DEPUTY COMMISSIONER OF INCOME TAX, CHENNAI vs. SAS HOTELS AND ENTERPRISES LIMITED, CHENNAI

ITA 3992/CHNY/2026Status: DisposedITAT Chennai28 September 2026AY 2020-2150 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal condoned the delay in filing the Revenue's appeals, finding sufficient cause for the delay and that it was not attributable to gross negligence or lack of bona fides, thereby advancing the cause of substantial justice. Regarding the substantive issue, the Tribunal upheld the order of the CIT(A) in deleting the additions made by the AO. The Tribunal noted that the CIT(A) had found no direct or independent corroborative evidence for alleged unaccounted cash receipts. The CIT(A) observed the absence of buyer-wise cash receipts, acknowledgements, parallel books, or examination of purchasers. The retracted employee statements and the AO's methodology of using a median selling rate without establishing a direct nexus to individual transactions were also found to be unsustainable. Crucially, the Tribunal found that the very foundation of the additions had been considered and decided by a Coordinate Bench in the case of M/s. Ivar Estates Private Limited (supra). Following the principle of judicial discipline and the decision of the Coordinate Bench, which dealt with identical issues arising from the same search and material, the Tribunal dismissed the Revenue's grounds of appeal. The additions for assessment years 2019-20, 2020-21, and 2021-22 were deleted, and the orders of the CIT(A) were upheld.

What were the facts?

The Revenue filed five appeals against the common order of the CIT(A)-19, Chennai, for assessment years 2017-18 to 2021-22. The appeals were filed with a delay of 20-21 days, which the Tribunal condoned after being satisfied with the reasons provided by the Revenue. The assessee, SAS Hotels and Enterprises Limited, is a real estate developer and hospitality company. A search and seizure operation on November 3, 2023, in the case of M/s. Appaswamy Real Estates Ltd. and its group concerns, including the assessee, led to the reopening of assessments. The Assessing Officer (AO) initiated reassessment proceedings based on material gathered during the search, focusing on alleged cash loans advanced to the Casagrand Group and unaccounted cash collected from customers.

What were the issues?

1. Whether the delay in filing the Revenue's appeals for assessment years 2017-18 to 2021-22 is liable to be condoned under Section 253(1) of the Income-tax Act, 1961, considering the reasons provided by the Revenue. Assessee's arguments: Not recorded. Revenue's arguments: The Revenue sought condonation of delay, explaining the circumstances that occasioned the delay. 2. Whether the additions made by the AO towards alleged undisclosed interest income and unexplained investment in the form of cash loans, based on seized electronic records and employee statements, are sustainable, particularly in light of the assessee's contentions regarding the nature of the documents and statements, and in the absence of independent corroborative evidence, as per Section 69 of the Income-tax Act, 1961. Assessee's arguments: The assessee denied advancing cash loans or receiving interest in cash, stating the only transaction with Casagrand Group was a property deal with banking channel transactions. The Excel sheets were unverified third-party documents ('dumb documents'). The employee's statement was obtained under coercion and retracted. No cash, loan agreements, or other supporting documents were found during the search. Revenue's arguments: The AO contended that the Excel sheets contained systematic and detailed records of cash transactions, not 'dumb documents'. The employee's statement was considered valid, and its subsequent retraction was deemed belated and unacceptable. The AO relied on the seized electronic records, the section 132(4) statement, and book entries to quantify alleged cash loans and interest income.

Which sections of the Income-tax Act were involved?

Section 132,Section 142(1),Section 148,Section 132(4),Section 69,Section 253(1)

AI-generated summary — verify with the full judgment below

Before: SHRI S.S. VISWANETHRA RAVI & SHRI S.R. RAGHUNATHA

Hearing: 03.09.2026Pronounced: 28.09.2026

PER BENCH: These five appeals preferred by the Revenue are directed against the common order dated 16.04.2026 passed by the learned Commissioner of Income Tax (Appeals)–19, Chennai [hereinafter referred to as “the ld.CIT(A)”], arising out of the separate assessment orders passed by the Deputy Com

The order continues below.

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