Kamal Palanisami, Coimbatore V. DCIT, Coimbatore

ITA 2063/CHNY/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6226 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 10-07-2017
• Assessment Year: 2013-2014
• Appeal Filed On: 06-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MDS ASSESSMENT YEARS; TO MDS I T A NOS
• Assessee Lawyers: B RAMAKRISHNAN FCA SHRI ARUN C
• Keywords: Bogus purchase; Unexplained cash credit; Unexplained investment; Unexplained expenditure; Business income; Income from undisclosed sources; Search and seizure; Document seized; Additional evidence; Reasonable cause; Non compliance; Documents seized
• Section: 69C; 40A(3); 142(1); 153A; 69; 132; 144

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI . . . , ! . '#'$ , % !& ' [BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ] ./ I.T.A. NO.1852, 1853 & 1854/MDS/2016 ASSESSMENT YEARS : 2011-12, 2012-13 & 2013-14 ANAND PALANISAMI, NO.20, DOCTORS COLONY, DR. RADHAKRISHNA ROAD, GANDHIPURAM, COIMBATORE 641 012. [ PAN AFJPA 4713N ] VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1, COIMBATORE. I.T.A. NOS. 1855, 1856, 1857, 1858, 1859 & 1860/ MDS/2016 ASSESSMENT YEARS : 2007- 08, 2008-09, 2010-11, 201 1-12, 2012-13 & 2013-14. A. VIJAYALAKSHMI, NO.20, DOCTORS COLONY, DR. RADHAKRISHNA ROAD, GANDHIPURAM, COIMBATORE 641 012. [ PAN AKFPV0020L ] VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1, COIMBATORE I .T.A. NOS.1861, 1862, 1863, 1864, 1865 & 1866/MDS/2 016 ASSESSMENT YEARS : 2007- 08, 2008-09, 2010-11, 201 1-12, 2012-13 & 2013 - 14. P. SAVITHRI (DECEASED REP. BY ANAND PALANISAMI) 16N, NGR STREET, P.N. PALAYAM, COIMBATORE 641 037. [ PAN DGCPS 2107H ] VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1, COIMBATORE ITA NOS. 1852 TO 1866 & 2062 TO 2063/MDS/16 :- 2 -: I.T.A. NOS.2061, 2062 & 2063/MDS/2016 ASSESSMENT YEARS : 2007-08, 2010-11 & 2013-14 . KAMAL PALANISAMI, NO.1086, THIRD STREET, CROSS CUT ROAD, GANDHIPURAM, COIMBATORE 641 012. [ PAN AYRPK 4800B ] VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1, COIMBATORE ( () / APPELLANT) ( *+() /RESPONDENT) / APPELLANT BY : SHRI. B. RAMAKRISHNAN, FCA /RESPONDENT BY : SHRI. ARUN C. BHARATH, CIT. /DATE OF HEARING : 10-07-2017 /DATE OF PRONOUNCEMENT : 30-08-2017 / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER THESE ARE APPEALS FILED BY THE ASSESSEES DIRECTE D AGAINST ORDERS DATED 13.05.2016 OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-18, CHENNAI. 2. FACTS CULMINATING IN THESE APPEALS LIE A SHORT CO MPASS. SHRI. ANAND PALANISAMI IS IN THE BUSINESS OF TOUR ISM, CALL TAXI SERVICES, FINANCE, IMPORTING PAPERS & BOARDS, MANUFACTURING A ND TRADING IN CNC ITA NOS. 1852 TO 1866 & 2062 TO 2063/MDS/16 :- 3 -: MACHINE TOOLS. SMT. VIJAYALAKSHMI IS HIS WIFE, SMT. P. SAVITHRI HIS MOTHER AND SHRI. KAMAL PALANISAMI HIS BROTHER. THE RE WAS A SEARCH U/S. 132 OF THE INCOME TAX ACT, 1961 (IN SHORT TH E ACT) IN THE RESIDENCE AND BUSINESS PREMISES OF SHRI. ANAND PALA NISAMI ON 24.02.2013. SHRI. ANAND PALANISAMI HAD INTERESTS IN THE FOLLOWING CONCERNS. 1 M/S. APC PAPERS & BOARDS (P) LTD 2 M/S. A.P. TOURS & TRAVELS INDIA (P) LTD 3 M/S. TOOL TECH MFG (P) LTD 4 M/S. TOOL TECH ENTERPRISES (P) LTD 5 M/S. TRIP GO TRIP TOURISM (P) LTD 6 M/S. A.P. AVIATION (P)LTD 7 M/S RENNY AGRO AND ENGG. (P) LTD 8 M/S. ANAND PALANISAMY CORP. (P) LTD 9 M/S. A.P. INVESTMENTS (P) LTD 10 M/S. A.P. INFRASTRUCTURE (P) LTD 11 M/S. WHITE ADDS (PROPRIETARY CONCERN OF THE ASSE SSEE ) 12 M/S. ADIRUTH CAPITAL & INVESTMENT. 