DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1(4), CHENNAI, CHENNAI vs. GOVINDASAMY RAMANI, CHENNAI

The Revenue raised the following grounds of appeal : “(1) The Ld.CIT(A) has erred while deleting the protective addition of Rs.8,89,00,000/- 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

Briefly the facts of the case are that the respondent assessee is an Individual is engaged in the business of lorry transport, besides being a partner in M/s.Ponkaliamman Investment. For the assessment year under consideration, appellant was also Director in M/s. Hind Mercantile Corporation Private Limited and M/s. Glad Shine Infrastructure Private Limited.

The respondent assessee filed the original return of income under the provisions of section 139(1) of the Act on 12.06.2017 for the Assessment Year 2016-17 disclosing income at Rs.2,86,840/-. Subsequently, during the course of search and seizure operations u/s.132 of the Act were conducted in the case of one Shri C.P.Anbunathan at his premises at No.104, Orathai Road Byepass, Ayyampalayam, Thottakurichi Post, Karur on 22.04.2016, certain books of accounts were found and seized on 23.04.2016. It was found on the examination of the seized material that a total sum of Rs.39,78,00,000/- was paid to one Shri Vetri Duraisamy, Director of M/s.VMD Enterprises Ltd, Chennai on various dates. 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. And also, a notice u/s.142(1) of the Act dated 04.12.2019 was issued to the assessee calling for certain details/information, followed by a show cause notice dated 12.122.2019. In response to notice u/s.148, the respondent filed return of income on 16.12.2019. 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 Income Tax Act, 1961 at a total income of Rs.18,91,79,580/-. While doing so, the Assessing Officer made an addition of Rs.18,89,00,000/- being unexplained investment u/s.69 of the Act.

The factual matrix leading to the above addition is extracted by the Assessing Officer vide para 6.4 and 7 of the assessment are extracted below : “6.4 In view of the above, it is seen that the sum of Rs.37,78,00,000/- was brought in by Shri. C. P. Anbunathan and he has used the names of the assessee and Shri. R. Ashok. Further it is pertinent to note that during the course of search, Shri C P. Anbunathan disclosed a sum of of Rs.30,98,00,000/- for taxation, as his unexplained investment in Yeshwanthpura land but has not included the same in his Return of Income filed for the A.Y. 2016-17. The said sum of Rs.37,78,00,000/ has been brought in by Shri. C. P. Anbunathan and hence the same is being brought to tax in his hands for the A.Y 2016-17 However, as the assessee Shri. G. Ramani alongwith Shri. R. Ashok has brought in the sum Rs.37,78,00,000/- for transfer of shares of M/s. Hind Mercantile Corporation Pvt. Ltd. to their names, the sum of Rs.18,89,00,000/- (37,78,00,000 /2) is added to the total income of the assessee as Unexplained investment u/s 69 of the Income Tax Act, 1961 as a protective measure, the substantial addition being made in the hands of Shri. C. P Anbunathan for the A.Y. 2016-17.

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.

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.

Accordingly, appeal filed by the Revenue stands partly allowed for statistical purpose. Order pronounced in the open Court on 29th May, 2026.