M.Ramakrishnan, CHENNAI V. JCIT, Pondicherry

ITA 421/CHNY/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81229 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 21-08-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 18-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GURU BHASHYAM
• Assessee Lawyers: B K MOORTHY
• Keywords: Principle of natural justice
• Section: 27

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. NOS. 419, 420 & 421/MDS/2014 ASSESSMENT YEARS: 2008-09 & 2009-10 SRI M.RAMAKRISHNAN, NO.87, VYSIAL STREET, PONDICHERRY-605 001 [PAN: AAIPR 4307 F] ( '& /APPELLANT) VS THE JOINT COMMISSIONER OF INCOME TAX, PONDICHERRY RANGE, PONDICHERRY ( '('& /RESPONDENT) / APPELLANT BY : SHRI B.K.MOORTHY, CA., / RESPONDENT BY : SHRI GURU BHASHYAM, JCIT / DATE OF HEARING : 21-08-2014 / DATE OF PRONOUNCEMENT : 27-10-2014 $) / O R D E R PER VIKAS AWASTHY, J.M: THE APPEAL IN ITA NO.419/MDS/2014 FOR THE ASSESSMEN T YEAR (AY) 2008-09 HAS BEEN FILED BY THE ASSESSEE IM PUGNING THE ORDER OF COMMISSIONER OF INCOME TAX(APPEALS)-VI, CH ENNAI DATED 30-12-2013 CONFIRMING PENALTY LEVIED U/S.271D OF TH E INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT). THE APPEALS IN ITA NOS.420 & 421/MDS/2014 FOR THE AYS.2008-09 & 2009-1 0 I.T.A. NOS. 419, 420 & 421/MDS/14 2 RESPECTIVELY HAVE BEEN FILED BY THE ASSESSEE AGAINS T THE ORDERS OF COMMISSIONER OF INCOME TAX(APPEALS)-VI, CHENNAI DAT ED 30-12-2013 CONFIRMING PENALTY LEVIED U/S.271E OF TH E ACT. 2. THE FACTS OF THE CASE AS EMANATING FROM THE RECO RDS ARE: A SURVEY U/S.133A OF THE ACT WAS CONDUCTED IN THE C ASE OF SHRI A.KANNAN, PROPRIETOR: VADAMALAYAN FIANANCE, NO.C-4, II FLOOR, THIYAGARAJA APARTMENT, FIRST MAIN ROAD, THANTHAI PE RIYAR NAGAR, PONDICHERRY ON 08-09-2011. SHRI A.KANNAN WAS RUNNIN G UN-LICENSED FINANCING BUSINESS. HE USE TO LEND MON EY ON PRO- NOTES. BOOKS OF ACCOUNT AND SUPPORTING DOCUMENTS W ERE IMPOUNDED DURING THE COURSE OF SURVEY. DURING THE EXAMINATION OF BOOKS IT TRANSPIRED THAT THE ENTIRE BUSINESS OF LEN DING AND ACCEPTING RE-PAYMENT OF LOAN AMOUNTS WAS DONE IN C ASH. DURING SURVEY, IT WAS NOTICED THAT THE ASSESSEE HA D ALSO TAKEN A LOAN OF ` 20.00 LAKHS IN CASH FROM SHRI A.KANNAN AND THE SAME WAS RE-PAID IN INSTALMENTS IN CASH. PENALTY P ROCEEDINGS U/S.271D FOR TAKING LOAN IN CASH AND VIOLATING THE PROVISIONS OF SECTION 269SS IN AY.2008-09 WERE INITIATED. SIMILAR LY, PENALTY PROCEEDINGS U/S.271E WERE INITIATED IN THE AYS.2008 -09 & 2009-10 FOR RE-PAYMENT OF LOAN IN CASH IN VIOLATION OF THE PROVISIONS OF SECTION 269T. THE ASSESSEE HAD RE-PAID THE LOAN AMO UNT IN CASH I.T.A. NOS. 419, 420 & 421/MDS/14 3 INSTALMENTS OF ` 2.00 LAKHS EACH ON VARIOUS DATES DURING THE PERIOD RELEVANT TO THE AYS.2008-09 & 2009-10. 