3. AS PER LD. ASSESSING OFFICER, SHRI. ANAND PALANISAM I HAD DURING THE COURSE OF SEARCH AND IN THE SUBSEQUENT P ROCEEDINGS, DISCLOSED FOLLOWING INCOME:- SL.NO DESCRIPTION ASST. YEAR AMOUNT (IN H) A UNEXPLAINED CREDITS FOUND IN RESERVES AND SURPLUS 2012 - 13 14,01,72,029 B UNEXPLAINED CREDITS BY WAY OF CAPITAL INCREASE IN RENY AGRO ENGINEERING 2013 - 14 1,07,74,285 C UNACCOUNTED INCOME (SALES 2012 - 03 77,44,984 ITA NOS. 1852 TO 1866 & 2062 TO 2063/MDS/16 :- 4 -: SUPPRESSION) OFFERED IN THE PROPRIETARY CONCERN OF WHITE ADS D INFLAT ION OF EXPENDITURE ON ACCOUNT OF BOGUS PURCHASES IN APC PAPERS AND BOARDS INDIA PVT. LTD 2011 - 12 2,22,38,881 E ON MONEY PAID ON ACCOUNT OF THE PURCHASE OF PROPERTY AT 100 FEET ROAD, COIMBATORE 2011 - 12 1,10,00,000 F ON MONEY PAYMENT FOR THE PURCHASE OF BANGALORE PROPERTY. 2011 - 12 1,68,00,000 G UNACCOUNTED INVESTMENTS ON ACCOUNT OF HAND LOANS GIVEN TO VARIOUS PARTIES OUTSIDE THE BOOKS OF ACCOUNTS IN FINANCE BUSINESS. 2011 - 12, 2012-13 & 2013-14 9,28,00,000 TOTAL UNDISCLOSED INCOME 30,15,30,179 LD. ASSESSING OFFICER ALSO NOTED THAT CASH AGGREGAT ING TO H 11,76,103/, GOLD JEWELLERY WEIGHING 1853 GRAMS AND SILVER JEWEL LERY WEIGHING 26.755 KILOGRAMS WERE FOUND AT THE TIME OF SEARCH. AS PER LD. ASSESSING OFFICER TOTAL UNDISCLOSED INCOME AND INVE STMENTS OF SHRI. ANAND PALANISAMI FOR THE IMPUGNED ASSESSMENT YEARS WERE AS UNDER:- DESCRIPTION ASST. YEARS IN RELATES AMOUNT (IN H) UNEXPLAINED CREDITS FOUND IN RESERVES AND SURPLUS 2012 - 13 14,01,72,029 UNEXPLAINED CREDITS BY WAY OF CAPITAL INCREASE IN RENY AGRO ENGINEERING 2013 - 14 1,07,74,285 UNACCOUNTED INCOME (SALES SUPPRESSION) OFFERED IN THE PROPRIETARY CONCERN OF WHITE ADS 2012 - 03 77,44,984 INFLATION OF EXPENDITURE ON ACCOUNT OF BOGUS PURCHASES IN APC PAPERS AND BOARDS INDIA PVT. LTD 2011 - 12 2,22,38, 881 ON MONEY PAID ON ACCOUNT OF THE PURCHASE OF PROPERTY AT 100 FEET ROAD, COIMBATORE 2011 - 12 1,10,00,000 ITA NOS. 1852 TO 1866 & 2062 TO 2063/MDS/16 :- 5 -: ON MONEY PAYMENT FOR THE PURCHASE OF TATABAD PROPERTY 2011 - 12 17,50,000 ON MONEY PAYMENT FOR THE PURCHASE OF BANGALORE PROPERTY. 2011 - 12 1,68,00,00 0 UNACCOUNTED INVESTMENT IN SILVER JEWELLERY 2013 - 14 15,51,790 EXPENSES MADE BY CASH IN VIOLATION OF SECTION 40A(3) 2012 - 13 10,00,000 UNEXPLAINED EXPENDITURE MADE TO MARUTHAMALAI RAJAKOPURAM OUTSIDE THE BOOKS OF ACCOUNT 2012 - 13 39,00,000 UNACCOUNTED IN VESTMENTS ON ACCOUNT OF HAND LOANS GIVEN TO VARIOUS PARTIES OUTSIDE THE BOOKS OF ACCOUNTS IN FINANCE BUSINESS. 2011 - 12, 2012-13 & 2013-14 28,06,36,634 TOTAL UNDISCLOSED INCOME 49,75,68,603 IT SEEMS DURING THE COURSE OF SEARCH CERTAIN AGREEM ENTS WERE ALSO FOUND, INDICATING CERTAIN LAND TRANSACTIONS OF A SSESSEES WIFE SMT. A. VIJAYALAKSHMI, ON WHICH ON-MONEY WAS PAID. THERE W ERE SIMILAR AGREEMENTS FOUND WHEREIN ASSESSEES MOTHER SMT. P. S AVITHRI AND BROTHER SHRI. KAMAL PALANISAMI WERE ALSO INVOLVED. 4. FOR ALL THE ABOVE ASSESSEES, EXCEPT SHRI. ANAND PA LANISAMI LD. ASSESSING OFFICER HAD ISSUED NOTICES U/S. 153C OF THE ACT. HOWEVER FOR ASSESSMENT YEAR 2013-14 NOTICES WERE ISSUED U /S. 142(1) OF THE ACT. IN THE CASE OF SHRI. ANAND PALANISAMI NOTICES WERE ISSUED U/S. 153A OF THE ACT, EXCEPT FOR ASSESSMENT YEAR 2013-14 . HOWEVER, THE ASSESSEES DID NOT FILE ANY RETURNS PURSUANT TO THE NOTICES ISSUED U/S. 153A OR 153C OR 142(1) OF THE ACT. EXCEPT FOR SHRI. ANAND PALANISAMI ITA NOS. 1852 TO 1866 & 2062 TO 2063/MDS/16 :- 6 -: NOBODY RESPONDED FOR THE NOTICES. EVEN SHRI. ANAND PALANISAMI, AFTER FILING A LETTER PLEADING FOR TWO MONTHS TIME FOR FILING THE RETURNS, KEPT MUM. LD. ASSESSING OFFICER DID SENT REMINDERS TO ALL ASSESSEES. IN THE CASE OF SHRI. ANAND PALANISAMI THERE WAS REMIND ER SENT ON 05.08.2014 AND ALSO NOTICE ISSUED U/S. 142(1) OF TH E ACT ON 17.10.2014. LD. ASSESSING OFFICER ON 19.11.2014 IS SUED A FINAL NOTICE PROPOSING A BEST JUDGMENT ASSESSMENT U/S. 144 OF T HE ACT, ALSO GIVING THEREIN THE INCOME HE PROPOSED TO ASSESS FOR THE I MPUGNED ASSESSMENT YEARS. SIMILAR NOTICES WERE ALSO ISSUED TO OTHER ASSESSEES. HOWEVER, THESE NOTICES ALSO WENT UNHEEDED. 