Jaya Ramamurthy, Hosur V. DCIT, Coimbatore

ITA 2335/CHNY/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73777 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 20-02-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 31-12-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: T BANUSEKAR
• Keywords: Document seized; Additional evidence; Deemed dividend; Documents seized
• Section: 234B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHE NNAI . . . , ! , ' # $ BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER I.T.A.NO. 2322/MDS/2013 ASSESSMENT YEAR : 2007-08 SHRI R. SARATH, 4 TH FLOOR, JR PLAZA, TANK STREET, HOSUR, KRISHNAGIRI [PAN: BFXPS 1501 K] VS DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-I, COIMBATORE I.T.A.NOS. 2325, 2326 & 2327/MDS/2013 ASSESSMENT YEARS : 2005-06, 2006-07 & 2007-08 SHRI R. SUBASH CHANDRU, 104-106, VENKATESWARA LAY OUT, OPP. DSP BUNGLOW, HOSUR-635 109 [PAN: AFMPC 8542 C] VS DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-I, COIMBATORE I.T.A.NOS. 2328, 2329, 2330, 2331, 2332, 2333 & 233 4/MDS/2013 ASSESSMENT YEARS : 2003-04, 2004-05, 2005-06, 2006- 07, 2007-08, 2008-09 & 2009-10 SHRI M. RAMAMURTHY, 104-106, VENKATESWARA LAY OUT, OPP. DSP BUNGLOW, HOSUR [PAN: ABLPR 1583 P] VS DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-I, COIMBATORE I.T.A.NOS. 2335, 2336, 2337, 2338, 2339, 2340 & 234 1/MDS/2013 ASSESSMENT YEARS : 2003-04, 2004-05, 2005-06, 2006- 07, 2007-08, 2008-09 & 2009-10 SMT. JAYA RAMAMURTHY, 104-106, VENKATESWARA LAY OUT, OPP. DSP BUNGLOW, HOSUR-635 109 [PAN: ABLPR 1585 M] ( !% /APPELLANT) VS DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-I, COIMBATORE ( &'!% /RESPONDENT) I.T.A. NOS. 2322, 2325 TO 2327, 2328 TO 2334 & 2335 TO 2341/MDS/2013 2 / APPELLANT BY : SHRI T.BANUSEKAR, CA., / RESPONDENT BY : SHRI SHAJI P. JACOB, ADDL. CIT / DATE OF HEARING : 20-02-2014 /DATE OF PRONOUNCEMENT : 25-03-2014 #( / O R D E R PER VIKAS AWASTHY, J.M: ITA NOS. 2328, 2329, 2330, 2331, 2332, 2333 & 2334/ MDS/2013 AYS. 2003-04, 2004-05, 2005-06, 2006-07, 2007-08, 2 008-09 & 2009-10 : THE APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAINS T THE ORDER OF COMMISSIONER OF INCOME TAX(APPEALS)-II, CO IMBATORE IN RESPECT OF SEVEN ASSESSMENT YEARS (AYS) I.E., 2003- 04, 2004-05, 2005-06, 2006-07, 2007-08, 2008-09 & 2009-10. SINC E COMMON ISSUES ARE INVOLVED IN ALL THE SEVEN APPEALS, THE A PPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION. 2. THE ASSESSEE IS A PROMOTER AND DIRECTOR OF JR GR OUP OF INDUSTRIES, HOSUR. THE GROUP IS IN THE BUSINESS OF MANUFACTURING OF KRAFT PAPER AND CORRUGATED BOXES. THE ASSESSEE WAS SUBJECT TO SEARCH U/S.132 OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT) ON 13-03-2009. CONSEQUENT TO THE SEARCH, PROCEEDINGS U/S.153A WERE INITIATED AGAINST THE ASS ESSEE. THE I.T.A. NOS. 2322, 2325 TO 2327, 2328 TO 2334 & 2335 TO 2341/MDS/2013 3 ASSESSMENTS WERE COMPLETED AGAINST THE ASSESSEE