3. DURING THE COURSE OF PENALTY PROCEEDINGS, THE AS SESSEE FILED AN AFFIDAVIT DT.22-08-2012 BEFORE THE ASSESSING OFF ICER ADMITTING THAT THE LOAN OF ` 20.00 LAKHS WAS TAKEN FROM MR.KANNAN BY WAY OF CASH ON 19-07-2007 AND REPAID THE SAME IN CASH ON S EVERAL DATES. THE LOAN WAS TAKEN FOR HIS PERSONAL PURPOSE. THERE AFTER, THE ASSESSEE CHANGED HIS STAND AND STATED THAT HE HAD R ECEIVED ` 20.00 LAKHS FROM MR.A.KANNAN, AS ADVANCE FOR SALE O F HIS PROPERTY. THE SALE OF LAND COULD NOT BE FINALIZED, THEREFORE, THE ASSESSEE HAD TO RETURN THE ADVANCE. THE ADVANCE A MOUNT WAS RETURNED BY THE ASSESSEE TO MR.KANNAN IN VARIOUS CA SH INSTALLMENTS, AS THE ASSESSEE HAD INVESTED THE AMOU NT OF ADVANCE ELSEWHERE. NOT SATISFIED WITH THE EXPLANATION FURN ISHED BY THE ASSESSEE FOR ACCEPTING LOAN IN CASH AND RE-PAYMENT OF THE SAME IN CASH, THE ASSESSING OFFICER LEVIED PENALTY U/S.2 71D R.W.S.269SS AND U/S.271E R.W.S.269T VIDE SEPARATE ORDERS. AGGRIEVED BY THE PENALTY ORDERS FOR THE RESPECTIVE AYS, THE ASSESSEE CHALLENGED THE SAME BEFORE THE CIT(APPEALS ). THE CIT(APPEALS) VIDE IMPUGNED ORDERS UPHELD THE FINDIN GS OF ASSESSING OFFICER AND CONFIRMED THE PENALTIES LEVIE D U/S.271D & I.T.A. NOS. 419, 420 & 421/MDS/14 4 271E FOR THE IMPUGNED AYS. NOW, THE ASSESSEE HAS C OME IN SECOND APPEAL BEFORE THE TRIBUNAL ASSAILING THE ACT ION OF CIT(APPEALS) IN CONFIRMING THE PENALTY ORDERS. 4. SHRI B.K.MOORTHY, APPEARING ON BEHALF OF THE ASS ESSEE SUBMITTED THAT CASH TRANSACTIONS WERE UNDERTAKEN ON ACCOUNT OF BUSINESS EXPEDIENCY. THE LD.AR OF THE ASSESSEE SUB MITTED THAT THE ASSESSEE WAS CONSTRAINED TO TAKE CASH LOAN FROM MR.A.KANNAN IN ORDER TO PAY SALE TAX DEMAND OF ` 40,58,189/-. THE LD.AR CONTENDED THAT THE ASSESSEE IS A PARTNER IN M/S.IPO UR GKC & RKC & SONS, PUDUCHERRY. THE FIRM IS RUNNING A PETROL B UNK. THERE WAS A SALE TAX DEMAND OF ` 40,58,189/- ON THE FIRM VIDE DEMAND NOTICE DT.03-07-2007 FROM THE COMMERCIAL TAX OFFICER-II, P UDUCHERRY. THE SAID PAYMENT WAS TO BE MADE WITHIN A PERIOD OF THIRTY DAYS. PETROL BUNK BEING A NON-PRIORITY SECTOR, THE ASSESS EE COULD NOT AVAIL LOAN FROM BANKS IMMEDIATELY. THE NON-PAYMENT OF DEMAND WOULD HAVE ADVERSELY AFFECTED THE SUPPLIES OF PETRO L/OIL. THE ASSESSEE IN ORDER TO MEET DEMAND DECIDED TO SELL HI S PROPERTY AT RAINBOW