5. THEREAFTER ASSESSMENTS WERE COMPLETED U/S. 144 R.W.S.153A/153C OF THE ACT FOR ALL ASSESSMENT YEARS EXCEPT FOR ASSESSMENT YEAR 2013-14. FOR THE LATTER ASSESSMENT YEAR, THE ASSESSMENT WAS COMPLETED U/S. 144 R.W.S. 142(X) OF THE ACT. 6. ADDITIONS MADE IN THE CASE OF SHRI. ANAND PALANISAM I FOR VARIOUS ASSESSMENT YEAR WERE AS UNDER:- ASSESSMENT YEAR 2011-2012:- 1 ON MONEY PAID FOR PURCHASE OF PR OPERTY AT 100 FEET ROAD, GANDHIPURAM U/S. 69B 1,10,00,000 ITA NOS. 1852 TO 1866 & 2062 TO 2063/MDS/16 :- 7 -: 2 ON MONEY PAID FOR PURCHASE OF PROPERTY AT TATABAD PROPERTY U/S. 69B 17,50,000 3 ON MONEY PAID FOR PURCHASE OF BANGALORE PROPERTY U/S. 69B 1,68,00,000 4 INFLATION OF EXPENDITURE ON ACCOUNT OF BOGUS PURCHASE IN APC PAPERS AND BOARDS INDIA PVT.LTD 2,22,38,881 5 UNEXPLAINED EXPENDITURE FOR MARTHAMALAI RAJAGOPURAM U/S. 69C 10,00,000 6 UNACCOUNTED INVESTMENT BY WAY OF HAND LOANS GIVEN TO VARIOUS PARTIES OUTSIDE THE BOOKS OF ACCOUNTS IN FINANCE BUSINESS U/S. 69 1,65,00,000 7 INTEREST RECEIVED ON THE ABOVE LOANS. 29,70,000 ----------------- 7,42,58,881 ----------------- ASSESSED INCOME. 7,75,04,561 ---------------- ASSESSMENT YEAR 2012-13:- UNACCOUNTED SALES SUPPRESSION IN THE PROPRIETARY CONCERN OF WHITE ADS 1,99,61,153 UNEXPLAINED CREDITS FOUND IN RESERVE AND SURPLUS 1 4,01,72,029 UNEXPLAINED PAID IN CASH U/S. 69C 10,00,000 AMOUNT ADVANCED AS HAND LOAN FOR ASST. YEAR 2012- 13 U/S. 69 5,26,00,000 INTEREST RECEIVED ON THE ABOV E LOANS 94,68,000 22,32,01,182 ITA NOS. 1852 TO 1866 & 2062 TO 2063/MDS/16 :- 8 -: ASSESSED INCOME 23,68,07,792/- --------------------- ASSESSMENT YEAR 2013-14:- 1 UNEXPLAINED CREDITS BY WAY OF CAPITAL INCREASE IN M/S. RENI AGRO ENGINEERING PVT LTD U/S. 69 1,07,74,285 2 UNACCOUNTED INVESTMENT BY WAY OF HAND LOANS GIVEN TO VARIOUS PARITES OUTSIDE THE BOOKS OF ACCOUNTS IN FINANCE BUSINESS U/S. 69 21,15,36,634 3 UNEXPLAINED EXPENDITURE FOR MARTHAMALAI RAJAGOPURAM U/S. 69C 39,00,000 4 INTEREST RECEIVED ON THE ABOVE LOANS 3,80,76,595 5 UNACCOUNTED INVESTMENT IN SILVER JEWELLERY U/S. 69 15,51,790 ASSESSED INCOME 27,95,60,912/- THESE ADDITIONS WERE MADE ON THE INCOME RETURNED B Y THE ASSESSEE IN THE RETURNS ORIGINALLY FILED U/S. 139(1) OF THE ACT. 7. IN THE CASE OF SMT. A. VIJAYALAKSHMI THE ADDITIONS MADE FOR ASSESSMENT YEARS 2007-08, 2008-09, 2011-12 AND 2013 -14 WERE ONLY UNDER THE HEAD INCOME FROM OTHER SOURCES. SHE HAD FILED RETURN U/S. 139(1) OF THE ACT ONLY FOR ASSESSMENT YEAR 2009-201 0, WHEREIN H5,20,138/- WAS DECLARED ON INCOME FROM OTHER SOUR CES. BASED ON THIS LD. ASSESSING OFFICER HAD MADE AN ESTIMATE OF INCOME FROM OTHER ITA NOS. 1852 TO 1866 & 2062 TO 2063/MDS/16 :- 9 -: SOURCES FOR ALL THE OTHER YEARS. ADDITIONS MADE FO R ASSESSMENT YEAR 2007-08 WAS H3,32,800/-, FOR ASSESSMENT YEAR 2008-0 9 H4,16,000/-, FOR ASSESSMENT YEAR 2010-11 H6,25,000/-, FOR ASSES SMENT YEAR 2011- 2012 H7,50,000/-, FOR ASSESSMENT YEAR 2012-13 H9,00 ,000/- AND FOR ASSESSMENT YEAR 2013-14 H10,80,000/-. FOR ASSESSME NT YEARS 2010- 2011 APART FROM THE ADDITION MADE UNDER THE HEAD INCOME FROM OTHER SOURCES THERE WAS ONE OTHER ITEM ALSO. TH IS WAS AN ADDITION OF H1,41,99,000/- FOR UNEXPLAINED INVESTMENT IN ACQUIR ING 47.33 CENTS OF LAND AT KALAPATTI VILLAGE. SIMILARLY THERE WAS AN ADDITION FOR UNEXPLAINED INVESTMENT OF H2,07,000/- FOR ACQUIRING 1.03 ACRES OF LAND AT MATHUVARAYAPURAM VILLAGE, FOR ASSESSMENT YE AR 2012-2013. 8. IN THE CASE OF SMT. P. SAVITHRI ALSO, ADDITIONS WER E MADE UNDER THE HEAD INCOME FROM OTHER SOURCES FOR A LL THESE YEARS TAKING CUE OF THE RETURN FILED BY HER FOR ASSESSMENT YEAR 2009-2010, WHEREIN SHE HAD DECLARED INCOME OF H3,79,450/- UNDER THAT H EAD. SUCH ADDITION FOR ASSESSMENT YEAR 2007-08 CAME TO H3,2 5,000/-, FOR ASSESSMENT YEAR 2008-09 H3,50,000/-, FOR ASSESSME NT YEAR 2010-11 H4,00,000/-, FOR ASSESSMENT YEAR 2011-12 H4,25,000/ -, FOR ASSESSMENT YEAR 2012-13 H4,50,000/- AND FOR ASSESSMENT YEAR 20 13-14 IT CAME TO H4,75,000/-. APART FROM THE ABOVE FOR ASSESSMENT YE AR 2011-12 THERE WAS AN ADDITION OF H90,00,000/- FOR AN INVESTMENT IN A LAND AND ITA NOS. 1852 TO 1866 & 2062 TO 2063/MDS/16 :- 10 -: BUILDING AT SF NO.262/RS NO.263/1 TS NO.58 AT SINGA NALLUR, COIMBATORE. THERE WERE A SIMILAR ADDITION OF H22,1 2,000/- FOR INVESTMENTS IN 2217 SQ.FT OF LAND AT SF NO.263/1, T S NO.59 AT SINGANALLUR, COIMBATORE AND H5,50,000/- FOR INVESTM ENT IN 2.75 ACRES OF LAND AT SF NO.431/1 & 432/1A AT MATHUVARAYAPURAM VILLAGE, COIMBATORE FOR ASSESSMENT YEAR 2012-2013. 9. IN THE CASE OF SHRI. KAMAL PALANISAMI FOR ASSESSMEN T YEAR 2007-2008, AN UNDISCLOSED INCOME OF H6,21,030/- WAS ASSESSED. THIS COMPRISED OF ESTIMATED SALARY OF H1,51,950/- AND BU SINESS INCOME OF H4,69,080/-. FOR ASSESSMENT YEAR 2010-2011, AN ADDI TION OF H1,00,00,000/- WAS MADE AGAINST A PAYMENT GIVEN TO SHRI. SUNDAR FOR A POWER OF ATTORNEY FOR PURCHASING 9.62.3 ACRES OF LAND AT SARKAR SAMAKULAM, KONDAYAMPALAYAM VILLAGE, COIMBATORE. FO R THE SAID YEAR ASSESSEE HAD FILED A RETURN U/S. 139(1) OF THE ACT REFLECTING BUSINESS INCOME OF H7,92,708/- AND INCOME FROM OTHER SOURCES H75,066/-. FOR ASSESSMENT YEAR 2013-14 BUSINESS INCOME OF H50,00,1 30/- WAS ESTIMATED AND ADDED. 10. AGGRIEVED BY THE ABOVE ADDITIONS ALL THE ASSESSEES MOVED IN APPEAL BEFORE THE LD. COMMISSIONER OF INCOME TAX ( APPEALS). SHRI. ANAND PALANISAMI AS WELL AS OTHER ASSESSEES CHALL ENGED ALL THE ITA NOS. 1852 TO 1866 & 2062 TO 2063/MDS/16 :- 11 -: ADDITIONS MADE BY THE LD. ASSESSING OFFICER. ASSESS EES ALSO SOUGHT PERMISSION FOR ADMITTING ADDITIONAL EVIDENCE UNDER RULE 46A OF THE INCOME TAX RULES, 1962 (IN SHORT THE RULES). TH E ADDITIONAL EVIDENCE FURNISHED BY SHRI. ANAND PALANISAMI, CONSISTED OF A CCOUNTS IN TALLY INCLUDING PROFIT AND LOSS ACCOUNT, BALANCE SHEET AN D SALE DEEDS FOR PURCHASE OF PROPERTY AND FORM 26AS. CONTENTION BEF ORE LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS THAT THE N OTICES ISSUED BY THE LD. ASSESSING OFFICER WERE FORWARDED TO THE CH ARTERED ACCOUNTANT SHRI. R. SUKUMARAN. ACCORDING TO THE ASSESSEE, HE COMMITTED A MISTAKE IN NOT FOLLOWING UP THE MATTER WITH SHRI. R . SUKUMARAN. AS PER THE ASSESSEES, THEY HAD NOT RECEIVED PROPER PROFES SIONAL ADVICE AND HAD ENTIRELY BELIEVED SHRI. R. SUKUMARAN. FURTHER, SUBMISSION OF THE ASSESSEE WAS THAT HE COULD NOT FILE THE RETURNS OF INCOME PURSUANT TO NOTICES ISSUED BY THE LD. ASSESSING OFFICER, DUE T O INABILITY TO PAY ADMITTED TAXES, ON ACCOUNT OF ATTACHMENT OF ALL THE IMMOVABLE PROPERTY BY THE REVENUE U/S. 281B OF THE ACT. THUS ACCORDING TO ASSESSEES, THEY WERE PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING EVIDENCE BEFORE LD. ASSESSING OFFICER. RELIANCE WA S ALSO PLACED ON CBDT CIRCULAR NO.014(XL-35) DATED 11.04.1955, APAR T FROM JUDGMENT OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF SHAN KAR KHANDASARI SUGAR MILLS VS. CIT 193 ITR 0669 AND THAT OF JUDGME NT OF JURISDICTIONAL HIGH COURT IN THE CASE OF VENTURE METAL PRODUCTS PR IVATE LIMITED VS. ITA NOS. 1852 TO 1866 & 2062 TO 2063/MDS/16 :- 12 -: DCIT 362 ITR 122. SUBMISSIONS MADE BY ALL THE ASSE SSEES BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS), SEEKING A DMISSION OF ADDITIONAL EVIDENCE WERE ON SIMILAR VEIN. LD. COM MISSIONER OF INCOME TAX (APPEALS) HOWEVER REJECTED THE PLEA FOR ADMITTI NG ADDITIONAL EVIDENCE WITH THE FOLLOWING OBSERVATIONS:- 5.3. IN THE INSTANT CASE BEFORE ME THE APPELLANT HAS TAKEN A STAND THAT APPELLANT WAS PREVENTED BY REASONABLE CAUSE FROM APPEARING BEFORE THE ASSESSING OFFICER (HENCEFORTH REFERRED TO AS THE 'A O') AND FILING THE RETURN OF INCOME AND THE EVIDENCE. VARIOUS COURTS HAVE HELD THAT CIT(A) HAS POWER CO- TERMINUS WITH THE AO. DRAWING STRENGTH FROM THAT, I ALSO MADE DETAILED INVESTIGATION TO FIND OUT WHAT HAD HAPPENED IN THIS CASE WHETHER ANY REASONABLE CAUSE EXISTED WHICH PREVENTED THIS APPELLANT FROM FILING EVIDENCE BEFORE THE ASSESSING AUTHORITY. DETAILS OF INVESTIGATION ARE LISTED AS U NDER: THIS APPELLANT IS A NAME LENDER / BENAMI OF A PERSO N WHO IS A RELATIVE OF A POWER CENTRE. THIS KINGPIN O F WESTERN REGION OF TAMIL NADU CONTROLS GOVERNMENT OFFICIALS WORKING IN WESTERN REGION. HE HAS SHADOW CONTROL IN THE DAY TO DAY FUNCTIONING OF THE GOVERNMENT DEPARTMENTS. EVEN THE MINISTERS OF THIS REGION HAVE TO PAY VISIT TO HIM TO RETAIN THE MINISTERSHIP. HE CARRIES THE NAME OF' 10 HEADED DEMON KING OF LANKA', THESE APPELLANTS ARE THE BENAMIES OF THAT PERSON. IN THIS WESTERN REGION NO GOVERNMENT OFFICIALS, LAW ENFORCING AUTHORITIES INCLUDING SALES TAX, POLICE, RTO, ETC., CAN ENFORCE THEIR LAW WITH THIS GROUP. SEARCH AND SEIZURE U/S 132 OF THE I.T. ACT CONDUCTE D BY THE INVESTIGATION WING OF THE DEPARTMENT IN COIMBATORE CAME AS A RUDE SHOCK TO THESE PEOPLE. THEY REALIZED THAT THE INCOME TAX DEPARTMENT IS NOT UNDER THE CONTROL OF THE STATE GOVERNMENT AND INCOME TAX OFFICIALS NEED NOT SUBMIT TO THESE PEOPLE'S CONTROL AS THEY ARE NOT IN STATE GOVERNMENT. EVEN THEN, THIS GROUP EXPECTED THAT ITA NOS. 1852 TO 1866 & 2062 TO 2063/MDS/16 :- 13 -: INCOME TAX DEPARTMENT WILL REALIZE THEIR FOLLY AND RELEASE ALL THE SEIZED MATERIAL WITHOUT ANY ENQUIRY AND ASSESSMENT PROCEEDINGS AND ALLOW THEM TO GO SCAT-FREE. UNFORTUNATELY, INCOME TAX DEPARTMENT AND INCOME TAX LAW DO NOT PERMIT SUCH ACTION. THE APPELLANT IS SIMPLY BLAMING THE CA WHO WAS HANDLING THE CASE BEFORE I AFTER SEARCH, THAT HE IS NOT PROPERLY REPRESENTING THEIR CASE. BUT INVESTIGATION REVEALS THAT THERE IS NO IOTA OF TRUTH IN THE ALLEG ATION OF THE APPELLANT. THE CA, WHO WAS IN THE HELM OF AFFAIRS BEFORE AND AFTER SEARCH, IS POPULAR, SINCERE AND IS KNOWN FOR HIS KNOWLEDGE AND WISDOM. HE IS KNOWN FOR GIVING GENUINE ADVICE IN TAX MATTERS AND HE HANDLES GOOD NUMBER OF CLIENTELE BASE. IN THE INSTANT CASE THE C A ADVISED THESE APPELLANTS TO PAY THE TAX TO INCOME T AX DEPARTMENT AS PER THE OFFER MADE AT THE TIME OF SEA RCH AND FILE RETURN OF INCOME IN RESPONSE TO NOTICES U/ S 153A AND 153C. HE ALSO WARNED THEM TO FACE CONSEQUENCES OF NONPAYMENT OF TAXES. BUT NOTHING COULD CHANGE THE APPELLANT'S ATTITUDE. THE ATTITUDE REMAINED 'HOW CAN A GOVERNMENT OFFICIAL ASK ME TO PAY TAXES' AS HE ASSUMED HIMSELF AS THE RULER OF TH IS REGION, THIS GROUP OF PERSONS WAS CALLED TO INCOME TAX OFFICE AND THE AO EXPLAINED THE CONSEQUENCES OF NON-COOPERATION AND NON COMPLIANCE TO THE NOTICES THAT WAS SENT NUMBER OF TIMES. BUT THE APPELLANT'S ATTITUDE REMAINED 'DO WHAT YOU CAN'. DESPITE NUMBER OF NOTICES, SHOW CAUSE NOTICES ISSUED, THE APPELLAN T DID NOT BOTHER TO RESPOND AND REPRESENTHIS CASE BEFORE THE AD WHICH RESULTED IN EX PARTE ASSESSMENT . THE APPELLANT GROUP TRIED TO CREATE A PICTURE AS IF THE CA DOES NOT KNOW THE I.T. ACT AND THE CONSEQUENCES OF NOT RESPONDING TO THE STATUTORY NOTICES. THE APPELLANT CANNOT EXPECT THE CA TO PAY THEIR TAX LIA BILITY AND FILE THEIR RETURN OF INCOME. EVEN AFTER SHOW CAUSE NOTICES FOR FILING PROSECUTIO N COMPLAINT WERE SENT, THE APPELLANT DID NOT RESPOND WHICH SHOWS THAT THE APPELLANT HAD HARASSED THE DEPARTMENT AND THE AO. THE AO WAS LEFT WITH NO OTHE R ITA NOS. 1852 TO 1866 & 2062 TO 2063/MDS/16 :- 14 -: OPTION EXCEPT TO PROCEED TO MAKE ASSESSMENT BASED ON SEIZED MATERIALS AS THE APPELLANT IS NOT INTERES TED TO DEFEND HIS CASE. AFTER ANALYZING THE INVESTIGATION FINDINGS AND APPELLANT'S SUBMISSIONS BEFORE ME AT THE APPELLATE STAGE, I DO NOT FIND ANY REASONABLE CAUSE WHICH PREVENTED THE APPELLANT FROM FILING EVIDENCE BEFORE THE AO. NO TRACE OF REASONABLE CAUSE WAS FOUND OR SEEN AT THE SAME TIME PLENTY OF ARROGANCE AGAINST COMPLIANCE OF THE LAW OF THE LAND, IS EVIDENT. 5.4. HENCE, I DO NOT FIND ANY REASON TO ACCEPT THE FRESH EVIDENCE AT THIS STAGE. ACCORDINGLY, THE APPELLANT'S REQUEST FOR ADMISSION OF FRESH EVIDENCE CANNOT BE ENTERTAINED. IF THE EVIDENCE IS ACCEPTED, IT WOULD BE AN INSULT TO THE LAW ABIDING CITIZEN WHO COMPLIES WITH THE LAW OF THE LAND. 5.5 FROM THE ABOVE, IT CAN BE SEEN CLEARLY THAT THE RE WAS NO REASONABLE CAUSE WHICH MADE THE APPELLANT NOT TO APPEAR BEFORE THE ASSESSING OFFICER OR MAKE ANY COMPLIANCE FOR ANY OF THE NOTICES. IN THE CIRCUMSTANCES, THE APPELLANTS REQUEST FOR ADMISSIO N OF ADDITIONAL EVIDENCE UNDER RULE 46A IS HEREBY REJECTED. LD. COMMISSIONER OF INCOME TAX (APPEALS) ALSO PLACE D RELIANCE ON THE JUDGMENT OF HONBLE ALLAHABAD HIGH COURT IN THE CAS E OF HAJI LAL MOHD BIRI WORKS VS. CIT 275 ITR 496, THAT OF HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT VS. BANK OF PUNJAB LTD 286 ITR 630 , THAT OF HONBLE GUAHATI HIGH COURT IN THE CASE OF CIT VS RANJIT KUMAR CHOUDHURY, 288 ITR 179 , THAT OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF BIMAL KUMAR ANANT KUMAR VS. CIT 288 ITR 278 AND THAT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF N .B. SURTI FAMILY TRUST VS. ITA NOS. 1852 TO 1866 & 2062 TO 2063/MDS/16 :- 15 -: CIT 288 ITR 523 . HE CONFIRMED ALL THE ADDITIONS MADE BY THE LD. ASSESSING OFFICER. 11. AGGRIEVED, ASSESSEES ARE IN APPEAL BEFORE US. LD. A UTHORISED REPRESENTATIVE STRONGLY ASSAILING THE ORDERS OF THE LOWER AUTHORITIES SUBMITTED THAT THE ASSESSMENTS WERE COMPLETED EX-P ARTE. ACCORDING TO HIM, SHRI. ANAND PALANISAMI WHO WAS THE SEARCHED ASSESSEE, HAD ADMITTED H16 CRORES DURING THE COURSE OF SEARCH BUT FINAL ADDITIONS AGGREGATED MORE THAN 58 CRORES. CONTENTION OF THE LD. AUTHORISED REPRESENTATIVE WAS THAT THERE WERE A NUMBER DOUBLE ADDITIONS. AS PER LD. AUTHORISED REPRESENTATIVE EVEN A TELESCOPY WAS NOT CONSIDERED BY THE LOWER AUTHORITIES. FURTHER CONTENTION OF THE L D. AUTHORISED REPRESENTATIVE WAS THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) HAD SUMMARILY REJECTED THE ADDITIONAL EVIDENCE FILE D, CITING A REASON THAT ASSESSEES HAD NOT AVAILED OPPORTUNITIES GRANTE D BY THE LD. ASSESSING OFFICER. AS PER LD. AUTHORISED REPRESENT ATIVE, LD. COMMISSIONER OF INCOME TAX (APPEALS) WENT BY CERTAI N PRESUMPTION AND SURMISES WITHOUT CONSIDERING MERITS OF THE ADDI TIONAL EVIDENCE FILED BY THE ASSESSEES. ACCORDING TO HIM, ADDITION AL EVIDENCE IF NOT CONSIDERED WOULD RESULT IN MISCARRIAGE OF JUSTICE A ND RESULT IN COMPUTATION OF AN IRRATIONALLY HIGH INCOME. ITA NOS. 1852 TO 1866 & 2062 TO 2063/MDS/16 :- 16 -: 12. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE SUBMIT TED THAT ASSESSEES COULD NOT CLAIM BENEFIT OF RULE 46A OF TH E RULES. ACCORDING TO HIM, LD. ASSESSING OFFICER HAD NOT REFUSED ADMIS SION OF ANY EVIDENCE BROUGHT IN BY THE ASSESSEES. ASSESSEES AS PER LD. DEPARTMENTAL REPRESENTATIVE NEVER ENTERED APPEARAN CE NOR FILED THEIR RETURNS DESPITE REPEATED NOTICES ISSUED BY THE LD. ASSESSING OFFICER. CONTENTION OF THE LD. DEPARTMENTAL REPRESENTATIVE WAS THAT ASSESSEES COULD NOT SHOW ANY CAUSE WHICH PRECLUDED IT FROM PR ODUCING EVIDENCE BEFORE LD. ASSESSING OFFICER. FURTHER, AS PER THE LD. DEPARTMENTAL REPRESENTATIVE ASSESSEES HAD ADMITTED UNDISCLOSED INCOME DURING THE COURSE OF SEARCH AND SUBSEQUENT PROCEEDINGS BUT NEVER FILED RETURNS OF INCOME. LD. DEPARTMENTAL REPRESENTATIVE ALSO POINTED OUT THAT DEPARTMENT HAD FILED PROSECUTION PROCEEDINGS A GAINST THE ASSESSEES U/S. 276CCC OF THE ACT FOR WILLFUL DEFAU LT IN FILING RETURNS. ACCORDING TO HIM, DELIBERATE ACT OF NEGLIGENCE ON THE PART OF THE ASSESSEES COULD NOT BE CONDONED UNDER RULE 46A AN D NO LENIENT TREATMENT COULD BE GIVEN TO THEM. 13. AD LIBITUM REPLY OF THE LD. AUTHORISED REPRESENTAT IVE WAS THAT ASSESSEES MIGHT HAVE BLUNDERED IN NOT FILING THEIR RETURNS. HOWEVER, ACCORDING TO HIM, DEPARTMENT WAS DUTY BOU ND TO ASSESS THE REAL INCOME AND ASSESSMENT PROCEEDINGS COULD NOT BE CONVERTED TO A ITA NOS. 1852 TO 1866 & 2062 TO 2063/MDS/16 :- 17 -: PENAL PROCEEDINGS FOR NON COMPLIANCE WITH NOTICES . ACCORDING TO HIM, LD. COMMISSIONER OF INCOME TAX (APPEALS) NEVER CONSIDERED THE MERITS OF THE CASE AND WENT BY A LINE THAT ASSESSEE S SHOULD BE TAUGHT A LESSON. AS PER LD. AUTHORISED REPRESENTATIVE ASS ESSEES WERE PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING EVIDEN CE BEFORE THE LD. ASSESSING OFFICER AND THEREFORE ADDITIONAL EVIDENCE OUGHT TO HAVE ADMITTED. 14. WE HAVE CONSIDERED THE RIVAL CONTE NTIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. WHAT W E FIND FROM THE ASSESSMENT ORDER OF SHRI. ANAND PALANISAMI FOR THE IMPUGNED ASSESSMENT YEAR IS THAT THERE WERE ADDITIONS FOR DI FFERENCE IN TURNOVER, DIFFERENCE IN RESERVE AND SURPLUS, UNEXPLAINED LOA NS AND ADVANCES, INCREASE IN CAPITAL, DONATION TO MARUTHAMALAI TEMPL E, INTEREST ON LOANS AND ON-MONEY PAID FOR ACQUISITION OF PROPERTIES. IN THE CASE OF SMT. A. VIJAYALAKSHMI, ADDITIONS MADE WERE ALL BASED ON INC OME OF H5,20,138 FROM OTHER SOURCES RETURNED BY HER FOR ASSESSMENT Y EAR 2009-2010, APART FROM ADDITIONS MADE IN ASSESSMENT YEARS 201 0-2011 AND 2012- 2013 FOR UNEXPLAINED INVESTMENTS IN PROPERTIES. SI MILAR IS THE CASE OF SMT. P. SAVITHRI ALSO. IN THE CASE OF SHRI. KAMAL PALANISAMI THE ADDITIONS WERE FOR ESTIMATED SALARY AND ESTIMATED BUSINESS INCOME ITA NOS. 1852 TO 1866 & 2062 TO 2063/MDS/16 :- 18 -: APART FROM AN ADDITION FOR UNEXPLAINED INVESTMENT I N A LAND. 15. A READING OF THE ASSESSMENT ORDER OF SHRI. ANAND PALANISAMI SHOW THAT ONE OF THE ADDITION WAS FOR I NCREASE IN CAPITAL IN A COMPANY CALLED M/S. RENY AGRO ENGINEERING PVT LTD IN WHICH HE IS A DIRECTOR. SIMILARLY, THERE WAS AN ADDITION MADE I N ASSESSMENT YEAR 2011-12 FOR DIFFERENCE IN RESERVE AND SURPLUS IN T HE BALANCE SHEET FOUND DURING THE SEARCH. ASSESSEE WAS UNABLE TO SH OW WHY THESE DIFFERENCE WOULD NOT RESULT IN UNDISCLOSED INCOME. THE ADDITIONS RELATING TO TRANSACTIONS IN IMMOVABLE PROPERTY WERE SUBSTANTIALLY BASED ON AGREEMENTS. CONFIRMATION OF THE SELLERS/P URCHASERS WERE ALSO AVAILABLE. LOANS CONSIDERED FOR ADDITIONS INC LUDED THOSE LOANS WHICH THE ASSESSEE SHRI. ANAND PALANISAMI, MENTION ED IN HIS STATEMENT AS MERE PROPOSAL FOR LENDING. HOWEVER, S HRI. ANAND PALANISAMI IN THE STATEMENT RECORDED ON 24.01.20 13 HAD CONFIRMED LENDING OF MONEY TO VARIOUS PERSONS, THOUGH HE MENT IONED THAT THE SEIZED DOCUMENTS ALSO INCLUDED PROPOSAL TO LEND. 16. IN THE CASE OF SMT. A. VIJAYALAKSHMI, HER INCOME FR OM OTHER SOURCES WERE ESTIMATED BASED ON INCOME RETURNED BY HER UNDER THE SAID HEAD, IN HER RETURN FILED FOR ASSESSMENT YEAR 2009-2010, SINCE ITA NOS. 1852 TO 1866 & 2062 TO 2063/MDS/16 :- 19 -: NO OTHER MATERIALS WAS