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TMI Blog2024 (6) TMI 1218X X X X Extracts X X X X X X X X Extracts X X X X ..... sus The DCIT, Central Circle -2(2),Chennai, The DCIT, Central Circle -2(2) Versus Shri. MarappaGounderPalan isamy, Shri. O. Arumugasamy Versus The DCIT, Central Circle -2(2), Chennai, Olaikaragowder Arumu gasamy Versus Addl. CIT, Central Range -2, Chennai., Shri. Senthil Kumar Arumugasamy Versus The DCIT, Central Circle -2(2), Chennai, The DCIT, Central Circle -2(2), Versus Shri. Senthil Kumar Arumugasamy SHRI MANJUNATHA. G, HON'BLE ACCOUNTANT MEMBER AND SHRI MANOMOHAN DAS, HON'BLE JUDICIAL MEMBER For the Appellant : Shri. B. Ramakrishnan, CA & Ms. Lavanya, CA For the Department : Shri. R. Clement Ramesh Kumar, CIT ORDER PER BENCH: These bunch of 30 appeals filed by different assessees' and 4 cross appeals filed by the revenue are directed against separate orders of the learned Commissioner of Income Tax (Appeals)-19, Chennai, all even dated 23.03.2022 and pertains to assessment years 2013-14, 2014-15, 2015-16, 2016-17, 2017-18 & 2018-19. Since, facts are identical and issues are common and interlinked to each other, for the sake of convenience, these cross appeals filed by the assessees' and as well as the revenue are being heard together and are disposed off, by this consol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irectors and unknown purchasers, said MoU was entered into for sale of assets of M/s. Bonjour Bonheur Pvt Ltd, along with its resort running business and 125 KW windmill for a consideration of Rs. 168 crores and has received advance of Rs. 148 crores in Old High Denominations/SBN Notes. A sworn statement u/s. 132(4) of the Act, was recorded from Mr. S. Senthil, Advocate, on 08.12.2017, where he had confirmed that the seized MoU's were executed by Smt. V.K. Sasikala, for purchase of property and also paid advances in specified bank notes. A statement from directors of M/s. Bonjour Bonheur Pvt Ltd, Mr. Nagarajan and Mr. Naveen Balaji was also recorded and in response to question no. 7 of their sworn statement dated 07.12.2017, they have stated that out of the agreed sum of Rs. 168 crores, they have received Rs. 148 crores advance in cash and balance amount of Rs. 20 crores towards equity share capital and premium to be paid at the time of transfer of shares. Further, Mr. Naveen Balaji, had also explained how he has appropriated sum of Rs. 148 crores received from the alleged buyer of the property and deposited into bank account of his partnership firm. Similarly, a MoU between M/s. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an three years and hence advance money received in cash by M/s. Bonjour Bonheur Pvt Ltd and its directors has been treated as income from other source u/s. 56(2)(ix) of the Act, as forfeiture of advance money received for sale of property. Similarly, the Assessing Officer had also made additions towards advance money received by the directors of M/s. Senthil Paper and Boards Pvt Ltd, as per MoU dated 22.11.2016, amounting to Rs. 400 crores as per their shareholding ratio as for feature of advance u/s. 56(2)(ix) of the Act. The Assessing Officer had also made additions of Rs. 400 crores in the hands of M/s. Senthil Paper and Boards Pvt Ltd, on protective basis as forfeiture of advance to protect the interest of the revenue. Similarly, the Assessing Officer has made various other additions including unexplained money u/s. 69A of the Act, in the hands of the directors, which is offshoot at transactions of advance received by the companies and directors for sale of assets. Further, in the group case of M/s. Pondicherry Sri Lakshmi Jewellery, the Assessing Officer after considering the arguments of the assessee opined that, out of Rs. 148 crores advance received in cash towards transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer and question of for feature of advance and taxing u/s. 56(2)(ix) of the Act, does not arise, because the conditions prescribed u/s. 56(2)(ix) of the Act are not satisfied. He further submitted that, as per the MoU, the buyer name is kept blank, but the department has considered Smt. V.K. Sasikala as buyer, on the basis of statement of Mr. S. Senthil, Advocate, who drafted the MoU and the admission of the assesses. But, Smt. V.K. Sasikala denied having entered into MoU between the appellants' company and the directors and herself for purchase of property. She also