ASSISTANT COMMISSIONER OF INCOME TAX CORPORATE CIRCLE 1 1, CHENNAI vs. IL & FS TAMILNADU POWER COMPANY LTD, CHENNAI

ITA 2867/CHNY/2026Status: DisposedITAT Chennai23 September 2026AY 2011-123 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) erred in ignoring the evidential value of the statement and surrounding circumstances that established the payment of on-money in the transaction. It was also found that the CIT(A) failed to appreciate the substantial funds routed through the intermediary concern, M/s. Dawn Infrastructure Pvt. Ltd., for land acquisition, and the explanation provided by the assessee remained unsubstantiated. The Tribunal further held that the CIT(A) erred in concluding that the non-applicability of Section 50C of the Act would negate an addition under Section 69 of the Act, as these sections operate independently. The CIT(A) had also ignored the corroborative evidentiary value of the bank statements of Shri N. Natarajan, which evidenced cash deposits corresponding to the land transaction. Consequently, the Tribunal found the CIT(A)'s order to be unjustified and requiring fresh consideration. The matter was remanded to the file of the CIT(A) for fresh adjudication.

What were the facts?

The Revenue filed an appeal before the Income Tax Appellate Tribunal (ITAT) challenging an order passed by the Commissioner of Income Tax (Appeals) for the assessment year 2011-12. The appeal was filed with a delay of 15 days, which the Tribunal condoned upon the Revenue's submission of a petition and affidavit. The assessee, IL & FS Tamil Nadu Power Company Limited, was absent and did not seek an adjournment. The ITAT proceeded to hear the appeal based on the material on record and the submissions made by the Revenue.

What were the issues?

1. Whether the CIT(A) erred in ignoring the evidential value of the statement and surrounding circumstances establishing the payment of on-money in the transaction, thereby failing to appreciate the substantial funds routed through an intermediary concern, M/s. Dawn Infrastructure Pvt. Ltd., towards land acquisition activities, where the explanation offered by the assessee remained unsubstantiated? (Question of law and fact, concerning Sections 69 and potentially Section 50C of the Income Tax Act, 1961). Assessee's Arguments: Not recorded. Revenue's Arguments: The CIT(A) erred in ignoring the evidential value of statements and surrounding circumstances related to on-money payments. The CIT(A) failed to appreciate the funds routed through M/s. Dawn Infrastructure Pvt. Ltd. for land acquisition, and the assessee's explanation was unsubstantiated. The CIT(A) erred in holding that the non-applicability of Section 50C negated an addition under Section 69, failing to appreciate that these sections operate independently. The CIT(A) ignored the corroborative evidentiary value of bank statements of Shri N. Natarajan, which evidenced cash deposits corresponding to the land transaction.

Which sections of the Income-tax Act were involved?

Section 50C,Section 69

AI-generated summary — verify with the full judgment below

Before: SHRI. INTURI RAMA RAO & BEFORE SHRI S.S. VISWANETHRA RAVI

Hearing: 09.09.2026Pronounced: 23.09.2026

PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:

This appeal filed by the Revenue is directed against the order dated 13.02.2026 passed by the ld. Commissioner of Income Tax (Appeals), for the assessment year 2011-12. 2. We find this appeal was filed with a delay of 15 days. The Revenue filed an affidavit and petition to condone the said delay. Upon hearing both the parties and on perusal of the affidavit and petit

The order continues below.

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