DCIT, CHENNAI vs. RADHAKRISHNAN ASHOK, NAMAKKAL

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ITA 2532/CHNY/2025Status: DisposedITAT Chennai11 May 20266 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the substantive addition in the hands of the other person was set aside to the Assessing Officer. Therefore, the present matter was also restored to the Assessing Officer to pass an assessment order based on the outcome of the remand proceedings.

What were the facts?

The Assessing Officer made a protective addition of Rs. 18.89 crores in the hands of the assessee, being 50% of an investment made in shares, as the substantive addition was made in the hands of another person. The CIT(A) deleted this protective addition.

What were the issues?

Whether a protective addition should be deleted when the substantive addition is under appeal and has been set aside for fresh assessment.

Which sections of the Income-tax Act were involved?

Section 69,Section 250,Section 139(1),Section 132,Section 148,Section 143(3),Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CHENNAI BENCHES “B” :: CHENNAI

Before: SHRI GEORGE GEORGE K, VICE- & SHRI INTURI RAMA RAO

For Appellant: Mr. S. Praveenkanth – Advocate
Hearing: 08/04/2026Pronounced: 11/05/2026

आयकर अपीलीय अिधकरण ”बी” �ायपीठ चे�ई म�। IN THE INCOME TAX APPELLATE TRIBUNAL CHENNAI BENCHES “B” :: CHENNAI BEFORE SHRI GEORGE GEORGE K, VICE-PRESIDENT AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.2532/CHNY/2025 �नधा�रण वष� / Assessment Year: 2016-17 Deputy Commissioner of Income Vs Radhakrishnan Ashok, Tax, 4/200, Konur PO, Namakkal Central Circle-1(4), Chennai. Tk, Namakkal Dt, Namakkal – 637207 PAN: AURPA6710C Appellant / Revenue Respondent / Assessee Assessee by Mr. S. Praveenkanth – Advocate Revenue by Mr.Shiva Srinivas – CIT Date of hearing 08/04/2026 Date of pronouncement 11/05/2026 आदेश/ ORDER PER INTURI RAMA RAO, AM : This appeal filed by the Revenue directed against the order of ld.Commissioner of Income Tax(Appeal), Chennai-18 dated 21.07.2025 passed under section 250 of the Income Tax Act, 1961 for the A.Y.2016-17.

2.

The Revenue raised the following grounds of appeal :

ITA No.2532/CHNY/2025 [D] “(i) The Ld.CIT(A) has erred while deleting the protective addition of Rs18.89,00,000/- made by the AO u/s 69 of the Income-tax Act on the grounds that the substantive addition of this amount for AY 2016-17 was partly confirmed by the CIT(A) in the hands of Shri CP Anbunathan vide order in DIN ITBA/APL/S/250/2024-25/1075255101(1) dated 19.03.2025

(ii) The Ld CIT(A) failed to consider the fact that the assessee and the revenue has challenged the order dated 19.03.2025 in ITAT and the decision of the Ld. CIT(A) on the substantive addition in the case of Shri C.P Anbunathan has not reached finality

(iii) The Ld.CIT(A) failed to consider that he ought to have upheld the protective addition made in the hands of the assessee so that, if higher judicial forums are inclined to delete the substantive additions, they would take such a decision on holistic and consolidated basis, having complete regards to all the facts and circumstances of the case, including that of the protective additions made in the hands of the appellant

For these grounds and any other ground including amendment of grounds that may be raised during the course of the appeal proceedings, the order of learned CIT(Appeals) may be set aside and that of the Assessing Officer be restored.”

3.

Briefly the facts of the case are that the respondent assessee is an Individual is engaged in the business of processing and trading it mineral water in the name and style of ‘Pandian Aqua Products’ is also partner in M/s. Vettri Finance and M/s.Vinayaga Finance. The respondent assessee had not filed the original return of income under the provisions of section 139(1) of the Act for the Assessment Year 2016-17. Subsequently, during

ITA No.2532/CHNY/2025 [D] the course of search and seizure operations u/s.132 of the Act were conducted in the case of one Mr.C.P.Anbunathan, it was found that the respondent along with one Mr.G.Ramani invested a sum o fRs.37.78 crores for an acquisition shares of M/s.Hind Mercantile Ltd out of which a sum of Rs.26.4 crores was paid in cash. Since the respondent had not filed the return of income for the A.Y.2016-17, the Assessing Officer formed an opinion that income got escaped assessment from tax. Accordingly, a notice u/s.148 was issued to the respondent on 11.12.2018. In response to notice u/s.148, the respondent filed return of income on 12.11.2019. Against the said return of income, the assessment was completed by the DCIT, Central Circle-1(4), Chennai vide order dated 31.12.2019 passed u/s.143(3) r.w.s 147 of the IT Act, 1961 at a total income of Rs.18,99,45,840/-. While doing so, the Assessing Officer made an addition of Rs.18,89,00,000/- on protective basis being the 50% of sum of Rs.37,78,00,000/- as entire sum of was added on the substantial basis in the hands of one Mr. C.P.Anbunathan. The factual matrix leading to the above addition is extracted by the Assessing Officer vide para 2.3 and 2.4 of the assessment are extracted below : “2.3 The facts of the case are that M/s.VMD Enterprises Pvt. Ltd. Had entered into an agreement of sale on 23.02.2006, with M/s.Hind Mercantile Corporation Pvt. Ltd. for purchase of a land belonging to M/s Hind Mercantile Corporation Pvt. Ltd, measuring 1 acre 14 guntas in Survery No. 30, situated at