NAGAR, PUDUCHERRY. FOR THIS HE APPROACHED MR.A.KANNAN, WHO AGREED TO PAY AN ADVANCE OF ` 20,00,000/- IN CASH ON 19-07-2007. THE AMOUNT WAS DEPOSITED INTO FIRMS ACCOUNT TO MEET THE SALES TAX DEMAND. LATER ON, TH E SALE OF LAND I.T.A. NOS. 419, 420 & 421/MDS/14 5 DID NOT MATERIALIZE AND THE ASSESSEE WAS CONSTRAINE D TO REFUND THE AMOUNT RECEIVED FROM MR.KANNAN. SINCE, THE FUNDS W ERE LOCKED IN THE FIRM, SHRI KANNAN AGREED TO RECEIVE BACK THE AD VANCE IN CASH INSTALMENTS. THE LD.AR FURTHER CONTENDED THAT THE ASSESSEE WAS NOT GIVEN SUFFICIENT OPPORTUNITY TO PUT-FORTH HIS C ASE BY THE AUTHORITIES BELOW. THE JOINT COMMISSIONER OF INCOM E TAX IN HIS PENALTY ORDER HAS RELIED ON THE STATEMENT MADE BY S HRI A.KANNAN WHEREIN HE HAS ADMITTED THAT HE IS RUNNING MONEY LE NDING BUSINESS AND ALL LENDINGS ARE MADE BY HIM IN CASH A ND RE- PAYMENTS ARE RECEIVED BACK IN CASH. THE ASSESSEE W AS NOT AFFORDED OPPORTUNITY TO EXAMINE THE STATEMENTS IN V IOLATION OF PRINCIPLES OF NATURAL JUSTICE. 5. ON THE OTHER HAND, SHRI GURU BHASHYAM, APPEARING ON BEHALF OF THE REVENUE VEHEMENTLY SUPPORTED THE FIND INGS OF CIT(APPEALS) IN CONFIRMING LEVY OF PENALTY U/S.271D & 271E. THE LD.DR SUBMITTED THAT THE ASSESSEE HAS BEEN CHANGING ITS STAND. IN AN AFFIDAVIT FILED BEFORE THE ASSESSING OFFICER, TH E ASSESSEE HAD CATEGORICALLY STATED THAT THE LOAN IN CASH HAS BEEN TAKEN FOR PERSONAL PURPOSE. NO COMPELLING REASON WHAT-SO-EVE R WAS MENTIONED IN THE AFFIDAVIT FOR TAKING LOAN IN CASH. THE LD.DR PLACED RELIANCE ON THE DECISION OF THE CO-ORDINATE BENCH OF THE I.T.A. NOS. 419, 420 & 421/MDS/14 6 TRIBUNAL IN THE CASE OF P.MUTHUKARUPPAN VS. JCIT IN ITA NOS. 220 TO 228/MDS/2014 DECIDED ON 29-05-2014. THE ASSESSEE THEREIN HAD ALSO TAKEN CASH LOAN FROM SHRI A.KANNAN, PROPRI ETOR: VADAMALAYAN FIANANCE, NO.C-4, II FLOOR, THIYAGARAJA APARTMENT, FIRST MAIN ROAD, THANTHAI PERIYAR NAGAR, PONDICHERR Y AND HAD REPAID THE SAME IN CASH. PENALTIES U/S.271D AND 27 1E FOR THE IMPUGNED AYS THEREIN WERE LEVIED. IN THE FIRST APP EAL, THE CIT(APPEALS) CONFIRMED THE PENALTIES. ON APPEAL BE FORE THE TRIBUNAL, THE CO-ORDINATE BENCH OF THE TRIBUNAL VIDE ORDER DT.29-05-2014, DISMISSED THE APPEALS OF THE ASSESSE E AND CONFIRMED THE PENALTY. TO BUTTRESS HIS ARGUMENTS, THE LD.DR FURTHER PLACED RELIANCE ON THE FOLLOWING DECISIONS: I. ASSISTANT DIRECTOR OF INSPECTION VS. KUM. A.B.SHAN THI REPORTED AS 255 ITR 258 (SC); II. P. BASKAR VS. CIT REPORTED AS 340 ITR 560 (MADRAS); III. DHANJI R. ZALTE VS. ACIT REPORTED AS 265 ITR 204 (BOMBAY); IV. THENAMAL