DCIT Vs SAS Hotels and Enterprises Limited (ITAT Chennai)
A Spreadsheet Entry Is Not a Cash Loan: ITAT Deletes Additions Against SAS Hotels
The dispute
A search of the Appaswamy Group led the Assessing Officer (AO) to make two sets of additions against SAS Hotels and Enterprises Limited. The first concerned alleged cash loans or receipts involving the Casagrand Group and presumed interest on those transactions. The second concerned alleged unaccounted cash from apartment sales. The Commissioner of Income Tax (Appeals) deleted both sets of additions. In a consolidated order covering assessment years 2017–18 to 2021–22, the Chennai ITAT dismissed all five Revenue appeals.
The third-party spreadsheet
The cash-loan allegation rested chiefly on Excel files in a pen drive seized from the residence of P. Ramji, a Casagrand employee, along with a statement from an Appaswamy employee that was later retracted. The AO treated spreadsheet entries as evidence of transactions involving SAS Hotels and added a total of ₹24.19 crore across four assessment years. He also added ₹73.50 lakh as alleged interest income across three years.
SAS Hotels pointed to a documented transaction that gave the entries a different context. It had received ₹12.50 crore through banking channels as an advance relating to a commercial property on TTK Road and refunded it when the transaction was cancelled. The AO had interpreted a spreadsheet notation of ₹50 lakh described as “cash conversion” as a cash transaction, although the corresponding entry in the company’s bank ledger related to the property advance.
