Sakthi Realty Holdings Ltd. Vs DCIT (ITAT Chennai)
The Income Tax Appellate Tribunal (ITAT) Chennai addressed appeals by two assessees concerning assessments for the 2014-15 and 2015-16 assessment years. The primary issue was the addition of Rs. 66 Lacs as unexplained income by the Assessing Officer (AO). The assessee, a real estate company, faced scrutiny following a search in 2016. The AO’s addition was based on statements and a notebook seized from the General Manager of Sakthi Finance Financial Services Ltd. (SFFSL). This material indicated that the assessee-group was allegedly taking cash deposits from customers, issuing non-convertible debentures (NCDs), and not recording a portion of these transactions in their regular books.
Statements from several individuals, including the General Manager, President-Operations, Senior Manager-Accounts, AGM (Finance and Accounts), and a Director, confirmed that cash deposits were received from customers and not accounted for. The AO concluded that these deposits, totaling Rs. 210.10 Lacs, were intended for land purchases. Half of this amount (Rs. 66 Lacs) was added as unaccounted income for the 2014-15 assessment year, and a portion of the remaining amount was added for the 2015-16 assessment year. The Commissioner of Income Tax (Appeals) upheld the AO’s decision, stating that the assessee failed to substantiate its claim that the amounts were land advances.