FOR ALL THE AFOREMENTIONED SEVEN AYS U/S.153A R.W.S.143(3) OF T HE ACT. THE ASSESSING OFFICER MADE ADDITIONS IN THE RETURNS FIL ED BY THE ASSESSEE FOR DIFFERENT AYS ON FOLLOWING COUNTS: I. UN-EXPLAINED OPENING BALANCE; II. UN-PROVED CREDITORS; III. UN-ACCOUNTED INVESTMENT IN PROPERTIES; IV. DEEMED DIVIDEND; AND V. UN-EXPLAINED EXPENDITURE ON THE MARRIAGE OF ASSESSEES SON; THE CONCISE ISSUES IN THE APPEALS FOR THE ABOVE SAI D SEVEN AYS ARE AS UNDER: AY. 2003 - 04 2004 - 05 2005 - 06 2006 - 07 2007 - 08 2008 - 09 2009 - 10 ITA NO. 2328/13 2329/13 2330/13 2331/13 2332/13 2 333/13 2334/13 ADDITIONS MADE BY ASSESSING OFFICER OPENING BALANCE 62,13,000 - - - - - - UN-PROVED CREDITORS U/S.68 12,00,000 12,00,000 12,00,000 49,23,200 85,00,000 10,00,000 - UN-ACCOUNTED INVESTMENT IN PROPERTIES U/S.69C - - - 1,30,000 1,01,13,740 15,76,510 - DEEMED DIVIDEND SEC.2(22)(E) - - - 2,50,000 - 61,25,824 43,83,808 MARRIAGE EXPENSES U/S.69C - - - - - - 2,30,000 I.T.A. NOS. 2322, 2325 TO 2327, 2328 TO 2334 & 2335 TO 2341/MDS/2013 4 AGGRIEVED AGAINST THE ASSESSMENT ORDERS, THE ASSES SEE PREFERRED APPEALS FOR THE RESPECTIVE AYS BEFORE THE CIT(APPEALS). THE CIT(APPEALS) DISMISSED THE APPEALS OF THE ASSES SEE AND SUSTAINED THE ADDITIONS MADE BY THE ASSESSING OFFIC ER. NOW, THE ASSESSEE HAS COME IN SECOND APPEAL BEFORE THE TRIBU NAL. 3. SHRI T.BANUSEKAR, APPEARING ON BEHALF OF THE ASS ESSEE SUBMITTED THAT IN THE AY.2003-04, THE ASSESSING OFF ICER MADE ADDITION ON ACCOUNT OF UN-EXPLAINED OPENING BALANCE . THE SAME HAS BEEN SUSTAINED BY THE CIT(APPEALS). THE REASON FOR HUGE OPENING BALANCE IN THE AY.2003-04 IS, THAT THE MOTH ER OF THE ASSESSEE SMT.AKKAILAMMA HAD ASSIGNED RECOVERABLES T O THE TUNE OF ` 76,52,500/- TO THE ASSESSEE BY WAY OF DEED OF PARTI TION DATED 05-02-2002. THE OPENING BALANCE IS THE RESULT OF T HE AMOUNTS RECOVERED BY THE ASSESSEE BY VIRTUE OF FAMILY PARTI TION DEED. 3(A). ON THE SECOND ISSUE OF UN-PROVED CREDITORS, T HE LD.AR SUBMITTED THAT THE ADDITIONS HAVE BEEN MADE U/S.68 IN THE AY.2003-04 TO 2008-09. THE UN-PROVED CREDITORS ARE THE LOAN CREDITORS. NO DETAILS COULD BE FURNISHED BEFORE TH E ASSESSING OFFICER AS THE SAME WERE NOT AVAILABLE AT THAT TIME . THE CREDITORS HAVE NOW GIVEN CONFIRMATION LETTERS IN SUPPORT OF T HE ASSESSEE. I.T.A. NOS. 2322, 2325 TO 2327, 2328 TO 2334 & 2335 TO 2341/MDS/2013 5 THE LD.AR PRAYED FOR PLACING ON RECORD CONFIRMATION LETTERS FILED BY THE ALLEGED CREDITORS BY WAY OF ADDITIONAL EVIDENCE . 3(B). THE NEXT ISSUE IN AYS.2006-07, 2007-08 & 2008 -09 IS WITH REGARD TO ADDITION MADE IN ON ACCOUNT OF UN-ACCOUNT ED INVESTMENT IN PROPERTIES. THE LD.AR SUBMITTED THAT THE ADDITI ONS HAVE BEEN MADE DUE TO DIFFERENCE BETWEEN THE AMOUNT RETURNED AND THE VALUE OF TRANSACTION ON THE REGISTERED DOCUMENTS. THE ASSESSING OFFICER HAS PRESUMED THAT THE ASSESSEE HAS PAID ON MONEY, WHEREAS, THERE IS NO EVIDENCE THAT ON MONEY WAS E VER PAID BY THE ASSESSEE IN ANY OF THE TRANSACTIONS. THE