Saravana Global Energy Limited, CHENNAI V. DCIT, CHENNAI

ITA 729/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6408 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 12-07-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 23-03-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS RU GEORGE
• Assessee Lawyers: K RAVI
• Keywords: Principle of natural justice

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: CHENNAI , ! . , ' BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER , AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NOS.726 TO 732/MDS/2017 /ASSESSMENT YEARS: 2007-08 TO 2013-14 M/S.SARAVANA GLOBAL ENERGY LTD., NO.15, NEW GIRI ROAD, OPP. TO HOTEL ACCORD, G.N.CHETTY ROAD, T.NAGAR, CHENNAI-600 017. VS. THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE III(4), CHENNAI-600 034. [PAN: AAHCS 3240 C ] ( & /APPELLANT) ( '(& /RESPONDENT) ./ ITA NOS.1471 TO 1477/MDS/2017 /ASSESSMENT YEARS: 2007-08 TO 2013-14 THE ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3(4), CHENNAI-600 034. VS. M/S.SARAVANA GLOBAL ENERGY LTD., NO.15, NEW GIRI ROAD, OPP. TO HOTEL ACCORD, G.N.CHETTY ROAD, T.NAGAR, CHENNAI-600 017. [PAN: AAHCS 3240 C] ( & /APPELLANT) ( '(& /RESPONDENT) ./ ITA NOS.712 TO 718/MDS/2017 /ASSESSMENT YEARS: 2007-08 TO 2013-14 M/S.INDO ASIA FINANCE LTD., NO.15, NEW GIRI ROAD, T.NAGAR, CHENNAI-600 017. [PAN: AAACI 2117 D] VS. THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE III(4), CHENNAI-600 034. ( & /APPELLANT) ( '(& /RESPONDENT) ITA NOS.726-732 & 1471-1477/MDS/2017 ITA NOS.712-718 & 1478-1482/MDS/2017 :- 2 -: ./ ITA NOS.1478 TO 1482/MDS/2017 /ASSESSMENT YEARS: 2007-08, 2010-11 TO 2013-14 THE ASST. COMMISSIONER OF INCOME TAX. CENTRAL CIRCLE III(4), CHENNAI-600 034. VS. M/S.INDO ASIA FINANCE LTD., NO.15, NEW GIRI ROAD, T.NAGAR, CHENNAI-600 017. [PAN: AAACI 2117 D] ( & /APPELLANT) ( '(& /RESPONDENT) & ) / APPELLANT BY : MR.K.RAVI, ADV. '(& ) /RESPONDENT BY : MRS.RUBY GEORGE, CIT ) /DATE OF HEARING : 17.08.2017 ) /DATE OF PRONOUNCEMENT : 17.08.2017 / O R D E R PER GEORGE MATHAN , JUDICIAL MEMBER : ITA NOS.726 TO 732/MDS/2017 ARE APPEALS FILED BY T HE ASSESSEE & ITA NOS.1471 TO 1477/MDS/2017 ARE APPEALS FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-1 9, CHENNAI, IN ITA NOS.244, 243, 242, 238, 237, 256 & 235/15-16 DATED 15.03.2017 FOR THE AYS 2007-08 TO 2013-14. 