CHHAJJER VS. JCIT REPORTED AS 98 ITD 210 (CHENNAI); AND V. KHIZARIA LEATHERS VS. DCIT REPORTED AS 99 TTJ 616 (CHENNAI). I.T.A. NOS. 419, 420 & 421/MDS/14 7 TO COUNTER THE ARGUMENT OF THE ASSESSEE, THAT THE A SSESSING OFFICER HAD NOT GIVEN ADEQUATE OPPORTUNITY TO REBUT THE MATERIALS COLLECTED AGAINST FOR LEVY OF PENALTY, THE LD.DR PL ACED RELIANCE ON THE JUDGMENT OF THE HON'BLE CALCUTTA HIGH COURT IN T HE CASE OF HINDUSTAN TOBACCO CO. VS. CIT REPORTED AS 211 TAXMAN 111 (CAL). 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE ALSO EXAMINED THE D ECISIONS ON WHICH THE LD.DR HAS PLACED RELIANCE TO STRENGTHEN H IS SUBMISSIONS. IT IS AN UN-DISPUTED FACT THAT THE ASSESSEE HAS TAK EN CASH LOAN OF ` 20.00 LAKHS IN THE PERIOD RELEVANT TO THE AY.2008-0 9 AND HAS REPAID THE SAME IN CASH ON VARIOUS DATE DURING THE PERIOD RELEVANT TO THE AY.2008-09 & 2009-10. BY ACCEPTING LOAN IN EXCESS OF ` 20,000/- IN CASH, THE ASSESSEE HAD CONTRAVENED THE PROVISIONS OF SECTION 269SS OF THE ACT. SIMILARLY, THE ASSESSEE HAS ALSO VIOLATED THE PROVISIONS OF SECTION 269T BY MAKING R EPAYMENT OF THE LOAN AMOUNT IN EXCESS OF ` 20,000/- IN CASH. BY VIOLATING THE PROVISIONS OF THE AFORESAID SECTIONS, THE ASSESSEE HAS MADE HIMSELF LIABLE FOR PENALTY U/S.271D & 271E. THE AS SESSEE IN THESE I.T.A. NOS. 419, 420 & 421/MDS/14 8 CIRCUMSTANCES CAN ONLY ESCAPE FROM LEVY OF PENALTY IF THE ASSESSEE CAN OFFER A REASONABLE EXPLANATION FORCING HIM TO ACCEPT LOAN AMOUNT IN CASH, AND CIRCUMSTANCES COMPELLING H IM TO RE-PAY THE SAME IN CASH. THE EXPLANATION SO OFFERED SHOULD BE SUBSTANTIATED BY DOCUMENTARY EVIDENCE. 7. IN THE INSTANT CASE, THE ASSESSEE ACCEPTED ` 20.00 LAKHS FROM MR.KANNAN OF PUDUCHERRY ON 19-07-2007 IN CASH. THE ASSESSEE FILED AN AFFIDAVIT DT.22-08-2012 BEFORE TH E ASSESSING OFFICER ADMITTING THE FACT THAT HE HAS TAKEN A LOAN OF ` 20.00 LAKHS FROM MR.KANNAN BY WAY OF CASH ON 19-07-2007 AND REP AID THE SAME BY CASH ON SEVERAL DATES. THE LOAN WAS STATED TO BE TAKEN FOR HIS PERSONAL PURPOSES. ON 21-08-2012, THE ASSE SSEE FILED LETTER ALONG WITH COPIES OF RETURN OF INCOME, STATE MENT FOR THE AYS. 2008-09 & 2009-10, BANK STATEMENT OF ICICI BANK FOR THE PERIOD FROM 01-04-2007 TO 31-03-2009. IN THE SAID LETTER, THE ASSESSEE STATED THAT THE CASH WAS RECEIVED AS ADVANCE TOWARD S LAND TRANSACTION. NOT SATISFIED WITH THE EXPLANATION FU RNISHED BY THE ASSESSEE, THE ASSESSING OFFICER LEVIED PENALTY TO T HE EXTENT EQUAL TO THE AMOUNT OF LOAN TAKEN U/S.271D AS WELL AS PEN ALTY U/S.271E TO THE EXTENT OF