Income Tax Appellate Tribunal - Chennai
M.Kiran Kumar, Chennai vs Acit Central Circle-1(4), Chennai on 14 February, 2020
आयकर अपील य अ धकरण, 'सी' यायपीठ, चे नई IN THE INCOME TAX APPELLATE TRIBUNAL , 'C' BENCH, CHENNAI ी महावीर संह, उपा य एवं ी एस जयरामन, लेखा सद य के सम BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER S.P. No. 50/Chny/2020 [In ITA No. 3374/Chny/2019] नधारण वष / Assessment Year : 2015-16 Shri M. Kiran Kumar, The Assistant Commissioner of No.123, Usman Road, vs. Income Tax, T.Nagar, Chennai - 600 017. Central Circle -1(4), Chennai.
PAN: ACHPM 2274E
( ाथक /Petitioner) ( यथ /Respondent)
ाथक क ओर से/Petitioner by : Shri G. Baskar, Advocate
यथ क ओर से/Respondent by : Shri A. Sundara Rajan, Addl.CIT
सुनवाई क तार ख/Date of Hearing : 14.02.2020
घोषणा क तार ख/Date of Pronouncement : 14.02.2020
आदे श /O R D E R
PER MAHAVIR SINGH, VICE PRESIDENT:
By way of this stay application the assessee has requested for stay of outstanding demand of Rs.37,05,16,734/- out of the total demand of Rs.46,30,29,450/-
2 SP No. 50/Chny/2020
2. At the outset, the Ld.Counsel for the assessee stated that the Tribunal has already granted stay in the order i.e., SP No.326/Chny/2019 vide order dated 20.12.2019:
"The assessee has filed this Stay Petition bearing number 326/Chny/2019 arising out of appeal in ITA No. 3374/Chny/2019 for Assessment Year (ay) 2015-16 seeking stay of demand of disputed tax and interest amount aggregating to Rs. 37,05,16,734/- as reflected in Stay Petition filed by assessee with Income Tax Appellate Tribunal, Chennai Benches, Chennai.
2. The back ground of the assessee's case in brief is that the assessee was searched by Revenue u/s 132 of theIncome-tax Act,1961, as part of searches conducted by Revenue against Lalitha Jewellery Group of cases on 02.09.2014 , wherein Residential Premises of the assessee was also searched by Revenue. During the course of search, the assessee made surrender of an amount of Rs. 20,00,00,000/- as undeclared income for the impugned ay: 2015-16 owing to various discrepancies in various documents and material seized by Revenue during the course of search operations relating to his properietory concern of the assessee engaged in purchase and sale of gold jewellery and bullion , as in the view of the assessee the said proprietary concern of the assessee was not professionally managed and also there were gold bullion which he invested in goldsmiths as well loans and advances, which were not declared in its books of accounts . But , while filing return of income pursuant to search which was filed on 14.11.2015, the assessee did not declare the said surrender of income to the tune of Rs. 20 crores for the impugned ay. The authorities below have discussed the issue in details and have , inter-alia, observed that loss in processing of gold was shown at a very high rate by the assessee and also that the assessee cannot retract from his statement voluntarily recoded during search operations. The assessee's counsel has now claimed before the Bench that said surrender of income was made by assessee in the capacity of Managing Director on behalf of Lalitha Jewellery Private Limited and not in his individual capacity. It is explained by learned counsel for the assessee that assessee albeit per-se did not retracted from his statement recorded during search conducted u/s 132 of the 1961 Act but non disclosure of said surrendered income in return of income filed with Revenue for impugned ay pursuant to search can be taken as retraction of the said statement . Thus, it is the claim of the assessee that assessee wants to argue its case on merits albeit return of income was filed almost one year and 2 months post recording of statement in which it is claimed that the 3 SP No. 50/Chny/2020 assessee did not disclosed the surrender income and it tantamounts of retraction which should be accepted. The Revenue authorities have rejected various contentions raised by assessee and have affirmed the additions to the tune of Rs. 20 crores in the hands of the assessee. The second additions to the tune of Rs. 76.19 crores was made by Revenue on the allegations that there was an infringement of provisions of Section 2(22)(e) of the 1961 Act as it is the money of Lalitha Jewellery Mart Private Limited which was advanced to assessee's properitory concern A K Exports through conduits created in between namely Infinity Jewellers and Mariyam Creations wherein sale and purchase of gold jewellery and bullion were routed through these conduit concerns in a manner that credits are allowed to be built by disbursing money by Lalitha Jewellery Mart Private Limited to these sham entities which find its way ultimately into properietory concern of the assessee , namely A K Exports. The assessee is holding more than 10% equity in Lalitha