2. ITA NOS.712 TO 718/MDS/2017 ARE APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (AP PEALS)-19, CHENNAI, IN ITA NOS.99, 98, 97, 96, 95, 94 & 93/15-16 DATED 15.03.2017 FOR THE AYS 2007-08 TO 2013-14 AND ITA NOS.1478 TO 1482/MDS /2017 ARE THE APPEALS FILED BY THE REVENUE AGAINST THE COMMON ORD ER OF COMMISSIONER OF INCOME TAX (APPEALS)-19, CHENNAI, IN ITA NOS. 99 , 98, 97, 96, 95, 94 & ITA NOS.726-732 & 1471-1477/MDS/2017 ITA NOS.712-718 & 1478-1482/MDS/2017 :- 3 -: 93/15-16 DATED 15.03.2017 FOR THE AYS 2007-08 TO 20 13-14, IN WHICH REVENUE PREFERRED APPEALS FOR THE AYS 2007-08, 2010 -11 TO 2013-14 ONLY. 3. MRS.RUBY GEORGE, CIT REPRESENTED ON BEHALF OF TH E REVENUE AND MR.K.RAVI, ADV. REPRESENTED ON BEHALF OF THE ASSESS EE. 4. AS THE ABOVE SET OF APPEALS ARE INTERCONNECTED A ND CONTAINED IDENTICAL ISSUES, ALL THE APPEALS ARE DISPOSED OF B Y THIS COMMON ORDER. 5. IT WAS SUBMITTED BY THE LD.AR THAT THESE APPEALS WERE CONNECTED TO SHRI PADHAM J. CHALLANI IN ITA NO.719 TO 725/MDS/20 17 WHICH HAVE BEEN DISPOSED OF BY AN ORDER DATED 16.08.2017. IT WAS A SUBMISSION THAT THERE WAS A SEARCH IN THE PREMISES OF THE ASSESSEE ON 19. 04.2012. IT WAS A SUBMISSION THAT A SURVEY PRECEDED THE SEARCH. IT W AS A SUBMISSION THAT AS A CONSEQUENCE OF THE SEARCH, NOTICES U/S.153A CA ME TO BE ISSUED ON THE ASSESSEE AND THE ASSESSEE HAS FILED ITS RETURN OF INCOME. IT WAS A SUBMISSION THAT THE ASSESSMENT CAME TO BE COMPLETED WHEREIN DISALLOWANCE FROM THE P&L A/C HAD BEEN MADE AT 10% OF THE EXPENSES DEBITED TO OTHER EXPENSES. IT WAS A SUBMISSION THA T NO INCRIMINATING MATERIAL HAD BEEN FOUND AGAINST EITHER OF THE ASSES SEES AND CONSEQUENTLY THE ASSESSMENT MADE WAS LIABLE TO BE ANNULLED. IT WAS A SUBMISSION THAT ON APPEAL, THE LD.CIT(A) HAD PARTLY DELETED THE ADD ITIONS MADE. IT WAS A SUBMISSION THAT AGAINST THE DELETIONS, THE REVENUE IS ON APPEAL. IT WAS A FURTHER SUBMISSION THAT ON ACCOUNT OF THE NON-QUASH ING OF THE ITA NOS.726-732 & 1471-1477/MDS/2017 ITA NOS.712-718 & 1478-1482/MDS/2017 :- 4 -: ASSESSMENT, AS THERE WAS NO INCRIMINATING MATERIAL IN THE COURSE OF THE SEARCH, THE ASSESSEE IS ON APPEAL. IT WAS A SUBMIS SION THAT THE LD.CIT(A) HAS ALSO INVOKED THE PROVISIONS U/S.14A. IT WAS A SUBMISSION THAT THE ARGUMENTS WERE IDENTICAL TO THE SUBMISSIONS MADE IN THE CASE OF SHRI PADHAM J. CHALLANI. 6. IN REPLY, THE LD.DR ALSO REITERATED HER ARGUMENT S AS MADE IN THE CASE OF SHRI PADHAM J. CHALLANI. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ON PER USAL OF THE ASSESSMENT ORDERS IN THE PRESENT CASE ALSO SHOWS TH AT THERE WAS NO COOPERATION OF THE ASSESSEE IN THE COURSE OF THE AS SESSMENT PROCEEDINGS, WHICH HAS HANDICAPPED THE ASSESSMENT. IN THE CASE OF SHRI PADHAM J. CHALLANI IN PARA NO.5 OF THE ORDER, WE HAVE RESTORE D THE ISSUES TO THE FILE OF THE AO WITH THE FOLLOWING DIRECTIONS: 