ASSES SING OFFICER HAS MADE ADDITION ON THE BASIS OF A PAPERS SEIZED D URING THE COURSE OF SEARCH. ON THE PAPER SHEET SEIZED, VALUE OF ALL TRANSACTIONS WITH RESPECT TO INVESTMENTS IN PROPERT IES WERE ROUNDED OFF. THE TABULATED SHEET WAS PREPARED FOR SUBMITTING THE DETAILS OF PROPERTIES TO THE BANK FOR THE PURPOSE O F COLLATERAL SECURITY. THE STAMP DUTY PAID BY THE ASSESSEE ON T HE TRANSACTIONS HAS NOT BEEN TAKEN INTO CONSIDERATION BY THE ASSESS ING OFFICER BEFORE MAKING SUCH ADDITION. 3(C). THE NEXT GROUND FOR MAKING ADDITION IN THE AY S.2006-07, 2008-09 AND 2009-10 IS DEEMED DIVIDEND U/S.2(22)(E) . THE LD.AR I.T.A. NOS. 2322, 2325 TO 2327, 2328 TO 2334 & 2335 TO 2341/MDS/2013 6 SUBMITTED THAT THE ALLEGED DEEMED DIVIDEND IS IN FA CT ANNUAL SALARY PAID BY THE COMPANY TO THE ASSESSEE. INSTEAD OF MA KING MONTHLY ENTRIES DEBITING SALARY OF THE ASSESSEE, SINGLE ENT RY WAS MADE AT THE END OF YEAR. THE ASSESSING OFFICER HAS ERRED I N TAKING THE PEAK DEBIT AND HAS MADE ADDITION IN THE AFORESAID A YS AS DEEMED DIVIDEND. THE ASSESSING OFFICER AND THE CIT(APPEAL S) HAS SIMPLY BRUSHED ASIDE THE SUBMISSIONS OF THE ASSESSEE WITHO UT ACTUALLY VERIFYING THE TRANSACTIONS. 3(D). IN THE AY.2009-10, AN ADDITION OF ` 2,30,000/- HAS BEEN MADE U/S.69C ON ACCOUNT OF UN-EXPLAINED EXPENSES ON THE MARRIAGE OF THE SON OF THE ASSESSEE. THE LD.AR SUBMITTED THAT THE ASSESSEE HAS SPENT ONLY ` 7.00 LAKHS ON THE MARRIAGE OF HIS SON. THE ASSESSING OFFICER HAS ERRED IN COMING TO THE CONCLU SION THAT ASSESSEE HAS SPENT ` 28,50,000/- ON THE MARRIAGE. THE LD.AR SUBMITTED THAT THE ASSESSING OFFICER HAS ERRED IN D ETERMINING THE MARRIAGE EXPENSES OF THE SON OF THE ASSESSEE ON THE BASIS OF ESTIMATES MADE BY THE ASSESSEE IN DIARY SEIZED DURI NG SEARCH OPERATIONS. ACTUAL EXPENDITURE WAS FAR LESS THAN T HE ESTIMATIONS MADE BY THE ASSESSEE. I.T.A. NOS. 2322, 2325 TO 2327, 2328 TO 2334 & 2335 TO 2341/MDS/2013 7 3(E). THE LD.AR FURTHER SUBMITTED THAT INTEREST U/S .234A, 234B AND 234C HAS NOT BEEN LEVIED BY THE ASSESSING OFFICER A S PER LAW. THE AR PLACED RELIANCE ON THE DECISION OF THE TRIBU NAL IN THE CASE OF ACIT VS. V.N.DEVADOSS REPORTED AS 93 DTR (CHENNAI)(TRIB) 73 TO SUPPORT HIS CONTENTIONS. 4. ON THE OTHER HAND, SHRI SHAJI P. JACOB, APPEARIN G ON BEHALF OF THE REVENUE SUBMITTED THAT THE ALLEGED DEED OF P ARTITION WAS NEVER PLACED ON RECORD BEFORE THE AUTHORITIES BELOW . NO REASON WHAT-SO-EVER HAS BEEN GIVEN BY THE ASSESSEE FOR NOT BRINGING ON RECORD THE ALLEGED DEED OF PARTITION ON THE BASIS O F WHICH THE ASSESSEE IS NOW TRYING TO EXPLAIN THE HUGE AMOUNT O F ` 62.13 LAKHS AS OPENING BALANCE IN THE AY.2003-04. THE LD .DR FURTHER SUBMITTED THAT THE ALLEGED DEED OF PARTITION ON WHI CH THE ASSESSEE IS RELYING IS AN UN-REGISTERED DOCUMENT, THEREFORE NO RELIANCE CAN BE PLACED ON IT. NO DETAILS OF THE PERSONS FROM WH OM THE AMOUNTS ARE RECOVERABLE OR RECOVERED IS EITHER MENTIONED IN THE DEED OF PARTITION OR DISCLOSED BY THE ASSESSEE