Tharanipathy Rajkumar Vs ACIT (ITAT Chennai)
ITAT Chennai held that once the cash deposits through circular trading has been declared on collective basis under PMGKY, the same could not be added again in the hands of the individual parties. Accordingly, addition u/s. 69A deleted to the extent declared under PMGKY Scheme.
Facts- The present appeal has been preferred by the assessee. As is evident, the sole grievance of the assessee is confirmation of certain addition u/s 69A against various parties viz. M/s. Sri Sakthi Sai Enterprises, M/s Infant Jesus Foundation (IJF) and M/s Chennai Raj Chit Private Limited (CRCPL).
Conclusion- Held that once the amount has been declared on collective basis under PMGKY, the same could not be added again in the hands of the individual parties and the cognizance of declaration so made by the assessee has to be taken into account. It could be seen that the assessee was managing and controlling various group entities with a view to make cash deposits through circular transactions. If the transaction is taxed once, the circular transactions could not be taxed again and there may not be any direct linkage available with the assessee, in such a scenario. Therefore, the addition of Rs.5.85 Crores pertaining to three parties listed at serial nos. 1 to 3, as sustained in the impugned order, stand deleted since the same has already been offered under PMGKY. The addition of Rs.0.58 Crores as made for cash deposit in the account of IJF with respect to Maheshwari Brothers Coal also stand deleted on same logic. The corresponding grounds of appeal stand allowed.