AMOUNT OF LOAN REPAID IN CASH IN T HE AYS.2008-09 & 2009-10. BEFORE THE FIRST APPELLATE AUTHORITY, T HE ASSESSEE I.T.A. NOS. 419, 420 & 421/MDS/14 9 GAVE FOLLOWING REASON FOR ACCEPTING THE AMOUNT OF ` 20.00 LAKHS IN CASH. HE RECEIVED AN ADVANCE OF ` 20,00,000/- FOR THE SALE OF HIS PROPERTY FROM ONE MR.A.KANNAN OF PONDICHERRY. THE SALE COULD NOT BE FINALIZED AND THE APPELLANT HAD TO RET URN THE ADVANCE. SINCE HE HAD INVESTED THE ADVANCE, HE COU LD NOT IMMEDIATELY REFUND THE SAME. HE AGREED TO REFUND T HE SAME IN INSTALMENTS. BEFORE THE TRIBUNAL, THE ASSESSEE AGAIN CHANGED HI S STANCE AND CITED ALTOGETHER DIFFERENT REASON FOR TAKING ` 20.00 LAKHS IN CASH FROM MR.A.KANNAN. THE LD.AR HAS CONTENDED THA T THE ASSESSEE IS A PARTNER IN A FIRM AND THERE WAS A SAL ES TAX DEMAND OF MORE THAN ` 40.00 LAKHS. THE DEMAND NOTICE WAS ISSUED BY COMMERCIAL TAX OFFICER-II, PUDUCHERRY DT.03-07-2007 AND THE PAYMENT WAS TO BE MADE WITHIN THIRTY DAYS. THE ASS ESSEE COULD NOT ARRANGE FUNDS FROM THE BANK FOR DISCHARGING SAI D LIABILITY. THEREFORE, THE ASSESSEE DECIDED TO SELL HIS PROPERT Y AT RAINBOW NAGAR, PUDUCHERRY TO MEET THE DEMAND. MR.A.KANNAN, AGREED FOR THE SAME AND ADVANCED A SUM OF ` 20.00 LAKHS IN CASH ON 19-07-2007 AND THE ASSESSEE HANDED OVER THE XEROX C OPIES OF THE TITLE DOCUMENTS OF THE PROPERTY. WITH THIS ` 20.00 LAKHS, THE ASSESSEE WAS ABLE TO MEET THE SALE TAX DEMAND OF MO RE THAN I.T.A. NOS. 419, 420 & 421/MDS/14 10 ` 40.00 LAKHS ON 27-07-2007. THE ASSESSEE HAS PLACED ON RECORD A PHOTO COPY OF THE NOTICE OF FINAL ANNUAL ASSESSME NT AND DEMAND DT.03-07-2007 AND THE STATEMENT OF BANK ACC OUNT FROM ICICI BANK FOR THE PERIOD 01-07-2007 TO 31-07-2007. THE LD.AR OF THE ASSESSEE POINTED OUT THAT ON 19-07-2007, ` 15.00 LAKHS WAS DEPOSITED IN CASH AND AGAIN ON 20-07-2007 ` 15.00 LAKHS WAS DEPOSITED IN CASH IN THE SAID BANK ACCOUNT. ON 27- 07-2007, THE ASSESSEE MADE PAYMENT OF ` 40,58,189/- VIDE CHEQUE IN FAVOUR OF COMMERCIAL TAX OFFICER-II, PUDUCHERRY. IT WAS FURT HER STATED THAT THE SALE TRANSACTION OF LAND COULD NOT MATERIALIZE THEREFORE, THE ASSESSEE WAS ASKED TO REFUND THE ADVANCE AMOUNT. S INCE, THE FUNDS WERE LOCKED IN THE FIRM, THE ADVANCE ACCEPTED BY THE ASSESSEE WAS REPAID TO MR.A.KANNAN IN INSTALMENTS I N CASH. 8. WE ARE UNABLE TO ACCEPT THE REASONS GIVEN BY THE ASSESSEE BEFORE DIFFERENT AUTHORITIES FOR ACCEPTING `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` 20.00 LAKHS IN VIOLATION OF PROVISIONS OF SECTION 269SS. HERE IT WOULD BE RELEVANT TO MENTIO N THAT