DURING THE A SSESSMENT PROCEEDINGS OR THEREAFTER. THE LD.DR VEHEMENTLY OP POSED THE PRAYER OF THE ASSESSEE FOR PRODUCING ADDITIONAL EVI DENCE. I.T.A. NOS. 2322, 2325 TO 2327, 2328 TO 2334 & 2335 TO 2341/MDS/2013 8 4(A). ON THE ISSUE OF UN-PROVED CREDITORS, THE DR A GAIN OBJECTED TO THE ADDITIONAL EVIDENCE IN THE FORM OF CONFIRMAT ION LETTERS FROM THE ALLEGED CREDITORS. THE LD.DR CONTENDED THAT TH E ASSESSEE HAS MISERABLY FAILED TO GIVE ANY PLAUSIBLE REASON AS TO WHY SUCH CONFIRMATIONS WERE NOT BROUGHT BEFORE THE ASSESSING OFFICER. IN ORDER TO SUPPORT HIS CONTENTIONS, THE LD.DR RELIED ON THE FOLLOWING DECISIONS: I. CIT VS. JAIPUR UDYOG LTD., REPORTED AS 227 ITR 345 (RAJ) ; II. VELJI DEORAJ VS. CIT REPORTED AS 68 ITR 708 (BOM) ; THE LD.DR FURTHER CONTENDED THAT ALL TRANSACTIONS W ERE CASH TRANSACTIONS AND NO VERACITY CAN BE ATTACHED TO THE SAID TRANSACTIONS. THE LD.DR VEHEMENTLY SUPPORTED THE I MPUGNED ORDERS ON THE ISSUES. 4(B). ON THE ISSUE OF UN-ACCOUNTED INVESTMENT IN TH E PROPERTIES U/S.69C AND DEEMED DIVIDEND U/S.2(22)(E) ARISING IN AYS.2006-07, 2007-08, 2008-09 & 2009-10, THE LD.DR SUPPORTED THE ORDER OF CIT(APPEALS) AND PRAYED FOR THE DISMISSAL OF THE AP PEALS OF THE ASSESSEE. I.T.A. NOS. 2322, 2325 TO 2327, 2328 TO 2334 & 2335 TO 2341/MDS/2013 9 4(C). AS REGARDS THE ISSUE OF ADDITION ON ACCOUNT O F UN-EXPLAINED EXPENSES ON THE MARRIAGE, THE DR SUBMITTED THAT THE ADDITION HAS BEEN RIGHTLY MADE ON THE BASIS OF DOCUMENTS SEIZED DURING SEARCH PROCEEDINGS. AS PER SEIZED DOCUMENTS, THE ASSESSEE HAD INCURRED EXPENDITURE TO THE TUNE OF ` 28.50 LAKHS ON THE MARRIAGE OF HIS SON. THE ASSESSEE HAS WITHDRAWN CASH OF ` 26.20 LAKHS FROM THE GROUP COMPANIES AS PER THE EVIDENCE SEIZED DURING SEARCH. AS FOR REMAINING AMOUNT OF ` 2.3 LAKHS, NO DETAILS WERE AVAILABLE AND THE ASSESSEE HAS ALSO NOT BEEN ABLE T O GIVE SATISFACTORY REPLY. THUS, THE SAME HAS BEEN ADDED AS UN-EXPLAINED EXPENDITURE. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES. WE HAVE ALSO PE RUSED THE ORDERS OF THE AUTHORITIES BELOW, AS WELL AS THE DEC ISIONS ON WHICH THE LD.DR HAS PLACED RELIANCE. THE LD.AR HAS MADE A PRAYER FOR PLACING ON RECORD ADDITIONAL EVIDENCE IN THE FORM O F DEED OF PARTITION DATED 05-02-2002 AND CONFIRMATION LETTERS FROM CREDITORS IN SUPPORT OF HIS CLAIM TOWARDS OPENING BALANCE IN THE AY.2003-04 AND UN-PROVED CREDITORS. THE LD.AR OF THE ASSESSEE HAS NOT BEEN ABLE TO GIVE ANY CONVINCING REASON AS TO WHY THESE DOCUMENTS WERE NOT PLACED BEFORE THE ASSESSING OFFICER AT THE TIME OF I.T.A. NOS. 2322, 2325 TO 2327, 2328 TO 2334 & 2335 TO 2341/MDS/2013 10 ASSESSMENT ORDER BEFORE THE FIRST APPELLATE AUTHORI TY FOR CONSIDERATION. WE FIND THAT DEED OF PARTITION ALLE GEDLY EXECUTED BY THE MOTHER OF THE ASSESSEE AND OTHER FAMILY MEMB ERS IS NEITHER REGISTERED NOR WITNESSED. THE SAME IS SKETCHY AND DOES NOT GIVE THE DETAILS OF THE RECOVERABLES WHICH HAVE BEEN ASS IGNED TO THE ASSESSEE THEREIN. A PERUSAL OF THESE DOCUMENTS DOES NOT GENERATE CONFIDENCE IN THEM. THE DOCUMENTS ARE NOT HING BUT AN AFTERTHOUGHT TO FILL IN THE LACUNA. NO RELIANCE CA N BE PLACED ON THE SELF SERVING CONFIRMATION LETTERS AND THE UNREGISTE RED DEED OF PARTITION. THE PRAYER OF THE ASSESSEE FOR FILING A DDITIONAL EVIDENCE IS AS SUCH REJECTED. 