ITA No.2532/CHNY/2025 [D] Yeshwanthapura, Bengaluru, Bengaluru North Taluk and bearing No.62/2, 8th Main Road, Malleswaram, Bengaluru, Karnataka and had paid Rs. 1,87,50,000/ Though the entire sale consideration was paid as the ownership of the land was in dispute, registration of sale was not executed in favour of M/s. VMD Enterprises Pvt. Ltd. to the meantime, one Shri. CV. Kumar and his brother Shri. C.V. Srinivasan purchased shares of M/s. Hind Mercantile Corporation Pvt. Ltd on 16.09.2015 and became directors of the company. Due to litigation, M/s. VMD Enterprises Pvt. Ltd. was not in a position to take over the said property and hence decided to cancel the agreement of sale dated 23.02.2006 and executed a Cancellation deed on 24.11.2015. In the meantime, despite knowing that the property was in litigation, Shri. C.P. Anbunathan through his relatives Shri. R. Ashok (the assessee) and Shri. G. Ramani came forward to purchase the said property and paid Rs.37.78 crores (Rs.11.38 crores through cheques and Rs.26.40 crores by cash) to M/s Hind Mercantile Corporation Pvt. Ltd, after which instead of purchasing the land, the shares of M/s. Hind Mercantile Corporation Pvt. Ltd. were transferred in the name of the assessee and Shri G. Ramani from the erstwhile directors, Shri C.V Kumar and Shri CV Srinivasan.

2.4 Vide sworn statement recorded on 07.02.2017. Shri. CV Kumar stated that he transferred his 18.956 shares and his brother Shri. C.V. Srinivasan transferred his 19,031 shares in M/s. Hind Mercantile Corporation Pvt. Ltd. for Rs.23.69,500/- and Rs.23.78, 875/-respectively, to Shri. G. Ramani and to the assessee, the present Directors of M/s. Hind Mercantile Corporation Pvt. Ltd. on 06.01.2016. The said sworn statement was concurred with by Shri. C. V. Srinivasan.”

4.

Based on this information, the Assessing Officer inferred that a sum of Rs.37,78,00,000/- was invested by one Mr. C.P.Anbunathan in the name of the respondent and one Mr.G.Ramani on purchase of property situated at

ITA No.2532/CHNY/2025 [D] Yeshwanthpura, Bengaluru belonging to M/s.Hind Mercantile Private Limited, the entire sum of Rs.37,78,0,000/- was brought to tax in the hands of one such C.P.Anbunathan on substantial basis, however the amount of investment made in the name of the respondent being 50% of Rs.37,78,00,000/- was also made addition on protective basis in the hands of the respondent assessee.

5.

Being aggrieved by the above assessment order, an appeal was filed before the ld.CIT(A), who vide impugned order directed the Assessing Officer to delete the protective addition made in the hands of the respondent since ld.CIT(A) had confirmed the substantive addition made in the hands of one Mr. C.P.Anbunathan of Rs.39.78 crores.

6.

Being aggrieved, the Revenue is in appeal before us in the present appeal. It is brought to our notice during the course of hearing of appeal before us that in the case of appeal preferred by Mr. C.P.Anbunathan, the matters were set-aside to the file of the Assessing Officer by this Tribunal in ITA No.1488 & 1489/CHNY/2025 vide order dated 23.01.2026, therefore, the present matter also restored to the file of the Assessing Officer to pass the assessment order based on the outcome of the remand assessment proceedings in the case of Mr.C.P.Anbunathan.

ITA No.2532/CHNY/2025 [D]

7.

Accordingly, appeal filed by the Revenue stands partly allowed for statistical purpose. Order pronounced in the open Court on 11th May, 2026.

Sd/- Sd/- (GEORGE GEORGE K) (INTURI RAMA RAO) VICE PRESIDENT ACCOUNTANT MEMBER Chennai; �दनांक / Dated : 11th May, 2026 SGR, Sr.PS आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT Chennai/Madurai/Coimbatore/Salem. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “बी” ब�च, 4. चे�नई / DR, ITAT Chennai. गाड� फ़ाइल / Guard File. 5.

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