WHETHER THE LOAN WAS TAKEN FOR PERSONAL PURPOSE OR FOR THE FIRM THE PROVISIONS OF SECTION 269SS HAVE EQUAL APPLICABILIT Y. THE ASSESSEE HAS NOT BEEN ABLE TO FURNISH EXPLANATION W ORTH RELYING TO SET ASIDE THE PENALTY. IN THESE CIRCUMSTANCES, WE ARE CONSTRAINED TO UPHOLD THE ORDER OF CIT(APPEALS) CONFIRMING LEVY OF PENALTY U/S.271D. 9. NOW, WE ADVENT TO ITA NOS.420 & 421/2014 FOR THE AYS.2008-09 & 2009-10, RESPECTIVELY WHEREIN, PENALT Y U/S.271E HAS BEEN CONFIRMED BY THE CIT(APPEALS). IT HAS COM E ON RECORD THAT THE ASSESSEE HAS TAKEN LOAN FROM MR.KANNAN WHO IS RUNNING I.T.A. NOS. 419, 420 & 421/MDS/14 13 UN-LICENSED BUSINESS OF LENDING MONEY IN CASH AND R ECEIVING THE RE-PAYMENTS IN CASH. HE LENDS MONEY ON PRO-NOTES A ND RETURNS THE SAME ON RE-PAYMENTS. THE ASSESSING OFFICER IN THE PENALTY ORDER HAS RE-PRODUCED THE EXTRACT OF QUESTIONNAIRE WHEREIN MR.A.KANNAN HAS ADMITTED THAT HE RUNS MONEY LENDING BUSINESS, HE LENDS MONEY IN CASH AND RECEIVES BACK IN CASH. HE DOES NOT LEND OR RECEIVE BACK IN CHEQUE OR DRAFT. THE ASSES SEE TOOK LOAN IN CASH FROM A PRIVATE MONEY LENDER. ONCE IN THE TR AP OF PRIVATE MONEY LENDER, THE ASSESSEE WAS FORCED TO FOLLOW HIS DIKTAT. THE ASSESSEE EVEN IF WILLING TO RE-PAY THE LOAN AMOUNT THROUGH BANKING CHANNEL WAS FORCED TO PAY IN CASH DUE TO THE TERMS IMPOSED BY THE MONEY LENDER. THE ASSESSEE RE-PAID THE LOAN AMOUNT IN INSTALMENTS OF ` 2.00 LAKHS EACH IN THE PERIOD SPREAD OVER IN THE AYS.2008-09 & 2009-10. ONCE IN DEBT, ASSESSEE HAD NO OPTION BUT TO ACCEPT THE TERMS IMPOSED BY THE MONEY LENDER , MR.A.KANNAN FOR RE-PAYMENT OF LOAN AMOUNT. IN THESE CIRCUMSTANCES, WE ARE OF CONSIDERED OPINION THAT TH E ASSESSEE WAS CONSTRAINED TO RE-PAY LOAN AMOUNT AS PER THE WH IMS AND FANCIES OF MR.A.KANNAN BY VIOLATING THE PROVISIONS OF SECTION 269T. IN THE FACTS OF THE CASE, WE ARE SATISFIED THAT THE RE-PAYMENT OF LOAN AMOUNT IN CASH WAS OUT OF COMPELLING REASONS. THE PENALTY I.T.A. NOS. 419, 420 & 421/MDS/14 14 LEVIED U/S.271E IS DELETED, THE IMPUGNED ORDERS ARE SET ASIDE AND THE APPEALS OF THE ASSESSEE ARE ALLOWED. IN RESULT, THE APPEAL IN ITA NO.419/MDS/2014 IS DI SMISSED AND THE APPEALS IN ITA NOS.420 & 421/MDS/2014 ARE A LLOWED. ORDER PRONOUNCED ON MONDAY, THE 27 TH OCTOBER, 2014 AT CHENNAI. SD/- SD/- ( . . . ) ( !' ) (DR. O.K. NARAYANAN) (VIKAS AWAS THY) / VICE PRESIDENT ! '# / JUDICIAL MEMBER $ /CHENNAI, %'& /DATED: 27 TH OCTOBER, 2014 TNMM '(!)*+* /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ,-. /CIT(A) 4. , /CIT 5. */0!!12 /DR 6. 0345 /GF