6. THE ASSESSEE HAS TRIED TO MAKE AN UN-SUCCESSFUL ATTEMPT TO EXPLAIN THE OPENING BALANCE IN THE AY.2003-04 AND U N-PROVED CREDITORS IN THE AYS. 2003-04, 2004-05, 2005-06, 20 06-07, 2007- 08 AND 2008-09. THE ASSESSEE HAS NOT BROUGHT ON RE CORD ANY RELIABLE EVIDENCE BEFORE THE ASSESSING OFFICER OR T HE CIT(APPEALS) TO SHOW THE VERACITY OF THE OPENING BALANCE AND THE CREDITORS. THE LD. AR OF THE ASSESSEE HAS NOT BEEN ABLE TO CONTROV ERT THE WELL REASONED AND DETAILED FINDINGS OF THE AUTHORITIES B ELOW ON THESE TWO ISSUES. THEREFORE, WE CONFIRM THE FINDINGS OF THE CIT(APPEALS) WITH RESPECT TO UN-EXPLAINED OPENING BALANCE IN AY. 2003-04 AND I.T.A. NOS. 2322, 2325 TO 2327, 2328 TO 2334 & 2335 TO 2341/MDS/2013 11 UN-PROVED CREDITORS U/S.68 OF THE ACT IN AY.2003-04 TO 2008-09. BOTH THESE GROUNDS IN APPEALS OF THE ASSESSEE ARE T HUS DISMISSED. 7. THE LD.AR ON THE ISSUE OF UN-ACCOUNTED INVESTMEN T IN PROPERTIES U/S.69C HAS SUBMITTED THAT ADDITION HAS BEEN MADE ON THE BASIS OF PAPERS SEIZED DURING SEARCH OPERATIONS . A COPY OF THE SAID PAPERS HAVE BEEN PLACED ON RECORD AT PAGE NOS. 12 TO 15 OF THE PAPER BOOK. IN THE SAID TABULATED PAPERS, THE DETAILS OF THE PROPERTIES PURCHASED IN THE NAMES OF THE ASSESSEE, HIS FAMILY MEMBERS AND RELATIVES ARE GIVEN. ACCORDING TO THE AR, THE ADDITION HAS BEEN MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DIFFERENCE BETWEEN THE VALUE MENTIONED IN THE SALE DEED AND THE PAPER SHEETS SEIZED DURING SEARCH. THE DIFFERENCE IN THE VALUE AROSE, AS THE VALUE OF THE PROPERTIES HAVE BEEN ROU NDED-OFF IN THE PAPER SEIZED DURING THE SEARCH PROCEEDINGS. THE S AID TABULATED SHEET WAS PREPARED TO GIVE THE DETAILS OF THE PROP ERTIES TO BANK FOR TENDERING AS COLLATERAL SECURITY. THE AR HAS S TATED THAT THE DIFFERENCE BETWEEN THE VALUE MENTIONED IN THE PAPER SEIZED DURING SEARCH AND THE REGISTERED DOCUMENT CAN BE EXPLAINED BY THE ASSESSEE IF ONE OPPORTUNITY IS GRANTED. THE LD.DR HAS ALSO NOT I.T.A. NOS. 2322, 2325 TO 2327, 2328 TO 2334 & 2335 TO 2341/MDS/2013 12 RAISED ANY SERIOUS OBJECTION FOR RE-VERIFICATION OF THE DETAILS AND VALUE OF THE PROPERTIES MENTIONED IN THE SEIZED DOC UMENT. IN VIEW OF THE PRAYER MADE BY THE LD.AR OF THE ASSE SSEE AND THE FACT THAT THE VALUES OF THE PROPERTIES CAN BE D ETERMINED BY EXAMINATION OF THE REGISTERED DOCUMENT, THE ISSUE C AN BE REMITTED TO ASSESSING OFFICER. THE SUBMISSIONS MADE BY THE ASSESSEE CAN BE CROSS-VERIFIED FROM THE BANK/BANKS WHERE THE TIT LE DEEDS OF THE PROPERTIES ARE ALLEGEDLY SUBMITTED AS COLLATERAL SE CURITY. ACCORDINGLY, WE REMIT THE ISSUE BACK TO ASSESSING O FFICER FOR FRESH ADJUDICATION AFTER NECESSARY VERIFICATION. 