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ADMITT EDLY, THE ASSESSMENT ORDER DOES NOT TALK OF ANY INCRIMINATING MATERIAL. BUT, IN THE PENULTIMATE PARAGRAPHS OF PAGE-2 OF THE ASSESSMENT ORDER, THE AO TALKS OF THE MAIN SOURCE OF THE INCOME OF THE ASSESSEE BEING MYSTERIOUS OTHER SOURCE WHICH HAS NOT BEEN EXPLAI NED WITH EVIDENCE. A PERUSAL OF THE ORDER OF THE LD.CIT(A) IN PAGE NOS.12, PARA NO.4 TAL KS OF STATEMENT ON OATH RECORDED AS WELL AS THE BUSINESS PRACTICES DISCOVERED DURING TH E COURSE OF THE SEARCH WHICH HAVE BEEN THE BASIS ON WHICH ADVERSE INFERENCES HAVE BEEN DRA WN AS REGARDS THE INCOMES DECLARED FOR TAXATION. WE ARE OF THE VIEW THAT THE NON-COOP ERATION BY THE ASSESSEE IN THE COURSE OF THE ASSESSMENT HAS HAMPERED THE ASSESSMENT COMPLETE LY. THIS BEING SO, IN THE INTEREST OF NATURAL JUSTICE, THE ASSESSMENT IS SET-ASIDE AND RE STORED TO THE FILE OF THE AO FOR RE- ADJUDICATION AFRESH AFTER GRANTING THE ASSESSEE ADE QUATE OPPORTUNITY TO SUBSTANTIATE HIS CASE. ALL ISSUES ARE LEFT OPEN BEFORE THE AO. THE AO HAS TO RE-DO THE ASSESSMENT AFTER BRINGING ON RECORD THE INCRIMINATING MATERIALS, IF ANY, FOUND IN THE COURSE OF THE SEARCH. THE AO IS ALSO DIRECTED TO GRANT THE ASSESSEE, THE C OPIES OF THE STATEMENTS RECORDED IN THE COURSE OF THE SEARCH. WE ARE NOT GIVING ANY FINDIN G ON THE ISSUE OF THE ADDITIONS MADE BY THE LD.CIT(A) BY INVOKING THE PROVISIONS OF SEC.14A R/W RULE 8D AS WE HAVE SET-ASIDE THE ASSESSMENTS AND CONSEQUENTLY, THE ORDER OF THE LD.C IT(A) ALSO STANDS SET-ASIDE AND THE ISSUES ARE BEFORE THE AO FOR RE-ADJUDICATION AFTER B RINGING ON RECORD THE INCRIMINATING MATERIALS, IF ANY, FOUND IN THE COURSE OF THE SEARC H. ITA NOS.726-732 & 1471-1477/MDS/2017 ITA NOS.712-718 & 1478-1482/MDS/2017 :- 5 -: 8. CONSIDERING THE FACT THAT THESE ISSUES ARE ALSO PART OF THE GROUP OF SHRI PADHAM J. CHALLANI, RESPECTFULLY FOLLOWING THE DECISION IN THE CASE OF SHRI PADHAM J. CHALLANI, THE ISSUES IN THESE APPEAL S ARE ALSO SET-ASIDE AND RESTORED TO THE FILE OF THE AO FOR RE-ADJUDICATION ON IDENTICAL DIRECTIONS AS GIVEN IN THE CASE OF SHRI PADHAM J. CHALLANI IN ITA NOS.719 TO 725/MDS/2017 DATED 16.08.2017 FOR THE AYS 2007-08 T O 2013-14. 9. IN THE RESULT, THE APPEALS OF THE ASSESSEE AND THE APPEALS OF THE REVENUE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON AUGUST 17, 2 017, AT CHENNAI. SD/- SD/- ( . ) ( A. MOHAN ALANKAMONY ) ! /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) ! /JUDICIAL MEMBER /CHENNAI, 1 /DATED: AUGUST 17, 2017. TLN ) '23 43 /COPY TO: 1. & /APPELLANT 4. 5 /CIT 2. '(& /RESPONDENT 5. 3 ' /DR 3. 5 ( ) /CIT(A) 6. /GF