denied having paid any advance in cash. He further submitted that, the department has made additions towards cash payment in specified bank notes for purchase of property from the appellants' in the hands of Smt. V.K. Sasikala, as unexplained money and appeals filed by her and their associates are pending before the ld. CIT(A). Since, the appellants' claimed to have received advance in cash and the other party denies having paid any advance, these appeals needs to be heard together at the level of first appellate authority. Therefore, he submitted that these appeals may be set aside to the file of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, he has rightly sustained additions in the hands of directors and deleted protective additions made in the hands of the company and their order should be upheld. 9. The ld. DR, Shri. R. Clement Ramesh Kumar, CIT, submitted that there is no dispute with regard to seizure of MoUs during the course of search which suggests agreement for sale of property by M/s. Bonjour Bonheur Pvt Ltd and M/s. Senthil Paper and Boards Pvt Ltd. It is also an admitted fact that in the MoU, buyer name was kept blank. He further submitted that, Smt. V.K. Sasikala denied having paid any advance in her statement recorded u/s. 132(4) of the Act. Therefore, the Assessing Officer has rightly treated advance received by M/s. Bonjour Bonheur Pvt Ltd and their directors and M/s. Senthil Paper and Boards Pvt Ltd and their directors as forfeiture of advance received towards transfer of property because of failed negotiation. The ld. DR, further submitted that the additions made in the hands of Smt. V.K. Sasikala and pending appeals before the first appellate authority is although having bearing on these appeals, but these appeals can be independently decided. Therefore, he submitted that there is no need to set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In light of above factual background, if you examine the additions made by the Assessing Officer towards forfeiture of advance u/s. 56(2)(ix) of the Act, under the head income from other source, one has to understand the MoU between the parties and consequential statement taken from various parties during the course of search, alleged MoU between the appellants' being sellers of the properties and the alleged buyer of the property Smt. V.K. Sasikala ( as per MoU buyer is kept blank) is only a conclusion drawn by the Assessing Officer, on the basis of statements recorded from appellant and their directors and Mr. S. Senthil, Advocate, who claims to have drafted MoUas per the instructions of Smt. V.K. Sasikala. Otherwise, as claimed by both the parties, Smt. V.K. Sasikaladenied having entered into any MoU with the appellants and the companies for purchase of assets and also denied having paid any advance in cash in specified bank notes during demonetization period. The Assessing Officer, has made additions towards advance received by the appellants as forfeiture of advance in the course of negotiation for transfer of capital asset and same is forfeited for failed negotiation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are of the considered view, that these appeals cannot be independently decided, because the issues involved in these appeals are inextricably linked to additions made by the department in the hands of the Smt. V.K. Sasikala, the alleged buyer of the property and their associates. Thus, we set aside the orders of the ld. CIT(A) in all these cases and restore the issues to the file of the first appellate authority and direct the first appellate authority to decide these appeals along with other connected appeals pending before the first appellate authority in the group cases of Smt. V.K. Sasikala and others and decide the issues afresh in accordance with law, after providing reasonable opportunity of hearing to the parties including cross examination, if any necessary to ascertain the correct facts with regard to the transactions in light of contradictory statements given by the appellants, sellers of the property, and the alleged buyer of the property Smt. V.K. Sasikala. All issues involved in these appeals are kept open for adjudication afresh, including any other issues which is off shoot of the main issue, as considered by the Assessing Officer and the ld. CIT(A). In other word ..... X X X X Extracts X X X X X X X X Extracts X X X X
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