8. IN THE APPEALS FOR THE AY.2006-07, 2008-09 & 200 9-10, THE AR HAS ASSAILED THE FINDINGS OF THE CIT(APPEALS) ON THE ISSUE OF DEEMED DIVIDEND U/S.2(22)(E) OF THE ACT. THE ASSES SEE IS A SHAREHOLDER AND DIRECTOR IN M/S.J.R.PACKAGES (P) LT D., M/S.J.R.BUSINESS AND RESORTS (P) LTD., & M/S.VENCRA FT PAPER MILLS P. LTD. THE ASSESSEE RECEIVED SUMS FROM THE COMPAN IES IN WHICH THE ASSESSEE IS A SUBSTANTIAL SHAREHOLDER. THE ASS ESSING OFFICER HAS MADE ADDITION OF THE AMOUNTS SO RECEIVED AS DEE MED DIVIDEND. THE SAID COMPANIES ARE HAVING ACCUMULATE D PROFITS AND RESERVES. THE CONTENTION OF THE LD.AR IS THAT THE AMOUNTS RECEIVED BY THE ASSESSEE FROM THE SAID COMPANIES IS THE MONT HLY SALARY I.T.A. NOS. 2322, 2325 TO 2327, 2328 TO 2334 & 2335 TO 2341/MDS/2013 13 WHICH HAS BEEN DEBITED IN THE ACCOUNTS OF THE COMPA NY AT THE END OF THE YEAR BY A SINGLE ENTRY INSTEAD OF MONTHLY WI THDRAWALS. THE ASSESSING OFFICER HAS TAKEN PEAK DEBIT TO MAKE ADDI TION AS DEEMED DIVIDEND. THE CIT(APPEALS) HAVE SUSTAINED T HE ADDITION MADE BY THE ASSESSING OFFICER. A PERUSAL OF THE OR DERS OF AUTHORITIES BELOW SHOW THAT THEY HAVE NOT EXAMINED THE ISSUE IN THE LIGHT OF ARGUMENT RAISED BY THE AR. IN OUR CON SIDERED VIEW, THIS ISSUE NEEDS A RE-VISIT TO THE ASSESSING OFFICE R FOR FRESH ADJUDICATION. THE ASSESSING OFFICER IS DIRECTED TO ASCERTAIN WHETHER THE AMOUNT IS A SALARY OR A DEEMED DIVIDEND AS DETERMINED EARLIER? THIS GROUND OF APPEAL OF THE A SSESSEE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW. 9. THE NEXT ISSUE IN APPEAL FOR THE AY.2009-10 IS W ITH RESPECT TO UN-EXPLAINED EXPENDITURE ON THE MARRIAGE OF THE SON OF THE ASSESSEE. THE AR OF THE ASSESSEE HAS SUBMITTED THA T THE ASSESSEE HAS INCURRED TOTAL EXPENDITURE OF ` 7.00 LAKHS ON THE WEDDING OF HIS SON, WHEREAS THE ASSESSING OFFICER H AS DETERMINED THE EXPENDITURE ON THE WEDDING AS ` 28.50 LAKHS ON THE BASIS OF THE SEIZED DOCUMENT. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS ALSO APPENDED CERTAIN RECEIPTS AND WRIT INGS FROM THE I.T.A. NOS. 2322, 2325 TO 2327, 2328 TO 2334 & 2335 TO 2341/MDS/2013 14 DIARY SEIZED DURING SEARCH PROCEEDINGS FROM WHICH I T IS CLEARLY EVIDENT THAT THE CONTENTION OF THE ASSESSEE THAT ON LY ` 7.00 LAKHS HAS BEEN SPENT ON WEDDING OF THE SON IS NOT CORRECT . WE DO NOT FIND ANY MERIT IN THE SUBMISSIONS OF THE AR ON THIS ISSUE. THEREFORE, THIS GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 10. IN ALL THE SEVEN APPEALS, THE LD.AR OF THE ASSE SSEE HAS MADE SUBMISSIONS WITH REGARD TO LEVY OF INTEREST U/ S.234A, 234B & 234C OF THE ACT. IN SUPPORT OF HIS SUBMISSIONS, TH E AR HAS PLACED RELIANCE ON THE DECISION OF THE CO-ORDINATE BENCH O F THE TRIBUNAL IN THE CASE OF ACIT VS. V.N.DEVADOSS (SUPRA). THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE SAID APPEAL HAS HELD T HAT THE INTEREST U/S.234A IS CHARGEABLE FROM THE EXPIRY OF THE NOTIC E PERIOD GIVEN U/S.153A TO THE DATE OF COMPLETING THE ASSESSMENT U /S.143(3) OF