PLACED ON RECORD BY THE ASSE SSEE FOR SUCH INCOME FOR THE IMPUGNED ASSESSMENT YEARS. THE ADD ITIONS MADE FOR ALLEGED ON-MONEY TRANSACTIONS, WERE AGAIN SUBSTANT IALLY BASED ON CONFIRMATIONS OBTAINED FROM THE CONCERNED PARTIES. SIMILAR WAS THE ADDITIONS MADE IN THE CASE OF SMT. P. SAVITHRI ALS O. 17. COMING TO THE CASE OF SHRI. KAMAL PALANISAMI AN ADD ITION WAS MADE FOR ALLEGED UNDISCLOSED INVESTMENTS FOR A LAND AT SARKAR SAMAKULAM, KONDAYAMPALAYAM VILLAGE, COIMBATORE. LD. ASSESSING OFFICER HAD WENT BY A POWER OF ATTORNEY AND STATEM ENT OF ONE SHRI. S. SUNDAR, AND ASSESSEE COULD NOT REBUT THE STATEMENT OF SHRI. S. SUNDAR WITH EVIDENCE. 18. NO DOUBT IT MIGHT BE TRUE THAT FOR NUMBER OF ADDIT IONS COULD HAVE BEEN DUPLICATED. HOWEVER, LD. ASSESSING OFFIC ER HAD GIVEN A NUMBER OF OPPORTUNITY TO THE ASSESSEES TO FILE THEI R RETURNS AND FOR ENTERING APPEARANCE, BUT THE ASSESSEES HAD FAILED T O RESPOND. BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ASSESS EE HAD CLEARLY MENTIONED THAT THEY WERE DEPENDENT ON ONE CHARTER ED ACCOUNTANT SHRI. R. SUKUMARAN, WHO FAILED TO GIVE PROPER ADV ISE. NO EVIDENCE ON THIS PLEADING WAS PLACED ON RECORD. WHAT WAS FI LED BY THE ASSESSEE BEFORE LD. COMMISSIONER OF INCOME TAX (APPEALS) INC LUDED CASH FLOW ITA NOS. 1852 TO 1866 & 2062 TO 2063/MDS/16 :- 20 -: STATEMENT, BANK STATEMENT, SALE DEED, PROFIT AND LO SS ACCOUNT AND BALANCE SHEET. LD. COMMISSIONER OF INCOME TAX (APP EALS) HAD REJECTED THE APPLICATION FOR ADMISSION OF ADDITIONA L EVIDENCE TAKING A VIEW THAT THE CHARTERED ACCOUNTANT CONCERNED WAS PO PULAR, SINCERE AND KNOWN FOR HIS KNOWLEDGE AND WISDOM. THE LD. CO MMISSIONER OF INCOME TAX (APPEALS) CONSIDERED THAT ASSESSEE SHR I. ANAND PALANISAMI TO BE A RELATIVE OF POWER CENTRE WHO WAS THE KINGPIN OF WESTERN REGION OF TAMIL NADU. AS PER LD. COMMISSIO NER OF INCOME TAX (APPEALS) ASSESSEES WERE ALL BENAMIS OF A POLITICA L POWER CENTRE WHO WAS CONTROLLING THE DAY TO DAY FUNCTIONING OF THE G OVERNMENT DEPARTMENTS. IN OUR OPINION, THOUGH THE FINDINGS GIVEN BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WERE NOT MERE ASSUMPTIONS, JUSTICE REQUIRED CONSIDERATION OF THE ADDITIONAL EV IDENCE. 19. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CA SE, AND TO MEET THE ENDS OF JUSTICE, WE ARE OF THE OPINION TH AT THE ADDITIONAL EVIDENCE BROUGHT IN BY THE ASSESSEES HAVE TO BE LOO KED INTO BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AS TO ITS AUTHENTICITY, APPROPRIATENESS AND WHY ASSESSEES COULD NOT PRODUC E IT BEFORE LD. ASSESSING OFFICER. LD. COMMISSIONER OF INCOME TAX ( APPEALS) AFTER LOOKING INTO ALL ASPECTS RELATING TO ADDITIONAL EVI DENCE IS FREE TO ACCEPT OR REJECT THEM. WE THEREFORE SET ASIDE THE ORDER OF THE LD. ITA NOS. 1852 TO 1866 & 2062 TO 2063/MDS/16 :- 21 -: COMMISSIONER OF INCOME TAX (APPEALS) AND REMIT THE CASES BACK TO HIM FOR CONSIDERING ADMISSION OF EACH OF THE ADDITI ONAL EVIDENCE PRODUCED BY THE ASSESSEE IN ACCORDANCE WITH LAW. A SSESSEES ARE DIRECTED TO CO-OPERATE WITH THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND FURNISH ALL INFORMATION CALLED FOR B Y HIM IN TIMELY MANNER, FAILING WHICH LD. COMMISSIONER OF INCOME TA X (APPEALS) WILL BE FREE TO TAKE AN ADVERSE VIEW. 20. IN THE RESULT, THE APPEALS OF THE ASSESSEES FOR TH E IMPUGNED ASSESSMENT YEARS ARE ALLOWED FOR STATISTICAL PURPOS E. ORDER PRONOUNCED ON WEDNESDAY, THE 30 TH DAY OF AUGUST, 2017, AT CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) / JUDICIAL MEMBER ( ! . '#'$ ) (ABRAHAM P. GEORGE) % / ACCOUNTANT MEMBER ! / CHENNAI '# / DATED: 30TH AUGUST, 2017. KV #$%&'(' / COPY TO: 1 . / APPELLANT 3. )* / CIT(A) 5. '+ ,%%-. / DR 2. / RESPONDENT 4. ) / CIT 6. , /01 / GF