Jewellery Mart Private Limited and hence provisions of Section 2(22)(e) is clearly attracted in view of the authorities below as the money originated from Lalitha Jewellery Mart Private Limited reached properietory concern of the assessee namely A K Exports through circuitous route through sham entities namely Infinity Jewellers and Mariyam Creations. In view of Revenue authorities, it clearly infringed provisions of Section 2(22)(e) of the 1961 Act as both the authorities below have concurrently decided the issue against the assessee which led to additions to the tune of Rs. 76.19 crores in the hands of the assessee by invocation of provisions of Section 2(22)(e) of the 1961 Act. The learned counsel for the assessee placed before the Bench , Balance Sheet of the said Lalitha Jewellery Mart Private Limited which has reserves and surplus to the tune of Rs. 289.29 crores as at 31.03.2015. The learned counsel for the assessee submitted that these transactions were not sham or circuitious transaction of purchase and sale of gold jewellery and bullion but real transactions and it is prayed that the assessee has good case and the assessee be allowed to argue its case at the earliest. The third main addition as was made by Revenue to the tune of Rs. 16.24 crores was towards treating long term capital gain claimed as an exempt by assessee u/s 10(38) of the 1961 Act as bogus/sham by Revenue authorities concurrently which was brought to tax. The authorities below have elaborately discussed after detailed investigation/analysis in their order that the claim of assessee for exemption u/s 10(38) of the 1961 Act arising on alleged purchase and sale of company namely Mahavir Advanced Remedies Limited is bogus/sham . The learned counsel for the assessee submitted that long term capital gains claimed exempt by the assessee was genuine and it is claimed by learned counsel for the assessee that in any case principles of natural justice were not adhered to by Revenue as copy of investigation report was not forwarded to assessee as well cross examination was not allowed to the assessee. It was claimed 4 SP No. 50/Chny/2020 that assessee has good arguable case and the assessee be allowed to argue its case at the earliest. It was also submitted by learned counsel for the assessee that the assessee has already paid Rs. 9,25,12,716 towards outstanding demand of income-tax and interest against the total demand of Rs. 46,30,29,450/- raised by the AO. Thus , it is submitted that around 20% of the demand raised is already paid to Revenue and prayers are made to stay outstanding demand of tax and interest. The learned counsel for the assessee placed before the Bench, the challans for payment of taxes to the tune of Rs. 9.26 crores post assessment framed by the AO , which challans are now placed in the stay petition file. The assessee has however not filed any financial statements / Balance sheet etc before the Bench to prove financial difficulties. The learned DR objected to grant of stay of outstanding demand of income-tax and interest thereon. After hearing both the parties and keeping in view entire factual matrix of the case and as per detailed discussions above, we are inclined to grant early hearing of the appeal in ITA no. 3374/Chny/2019 which is now fixed for hearing before Regular Bench on 13th January 2020"
Further a corrigendum was issued. The Ld.Counsel stated that the matter came up for hearing on 29.01.2020, on which date the hearing was adjourned sinedie, in response to letter seeking adjournment dated 28.01.2020. Now, the Ld.Counsel stated that since stay has already expired, which was up to 13.01.2020, early hearing be granted and in that eventuality, the assessee will not pursue this stay petition. On query from the Bench, the ld. DR has not objected to the proposal put forth by the Ld.AR. Accordingly, we dismiss the Stay Application and fix the appeal for hearing on 25.02.2020. We also make it clear that the assessee should not seek adjournment on the date of hearing. In case, the Revenue seeks adjournment, the entire amount will be stayed automatically. 5 SP No. 50/Chny/2020
3. Since the date of hearing is mentioned in the stay order, the registry may desist from sending notice of hearing to the parties, i.e., this order should also be construed as notice of hearing.
4. In the result, the stay petition of the assessee is rejected in term of the above.
Order pronounced in the open court on 14th February, 2020 at Chennai.
Sd/- Sd/-
( एस जयरामन ) (महावीर संह )
(S. Jayaraman) (Mahavir Singh)
लेखा सद य /Accountant Member उपा य /Vice President
चे नई/Chennai,
दनांक/Dated 14th February, 2020
RSR
आदे श क त ल प अ े षत/Copy to:
1. अपीलाथ /Appellant 2. यथ /Respondent 3. आयकर आयु त (अपील)/CIT(A)
4. आयकर आयु त/CIT 5. वभागीय त न ध/DR 6. गाड फाईल/GF