THE ACT. AS REGARDS LEVY OF INTEREST U/S.234B, THE TRIBUNAL HAS OBSERVED THAT INTEREST U/S.234B IS TO BE LEVIED ONL Y ON THE ADDITIONAL TAX LEVIED ON THE ENHANCED INCOME DETERM INED U/S.153A R.W.S.143. THEREFORE, THE PERIOD OF CHARGE SHOULD BE FROM THE DATE OF DETERMINATION OF THE INCOME U/S.143(1) R.W.S.153 A TO THE DETERMINATION OF THE INCREASED TOTAL INCOME U/S.153 A R.W.S.143(3). THE INTEREST LEVIED UNDER THE AFORESAID SECTIONS HA S TO BE CHARGED I.T.A. NOS. 2322, 2325 TO 2327, 2328 TO 2334 & 2335 TO 2341/MDS/2013 15 AS PER THE DECISION OF THE TRIBUNAL IN THE CASE OF ACIT VS. V.N.DEVADOSS (SUPRA). 11. IN THE RESULT, THE APPEALS OF THE ASSESSEE IN I TA NOS.2328, 2329 & 2330 ARE DISMISSED AND APPEALS OF THE ASSESS EE IN ITA NOS.2331, 2332, 2333 & 2334 ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES IN THE TERMS AFORESAID. ITA NOS. 2335, 2336, 2337, 2338, 2339, 2340 & 2341/ MDS/2013 AYS. 2003-04, 2004-05, 2005-06, 2006-07, 2007-08, 2 008-09 & 2009-10 : 12. THE APPEALS HAVE BEEN FILED BY THE ASSESSEE AGA INST THE ORDER OF THE CIT(APPEALS)-II, COIMBATORE. IN ALL T HE SEVEN APPEALS, COMMON ISSUES ARE INVOLVED. THEREFORE, ALL THE APP EALS ARE TAKEN UP TOGETHER FOR ADJUDICATION. 13. A SEARCH WAS CONDUCTED IN THE CASE OF SHRI M.RA MAMURTHY, HUSBAND OF THE ASSESSEE. CONSEQUENT TO THE SEARCH, NOTICE U/S.153C WAS ISSUED TO THE ASSESSEE. THE ASSESSEE FILED RETURN OF INCOME IN RESPONSE TO THE NOTICE. THE ASSESSING OFFICER MADE CERTAIN ADDITIONS IN THE RETURN FILED BY THE ASSESS EE FOR THE AYS. 2003-04, 2004-05, 2005-06, 2006-07, 2007-08, 2008-0 9 AND 2009- 10. AGGRIEVED AGAINST THE ADDITIONS, THE ASSESSEE PREFERRED I.T.A. NOS. 2322, 2325 TO 2327, 2328 TO 2334 & 2335 TO 2341/MDS/2013 16 APPEALS FOR THE RESPECTIVE AYS BEFORE THE CIT(APPEA LS). THE CIT(APPEALS) DISMISSED THE APPEALS OF THE ASSESSEE AND HENCE THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNA L FOR ALL THE ABOVE MENTIONED SEVEN AYS. THE CONCISE ISSUES RAIS ED IN THE APPEALS ARE AS UNDER: AY. 2003 - 04 2004 - 05 2005 - 06 2006 - 07 2007 - 08 2008 - 09 2009 - 10 ITA NO. 23 35 /13 23 36 /13 233 7 /13 233 8 /13 233 9 /13 2 3 40 /13 234 1 /13 ADDITIONS MADE BY AO OPENING BALANCE 66,10,000 - - - - - - UN-PROVED CREDITORS U/S.68 15,00,000 20,00,000 18,00,000 84,23,200 - - - DEEMED DIVIDEND SEC.2(22)(E) - - - 33,750 53,141 8,18,177 15,71,719 14. THE LD.AR OF THE ASSESSEE HAS MADE SIMILAR SUBM ISSIONS IN RESPECT OF THE ADDITIONS MADE IN CASE OF ASSESSEE, WHAT HE MADE IN THE CASE OF THE HUSBAND OF THE ASSESSEE SHRI M.R AMAMURTHY (SUPRA). THE LD.AR SUBMITTED THAT IN THE CASE OF P RESENT ASSESSEE, THE ONLY DIFFERENCE IS THAT IN AY.2003-04 THE REASO N FOR OPENING BALANCE IS THAT THE FATHER OF THE ASSESSEE SHRI S.R . RAMA SWAMY HAD ASSIGNED RECOVERABLE TO THE TUNE OF ` 55.00 LAKHS VIDE DEED OF PARTITION DATED 16-06-2001. THE OPENING BALANCE IS ARISING FROM THE AMOUNTS RECOVERED FROM THE DEBTORS ASSIGNED TO THE ASSESSEE THROUGH