WESCARE I NDIA LTD. (V) STATEMENTS FILED BY RCI POWER LTD IN ASSESSMEN T FOR THE ASSESSMENT YEAR 1998-99. ITA NO.1690/MDS/14 5 (VI) STATEMENTS FILED BY RCI POWER LTD IN ITS ASSE SSMENT FOR THE ASSESSMENT YEAR 1999-2000 (VII) ASSESSMENT YEAR OF RCI POWER LTD FOR 1999-20 00. 3.2. DURING THE SECOND ROUND BEFORE THE LD. ASSE SSING OFFICER, THE ASSESSEE COMPANY HAD SUBMITTED AS FOLLOWS:- 1. DURING THE A.Y.1998-99 M/S.WESCARE (INDIA) LTD H AS INCURRED A SUM OF ` 1,67,87,132/- TOWARDS THE PROJECT IN PUTLURU IN AN DHRA PRADESH. THE AMOUNT INCURRED ON THE PROJECT WAS DEBITED TO PUTLU RU PROJECT ACCOUNT AND CREDITED TO RCI POWER LTD. THE AMOUNT WAS GROU PED UNDER CAPITAL WORK IN PROGRESS. IN THE NEXT YEAR I.E. FINANCIAL YEAR 1998-99 I.E. A.Y. 1999-2000 THE ENTRY WAS REVERSED BY M/S.WESCARE (IN DIA) LTD., BY CREDITING RCI POWER LTD. THE AMOUNT INCURRED WAS DE BITED TO PUTLURU PROJECT EXPENSES AND GROUPED UNDER WORK IN PROGRESS IN THEIR BOOKS. 2. M/S.RCI POWER LTD DID NOT HAVE ANY INCOME AS ONLY EXPENSES OF CAPITAL IN NATURE WAS INCURRED AND NO INCOME WAS GENERATED IN THE A.Y.1998- 99 AND A.Y.1999-2000. 3. THE ASSESSMENT FOR THE A.Y 1999-2000 WAS COMP LETED U/S. 143(3) AND NIL INCOME WAS ASSESSED. THE INTER COMPANY TRANSACT ION BETWEEN RCI POWER LTD AND M/S.WESCARE INDIA LTD. WAS ALSO SUBMI TTED WHEREIN THE BALANCES BETWEEN BOTH COMPANIES WERE RECONCILED AND NO DIFFERENCE WAS THERE. ITA NO.1690/MDS/14 6 4. AS HAS BEEN HELD IN LD. CIT VS. P. K. NOORJAHA N IN THE HONBLE SUPREME COURT (1999) 237 IT 570 SC, IT WAS NOT POSS IBLE FOR THE ASSESSEE TO EARN INCOME IN THE COURSE OF ASSESSMENT YEAR AS THE COMPANY HAD STILL NOT STARTED ANY OPERATION. 5. AS THE AMOUNT IS ACCOUNTED IN THE HANDS OF M/S. WESCARE INDIA LTD. AS PUTLURU PROJECT AND IN THE SUBSEQUENT YEAR REVERSED BY CREDITING RCI POWER LTD THE AMOUNT THAT IS DEEMED AS INCOME U/S. 69 MAY BE DELETED. 3.3. THE ASSESSEE HAD FURTHER SUBMITTED A LETTER DATED. 28.12.06 BEFORE THE LD. ASSESSING OFFICER WHEREIN IT WAS STA TED THAT:- WITH REFERENCE TO THE ABOVE, WE WOULD LIKE TO INFO RM YOU THAT, DURING THE A.Y.1998-99 M/S.WESCARE INDIA LTD. BOOKED A SUM OF ` 1,67,87,132/- AS INVENTORY WORK IN PROGRESS IN ITS BOOKS WITH THE IN TENTION TO TAKE OVER THE PUTLURU PROJECT. SUBSEQUENTLY OUR COMPANY HAS TAKE N OVER THE PROJECT AND HENCE THIS ENTRY WAS REVERSED IN THE BOOKS OF M /S.WESCARE INDIA LTD. IN THIS REGARD, WE ARE ENCLOSING HEREWITH THE LEDGE R ACCOUNT COPY OF OUR COMPANYS ACCOUNT AS APPEARING IN THE BOOKS OF M/S. WESCARE INDIA LTD. FROM WHICH YOU MAY OBSERVE THAT THE ENTRY BEING REV ERSED. THIS HAS NO REVENUE IMPACT BOTH IN THE HANDS OF OUR COMPANY AS WELL AS M/S.WESCARE INDIA LTD. HOWEVER, THIS AMOUNT HAS ALREADY BEEN AD DED TO THE TOTAL AMOUNT OF M/S.WESCARE INDIA LTD., FOR THE A.Y.1998- 99 AS UNEXPLAINED ITA NO.1690/MDS/14 7 INVESTMENT AGAINST WHICH THE COMPANY HAS FILED ITS APPLICATION BEFORE SETTLEMENT COMMISSION. 3.4. HOWEVER, THE LD. ASSESSING OFFICER AFTER EX AMINING THE ORDER OF THE SETTLEMENT COMMISSION IN THE CASE OF M/S.WE SCARE INDIA LTD. OBSERVED AS UNDER:- BUT CONTRARY TO THE CLAIM OF THE ASSESSEE THIS AMOU NT OF ` 1,67,87,132/- WAS NOT OFFERED IN THE HANDS OF M/S.WESCARE INDIA L TD. DURING THE COURSE OF HEARING SETTLEMENT COMMISSION PROCEEDINGS. IN P ARA 11 OF THE SETTLEMENT COMMISSION ORDER IT HAS BEEN STATED BY T HE ASSESSEES REPRESENTATIVE THAT NO AMOUNT IS REQUIRED TO BE OF FERED IN RESPECT OF DIFFERENCE BETWEEN THE BOOKS OF THE APPELLANT AND T HE BOOKS OF RCI POWER PRIVATE LTD IN THE CONTEXT OF INTER-SECTION T RANSACTIONS FOR WHICH RECONCILIATION OF ACCOUNTS ARE AVAILABLE IN PAPER BOOKS. THUS IT IS CLEAR THAT THE RESPECTIVE AMOUNT BEING ` 1,67,87,132/- WAS NOT TAKEN INTO ACCOUNT IN THE SETTLEMENT COMMISSION ORDER OF M/S.W ESCARE INDIA LTD. 3.5. FROM THE ABOVE THE LD. ASSESSING OFFICER MADE THE FOLLOWING FINDING AND ADDED THE AMOUNT OF ` 1,67,87,132/- TO THE INCOME OF THE ASSESSEE U/S. 69 OF THE ACT. ITA NO.1690/MDS/14 8 (I) M/S.WESCARE INDIA LTD. HOLDING COMPANY HAD INTR ODUCED A SUM OF ` 1,67,87,132/- IN ITS BOOKS OF ACCOUNTS BY CREDITING THE SAME TO THE ACCOUNT OF THE SUBSIDIARY COMPANY THE A SSESSEE. (II) DURING THE COURSE OF SETTLEMENT COMMISSION PR OCEEDINGS, THE HOLDING COMPANY DID NOT OFFER THIS AMOUNT AS UNDISC LOSED INVESTMENT (III) THE ASSESSEE COMPANY HAD NOT PASSED THE CORR ESPONDING ENTRY IN ITS BOOKS OF ACCOUNTS PURSUANT TO THE ENTR Y MADE BY THE HOLDING COMPANY IN THEIR BOOKS. (IV) THE ASSESSEE COMPANY HAD STATED THAT DURING TH E SUBSEQUENT ASSESSMENT YEAR THE ASSESSEE COMPANY HAD TAKEN OVER THE PUTLURU PROJECT FROM ITS HOLDING COMPANY. 4. ON APPEAL, THE LD. CIT (A) AGREED WITH THE FIN DINGS OF THE LD. ASSESSING OFFICER AND CONFIRMED HIS ORDER BY OBSER VING AS UNDER:- 6.3. IT IS A FACT THAT A SUM OF ` 1,67,87,132/- WAS INTRODUCED IN THE BOOKS OF M/S.WESCARE INDIA LTD. AS INVESTED BY THE APPELL ANT COMPANY. DURING THE COURSE OF SETTLEMENT COMMISSION PROCEEDINGS M/S .WESCARE INDIA LTD. ALSO DID NOT OFFER THIS AMOUNT FOR ASSESSMENT. THE RE IS NO CORRESPONDING ENTRY IN THE BOOKS OF THE ASSESSEE. THE ASSESSEE JU ST REPLIED THAT THE SAID SUM WAS BOOKED AS INVENTORY WORK IN PROGRESS BY M/S .WESCARE INDIA LTD. ITA NO.1690/MDS/14 9 IN ITS BOOKS AND THAT SUBSEQUENTLY THE SAID PUTLURU PROJECT WAS TAKEN OVER BY THE ASSESSEE AND HENCE THE SAID ENTRY WAS REVERS ED IN THE BOOKS OF M/S.WESCARE INDIA LTD. ONCE THE UNEXPLAINED CREDIT WAS INTRODUCED IN THE NAME OF THE ASSESSEE IN THE BOOKS OF M/S.WESCARE IN DIA LTD. AND IT WAS NOT OFFERED FOR ASSESSMENT THE M/S.WESCARE INDIA LT D. SIMPLY BY THE FACT THAT THIS ENTRY HAS BEEN REVERSED IN THE SUBSEQUENT YEAR BY ITSELF WOULD NOT GO TO PROVE THAT THE CREDITS ARE EXPLAINED. TH US AN ENTRY IN FAVOUR OF THE ASSESSEE WHICH WAS NOT PROPERLY EXPLAINED BY TH E ASSESSEE WOULD PARTAKE THE CHARACTER OF INVESTMENT. THEREFORE I AM IN AGREEMENT WITH THE VIEW TAKEN BY THE AO THAT THE INVESTMENT OF ` 1,67,87,132/- MADE BY THE ASSESSEE WHICH WAS NOT PROPERLY EXPLAINED THE SAID SUM HAS BEEN BROUGHT TO TAX IN THE HANDS OF THE ASSESSEE U/S. 69 OF THE IT ACT IS CONFIRMED AND THERE IS NO INFIRMITY IN THE ADDITION MADE BY THE AO WHICH IS AMPLY SUPPORTED THE RATIO HELD IN THE DECISION OF T HE ALLAHABAD HIGH COURT IN THE CASE OF JAGMOHAN RAM CHANDRA & GIRISH NARAIN VS. LD. CIT 247 ITR 405. THE GROUNDS OF APPEAL FILED ALONG WITH ADD ITIONAL EVIDENCES FILED HAVE BEEN PERUSED AND THE SAME HAVE BEEN REJECTED. 5. LD. A.R. ARGUED BEFORE US BY STATING THAT THE H OLDING COMPANY OF THE ASSESSEE COMPANY M/S.WESCARE INDIA LTD., HAD SET UP THE PROJECT AT PUTLURU BY INCURRING AN EXPENDITURE OF ` 1,67,87,132/-. ENTRIES WERE RECORDED IN ITS BOOKS BY DEBITING THE PUTLURU PROJECT ACCOUNT AND CREDITING THE ASSESSEES ACCOUNT. WHEN THESE FACTS CAME TO LIGHT, THE REVENUE HAD MADE ADDITIONS IN TH E HANDS OF M/S.WESCARE INDIA LTD. & THE ASSESSEE SIMULTANEOUSL Y. SINCE THE ITA NO.1690/MDS/14 10 ASSESSEE COMPANY HAD NOTHING TO DO WITH THE PROJECT , THE LD. CIT (A) ON THE EARLIER OCCASION HAD DELETED THE ADDITIO N. M/S.WESCARE INDIA LTD. HAD CARRIED THE MATTER BEFORE THE SETTLE MENT COMMISSION AND ORDERS ARE PASSED CONSIDERING THIS ISSUE ALSO. THUS ONCE THE MATTER IS SETTLED, THERE WAS NO NECESSITY FOR THE L D. ASSESSING OFFICER TO SUSTAIN THE SAME ADDITION IN THE HANDS OF THE AS SESSEE. THE LD. CIT (A) HAD SIMPLY STATED IN HIS ORDER THAT THE ASS ESSEES REPRESENTATIVE HAD CANVASSED BEFORE THE SETTLEMENT COMMISSION THAT NO AMOUNT IS REQUIRED TO BE OFFERED IN RESPECT OF DIFFERENCE BETWEEN THE BOOKS OF THE APPELLANT ACCOUNT AND THE BOOKS OF THE RCA POWER LTD., IN THE CONTEXT OF INTER-SECTION TRA NSACTIONS FOR WHICH RECONCILIATION OF ACCOUNT ARE AVAILABLE IN PAPER BO OK, HOWEVER THE FINDINGS MADE BY THE SETTLEMENT COMMISSION ON THIS ISSUE WAS NOT DISCUSSED IN HIS ORDER. THE LD. A.R. FURTHER SUBMI TTED THAT THE ASSESSEE COMPANY DID NOT INFUSE ANY FUNDS FROM UNDI SCLOSED SOURCE TO ACQUIRE THIS ASSET AND ACCORDINGLY NO ENTRIES WE RE MADE IN THE RELEVANT ASSESSMENT YEAR. THEREFORE IT WAS ARGUED THAT THE ADDITION MADE BY THE LD. ASSESSING OFFICER WHICH WAS FURTHER CONFIRMED BY THE LD. CIT (A) IS ERRONEOUS AND DESERVES TO BE DEL ETED ITA NO.1690/MDS/14 11 6. LD. D.R ON THE OTHER HAND RELIED ON THE ORDERS OF THE LD. ASSESSING OFFICER AND THE LD. CIT (A) AND FURTHER S UBMITTED THAT THE HOLDING COMPANY OF THE ASSESSEE HAD TRANSFERRED THE ASSET TO THE ASSESSEE COMPANY DURING THE SUBSEQUENT YEAR AND THE REFORE, THE ADDITION HAS TO BE SUSTAINED IN THE HANDS OF THE AS SESSEE COMPANY BECAUSE EITHER THE SOURCE FOR PROCURING THIS ASSET WAS NOT DISCLOSED IN THE HANDS OF THE HOLDING COMPANY NOR CONSIDERED BY THE SETTLEMENT COMMISSION. IT WAS THEREFORE PLEADED TH AT THE ORDER OF THE LD. CIT (A) MAY BE CONFIRMED. 7. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PE RUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE FACTS OF T HE CASE IT IS ABUNDANTLY CLEAR THAT THE ASSESSEE COMPANY HAD NOT PARTICIPATED IN SETTING UP THE PUTLURU PROJECT. DURING THE RELEVAN T ASSESSMENT YEAR, THE ASSESSEE COMPANY WAS NOT INVOLVED WITH ANY ACTI VITY WITH RESPECT TO THE PUTLURU PROJECT. THEREFORE THERE WAS NO OCCA SION FOR THE ASSESSEE COMPANY TO PASS ANY ENTRY IN REGARD TO PUT LURU PROJECT IN ITS BOOKS OF ACCOUNTS. IT ALSO TRANSPIRES THAT THE HOL DING COMPANY WAS INVOLVED IN THE DEVELOPMENT OF PUTLURU PROJECT. HO WEVER, IT APPEARS ITA NO.1690/MDS/14 12 THAT THE HOLDING COMPANY HAD PASSED ERRONEOUS ENTRI ES IN ITS BOOKS OF ACCOUNTS BY DEBITING THE PUTLURU PROJECT AND CRE DITING THE ASSESSEES ACCOUNT WHILE AS THE CORRECT ENTRY TO BE PASSED WOULD HAVE BEEN TO DEBIT THE PUTLURU PROJECT ACCOUNT AND CREDIT THE CASH /BANK/SUNDRY CREDITOR ACCOUNT AS THE CASE MAY BE. THEREFORE, THE LD. ASSESSING OFFICER HAD RIGHTLY MADE AN ADDITION IN T HE HANDS OF THE HOLDING COMPANY M/S.WESCARE INDIA LTD AGAINST WHICH THE COMPANY WENT BEFORE THE SETTLEMENT COMMISSION. THIS ISSUE WAS THUS VERY MUCH BEFORE THE SETTLEMENT COMMISSION WHILE PASSING ORDERS AGAINST THE HOLDING COMPANY M/S.WESCARE INDIA LTD. THUS, WHEN THE ISSUE HAD REACHED FINALITY BY THE ORDER OF THE SETT LEMENT COMMISSION IN THE CASE OF HOLDING COMPANY M/S.WESCARE INDIA LT D., IT WOULD BE ERRONEOUS TO MAKE THE SAME ADDITION IN THE HANDS OF THE ASSESSEE COMPANY. IT APPEARS THAT THE LD. ASSESSING OFFICE R HAD ONLY LOOKED INTO THE SUBMISSIONS MADE BY THE HOLDING COMPANY BE FORE THE SETTLEMENT COMMISSION BUT HAD NOT GONE INTO THE FIN DINGS OF THE SETTLEMENT COMMISSION WITH RESPECT TO THE RECONCILI ATION STATEMENTS DRAWN OUT BY THE HOLDING COMPANY WHICH WAS PART OF THE PAPER BOOK BEFORE THE SETTLEMENT COMMISSION. MOREOVER, THE REV ENUE HAS NOT ITA NO.1690/MDS/14 13 BROUGHT OUT ANY FINDINGS OF THE SETTLEMENT COMMISSI ON BEFORE US WHICH WOULD ADVERSELY AFFECT THE CASE OF THE ASSESS EE. IN THESE CIRCUMSTANCES, THE ADDITION MADE BY THE LD. ASSESSI NG OFFICER IN THE HANDS OF THE ASSESSEE IS ERRONEOUS EVEN THOUGH THE HOLDING COMPANY HAD TRANSFERRED THE PROJECT TO THE ASSESSEE DURING THE SUBSEQUENT ASSESSMENT YEAR. THEREFORE, WE ARE NOT IN AGREEMENT WITH THE ORDER OF THE LD. CIT (A) AND ACCORDINGLY W E HEREBY DIRECT THE LD. ASSESSING OFFICER TO DELETE THE ADDITION OF ` 1,67,87,132/- MADE IN THE HANDS OF THE ASSESSEE. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWE D. ORDER PRONOUNCED ON 8 TH AUGUST, 2014 AT CHENNAI. SD/- SD/- (CHALLA NAGENDRA PRASAD ) (A.MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 8 TH AUGUST, 2014. K S SUNDARAM. '# $%&% /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. '() /CIT(A) 4. ' /CIT 5. %*+ , /DR 6. +-. /GF ITA NO.1690/MDS/14 14