PARTITION DEED. I.T.A. NOS. 2322, 2325 TO 2327, 2328 TO 2334 & 2335 TO 2341/MDS/2013 17 15. BOTH SIDES HEARD. WE FIND THAT ISSUES RAISED I N THE PRESENT APPEALS ARE IDENTICAL TO THE ONE WHICH WE HAVE ADJU DICATED IN THE CASE OF SHRI M.RAMAMURTHY, HEREIN ABOVE. THE ONLY DIFFERENCE IN FACTS IS ON THE ISSUE OF OPENING BALANCE IN AY.2003 -04. IN THE CASE OF SHRI M.RAMAMURTHY, THE ALLEGED DEED OF PART ITION WAS EXECUTED BY HIS MOTHER WHEREAS IN THE CASE OF ASSES SEE, THE ALLEGED DEED OF PARTITION HAS BEEN EXECUTED BY THE FATHER OF THE ASSESSEE. WE FIND THAT IN THE PRESENT CASE ALSO, T HE DEED OF PARTITION ON WHICH THE LD.AR HAS PLACED RELIANCE IS AN UN- REGISTERED DOCUMENT AND WAS NOT PLACED BEFORE THE A UTHORITIES BELOW. THIS GROUND OF APPEAL OF THE ASSESSEE IS DI SMISSED FOR THE DETAILED REASONS RECORDED IN PARA NOS.5 & 6 HEREIN ABOVE. 16. FOR THE AYS.2003-04, 2004-05, 2005-06 AND 2006- 07, THE AR HAS ASSAILED THE FINDINGS OF THE CIT(APPEALS) ON THE ISSUE OF UN-PROVED CREDITORS. THIS ISSUE IS ALSO DEALT IN D ETAIL IN THE CASE OF SHRI M.RAMAMURTHY. THIS GROUND OF APPEAL IS ALSO D ISMISSED FOR THE REASONS MENTIONED IN PARA NOS.5 & 6 ABOVE. 17. THE THIRD ISSUE IN APPEAL IS WITH REGARD TO ADD ITION MADE ON ACCOUNT OF DEEMED DIVIDEND. THE AR HAS SUBMITTED T HAT THE CASE OF ASSESSEE IS ON SAME FOOTING AS THAT OF HER HUSBA ND. THE LD.DR I.T.A. NOS. 2322, 2325 TO 2327, 2328 TO 2334 & 2335 TO 2341/MDS/2013 18 HAS NOT CONTROVERTED TO THE STATEMENT MADE BY THE L D.AR. ACCORDINGLY, THIS GROUND OF APPEAL OF THE ASSESSEE IS REMITTED BACK TO THE FILE OF ASSESSING OFFICER FOR THE DETAILED R EASONS GIVEN IN PARA NO.8 HEREIN ABOVE. 18. IN THE RESULT, THE APPEALS OF THE ASSESSEE FOR THE AYS.2003- 04, 2004-05, AND 2005-06 ARE DISMISSED. THE APPEAL FOR THE AYS.2006-07 IS PARTLY ALLOWED FOR STATISTICAL PURPO SES AND THE APPEALS FOR THE AYS.2007-08, 2008-09 & 2009-10 ARE ALLOWED FOR STATISTICAL PURPOSES. ITA NOS. 2322, 2325, 2326 & 2327/MDS/2013 AYS. 2005-06, 2006-07 & 2007-08 : 19. THE ABOVE APPEALS FOR THE AYS. 2005-06, 2006-07 & 2007-08 HAVE BEEN FILED BY THE SONS OF SHRI M.RAMAMURTHY. THE ADDITIONS HAVE BEEN MADE IN THE HANDS OF THE PRESENT ASSESSEE S IN PURSUANCE TO RETURN OF INCOME FILED ON ISSUANCE OF NOTICE U/S.153C OF THE ACT. THE ADDITIONS HAVE BEEN MADE ON ACCOUN T OF UN- PROVED CASH CREDITORS. SIMILAR ADDITIONS WERE MADE IN THE HANDS OF SHRI M.RAMAMURTHY. WE FIND THAT THE ADDITIONS I N THE HANDS OF ASSESSEES HAVE BEEN MADE FOR SIMILAR REASONS AS IN THE CASE OF I.T.A. NOS. 2322, 2325 TO 2327, 2328 TO 2334 & 2335 TO 2341/MDS/2013 19 SHRI M.RAMAMURTHY. THE PRESENT APPEALS ARE DISMISS ED FOR THE DETAILED REASONS GIVEN IN PARA NOS.5 & 6 HEREIN ABO VE. ORDER PRONOUNCED ON TUESDAY, THE 25 TH MARCH, 2014 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) (VI KAS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER DATED: 25 TH MARCH, 2014 TNMM COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR