The Commissioner Of Income Tax,Chennai v. Shri C.s.srivatsan

IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated: 01.02.2013 Coram The Honourable Mr.JUSTICE N.PAUL VASANTHAKUMARandThe Honourable Mrs.JUSTICE S.VIMALA Tax Case (Appeal) Nos.48 to 71 of 2007 The Commissioner of Income Tax,Chennai... Appellant in all Tax Cases Vs. Shri C.S.Srivatsan ... Respondent in T.C.Nos.48, 49, 50, 51, 52, 53 of 2007 Shri C.S.Seshadri... Respondent in T.C.Nos.54, 55, 56, 57, 58, 59 of 2007 Shri C.S.Varadahan... Respondent in T.C.Nos.60, 61, 62, 63, 64, 65 of 2007 Shri C.S.Narasimhan... Respondent in T.C.Nos.66, 67, 68, 69, 70, 71 of 2007 APPEALS under Section 260A of the Income Tax Act, 1961 againstthe orders of the Income Tax Appellate Tribunal, Madras 'A' Bench,dated 23.06.2006, in ITA Nos.2089/Mds/2005, 2090/Mds/2005,2091/Mds/2005,2092/Mds/2005,2093/Mds/2005,2094/Mds/2005,2095/Mds/2005,2096/Mds/2005,2097/Mds/2005,2098/Mds/2005,2099/Mds/2005,2100/Mds/2005,2101/Mds/2005,2102/Mds/2005,2103/Mds/2005,2104/Mds/2005,2105/Mds/2005,2106/Mds/2005,2107/Mds/2005,2108/Mds/2005,2109/Mds/2005,2110/Mds/2005,2111/Mds/2005, 2112/Mds/2005, respectively against the order of theCommissioner of Income Tax (Appeals) VIII, 121 Mahatma Gandhi Road,Chennai -600 034 in ITA Nos.37 to 42, 31 to 36,43 to 48,25 to 30 forassessment year 2004-2005 respectively dated 28.6.2005,23.6.2005,28.6.2005,28.6.2005 respectively against the order of the IncomeTax Officer Company Ward I(1) Income Tax Department, Chennai andmade in G.I.No/PAN No.ARPPs 4648N (6 cases) ARPP 4694 C (6 cases),ACPPV 955 OR (6 cases) ACQPN 2763/D (6 cases) respectively dated26.3.2004. For Appellant in all Tax Cases For Respondent in all Tax Cases : Mr. T.Ravikumar: Mr. R.Vijayaraghavan, for, M/s.Subbaraya Aiyar- - - C O M M O N J U D G M E N T S.Vimala, J., These 24 Tax Case Appeals have been filed by the Revenue,aggrieved over the orders passed by the Income Tax AppellateTribunal, covering the assessment years 1996-1997, 1997-1998, 1998-1999, 1999-2000, 2000-2001 and 2001-2002, assessment having beenmade against each of the Directors, namely, C.S.Narasimhan,C.S.Srivatsan, C.S.Seshadri and C.S.Varadhan, (who are brothers),raising the following common substantial questions of law:- "(i) Whether on the facts and circumstances of thecase, the Tribunal was right in holding that the amountspaid by the company towards personal expenses of theassessee cannot be taxed in its hands under Section 2 (24)(iv) as the amount was routed through the franchisee,which was the HUF of the assessee?(ii) Whether on the facts and circumstances of thecase, the Tribunal was right in remanding the matter backto the assessing officer on the issue of receipt ofcommission, when the entity which is supposed to havereceived the commission was formed only after the surveywas conducted?" 1.1. The details of each of the appeals filed are as follows:- 2. The assessees in each of the batch of six cases are,C.S.Narasimhan, C.S.Srivatsan, C.S.Seshadri and C.S.Varadhan, whoare the Directors of the Company, named, 'M/s. C.R.S. Sons & Co.,Limited'. The company is engaged in the business of retail-sellingof silk sarees and other textiles. The said company makes allpurchases from M/s.Sri Sundaravalli Collections (SSVC), which is anentity of Hindu Undivided Family (HUF) of two of the Directors ofthe company. M/s.Sri Sundaravalli Collections pays guaranteecommission to CRS holdings, an entity in which all the four brothersare partners, representing their minor HUFs. 2.1. The company 'M/s. C.R.S. Sons & Co., Limited' effects itssale through franchisees, which was owned by different HUFs. Theseare, (i) Srinivas Silk House,- C.S.Srivathsan (Minor HUF)(ii) Srinivas Silks & Sarees- C.S.Seshadri (Minor HUF)(iii) Srinivas Silks- C.S.Narasimhan (Minor HUF)(iv) Hayagrivas Silk House- C.S.Varadan & C.N.Rangan (HUF)(v) Hayagrivas Silks- C.S.Varadan (Kartha), & - C.V.Srinivas Vinayak (Co- parcener)(vi) Balaji Silks- C.S.Narasimhan (Co-parcener) 2.1. The company 'M/s. C.R.S. Sons & Co., Limited' effects itssale through franchisees, which was owned by different HUFs. Theseare, (i) Srinivas Silk House,- C.S.Srivathsan (Minor HUF)(ii) Srinivas Silks & Sarees- C.S.Seshadri (Minor HUF)(iii) Srinivas Silks- C.S.Narasimhan (Minor HUF)(iv) Hayagrivas Silk House- C.S.Varadan & C.N.Rangan (HUF)(v) Hayagrivas Silks- C.S.Varadan (Kartha), & - C.V.Srinivas Vinayak (Co- parcener)(vi) Balaji Silks- C.S.Narasimhan (Co-parcener) 2.2. These franchisees are paid franchisee commissions for thesales effected by them. 2.3. A survey was conducted in 'M/s.C.R.S. Sons & Co., Limited'under Section 133A of the Income Tax Act, 1961, (hereinafter will bereferred to as "the Act"). During survey, the assessees admittedthat commissions were received by the Directors from M/s.SriSundaravalli Collections (SSVC), which is the purchasing arm of thecompany. 2.4. Notices under Section 148 of the Act were issued inrespect of the assessment years 1996-1997 to 2001-2002. Theassessees filed 'nil' returns. The Assessing Officer treated thepersonal expenses of the assessees and their family members(Franchisee commission paid to different HUF) paid by the company asthe income of the Directors, by invoking the provisions of Section 2(24)(iv) of the Act. The Commissions received from SSVC were alsobrought to tax in their hands for the assessment years 2000-2001 and2001-2002. 2.5. Aggrieved over the assessments, the assessees filedappeals before the Commissioner of Income Tax (Appeals). The CIT(A) held that since the company had not claimed the amounts paid forpersonal expenses of the assessees, the same cannot be treated asincome in the hands of its Directors. So far as commission from SSVC is concerned, it was held that although the assessees admittedthe same by way of a letter, yet later on it was retracted, thecommissions could not be assessed in the hands of the Directors (asthere was no other evidence excepting the retracted letter). 2.6. The Revenue took up the matters in appeals to the IncomeTax Appellate Tribunal. The Tribunal held that the personalexpenses met out of the company's money cannot be treated as incomein the hands of the assessees under Section 2(24)(iv) of the Act, asthe money had not been paid directly to them, but to thefranchisees, which their HUF owned. 2.7. So far as the receipt of commissions from SSVC isconcerned, the Tribunal ordered remand of the matters to theAssessing Officer as there was no clarity in the payment / mode ofpayment of commissions. When the assessees claimed that thecommissions were paid to CRS Holdings, the CIT (A) gave a findingthat no commissions were paid. Because of this disparity in thefactual aspect in the payment of commissions, the Tribunal orderedremand of the matters. 2.8. Aggrieved over the orders passed by the Income TaxAppellate Tribunal, the Revenue has preferred these Tax CaseAppeals. 3. The main contention of the learned counsel for the Revenue /appellant is that when the factum of each of the Directors, havingreceived benefit towards the personal expenses, is not disputed, itis irrelevant and immaterial that the company has not claimed theamount as an expenditure in the profit and loss account of thecompany. When the payment of expenses is admitted, through whom itis paid is also irrelevant, i.e., whether such expenses weredirectly paid by the company or through franchisee (amount debitedto the account of the franchisee). 2.8. Aggrieved over the orders passed by the Income TaxAppellate Tribunal, the Revenue has preferred these Tax CaseAppeals. 3. The main contention of the learned counsel for the Revenue /appellant is that when the factum of each of the Directors, havingreceived benefit towards the personal expenses, is not disputed, itis irrelevant and immaterial that the company has not claimed theamount as an expenditure in the profit and loss account of thecompany. When the payment of expenses is admitted, through whom itis paid is also irrelevant, i.e., whether such expenses weredirectly paid by the company or through franchisee (amount debitedto the account of the franchisee). 3.1. The second contention of the learned counsel for theRevenue / appellant is that the Income Tax Appellate Tribunal,instead of looking into the contents of the transaction, has chosento look into the form of the transaction and the Tribunal ought tohave found that the company has simply used the medium of HUF of theDirectors in whose name the franchisee stood, to make paymenttowards their personal expenses and therefore, the Tribunal ought tohave upheld the orders of the Assessing Officer. 3.2. In support of the contention, the learned counsel for theRevenue relied upon the following decisions, which aredistinguishable on facts:- (I). 261 ITR 358 (K. Ramasamy Vs. Commissioner of Income Tax):- https://hcservices.ecourts.gov.in/hcservices/ "Income – Capital or Revenue Receipt – Firm composedof Four Brothers – Company Formed with Four Brothers asShareholders – Company Taking Business of Firm on Lease –Compensation paid to brothers for not engaging in similarBusiness – Corporate Veil can be Pierced – AmountAssessable as Revenue Receipt – Income Tax Act, 1961. Income Tax – General Principles – Company – CorporateVeil can be pierced in Exceptional circumstances. In cases where the same persons enter intotransactions though by introducing a corporate personalityinto some of those transactions, the income taxauthorities are entitled to pierce the veil of thecorporate personality and look at the reality of thetransaction. (II) 129 ITR 597 (Commissioner of Income Tax, Madras Vs.S.S.M.Lingappan (And Other cases):- "Held, (i) that even if a benefit had been conferredon the director unilaterally without the aid of anyagreement between the parties, the benefit could be taxedas a perquisite under s. 17 (iii) and (iv); (ii) that in view of the difference in approach between thedisallowance in the hands of the company and the assessmentin the hands of the recipient of the benefit, it would benecessary for the Tribunal to look at the question whetherthere was any benefit obtained by the assessee from theproper standpoint and to consider the matter afresh in thelight of the decision in CIT v. P.R. Ramakrishnan (1980)124 ITR 545 (Mad). III. (2007) 295 ITR 33 (Mad) (1. Ravi Prakash Khemka, 2. RajKumar Khemka, 3. Thirupathy Kumar Khemka Vs. Commissioner of IncomeTax):- "Income – Company – Perquisite to Director – PersonalExpenses on Credit card of Director – Payment by Company –LIC Premium paid by Company – Assessable as income ofDirector – Income Tax Act, 1961, s. 2 (24) (iv).On the question of addition by invoking section 2(24) (iv) of the Act, learned counsel for the assesseescould not deny the fact that the companies are all groupconcerns. Natural Energy Processing Company was a defunctfirm. There are no materials to show that there was anykind of business activity carried on by the said firm andthat the purpose of payments are to meet the expenses ofthese directors. Consequently, the payment through this III. (2007) 295 ITR 33 (Mad) (1. Ravi Prakash Khemka, 2. RajKumar Khemka, 3. Thirupathy Kumar Khemka Vs. Commissioner of IncomeTax):- "Income – Company – Perquisite to Director – PersonalExpenses on Credit card of Director – Payment by Company –LIC Premium paid by Company – Assessable as income ofDirector – Income Tax Act, 1961, s. 2 (24) (iv).On the question of addition by invoking section 2(24) (iv) of the Act, learned counsel for the assesseescould not deny the fact that the companies are all groupconcerns. Natural Energy Processing Company was a defunctfirm. There are no materials to show that there was anykind of business activity carried on by the said firm andthat the purpose of payments are to meet the expenses ofthese directors. Consequently, the payment through this firm is an attempt to circumvent the provisions of theAct. What could not be done directly was sought to beachieved by indirect means. We have gone through the kindof expenses incurred which clearly show that theseexpenses had anything to do with any of the businessactivities, that the paying company was a defunct company,no materials were furnished as regards the activities ofthe firm which necessitated this payment. Considering thenature of the personal expenses of the appellants, we haveno hesitation in confirming the order of the Tribunal. The last question goes on the same footing as regards theother personal expenses." (IV). 238 ITR 70 (Commissioner of Income Tax Vs. Indian ExpressNewspapers (Madurai) P.Ltd.):- "Income Tax – General Principles – Company –Corporate Veil can be Lifted to Determine True Nature of aTransaction. The fact that the money was not paid directly, butwas shown as having been invested in the subsidiarycompany is not decisive of the true character of thetransaction. The mere fact that Ace Investments Ltd., isa distinct legal entity does not by itself establish thatthe purported investment was a genuine investment, whichthe company had made for securing benefits to itself byway of trading or carrying on business through thatsubsidiary. We are concerned with the sum of Rs.10 lakhs,interest on which had been disallowed by the Income-taxOfficer. That sum of Rs.10 lakhs, as noticed earlier waspaid to the Bombay company on the same day on which itwas paid to Ace Investments Ltd. Though Ace Investmentsis purported to charge interest in the first year,subsequently, no interest at all was charged to the Bombaycompany on that sum. It is not the assessee’s case, thatmoney was returned to Ace Investments subsequently withinterest or that the assessee received dividends from outof the investments made by it in Ace Investments Ltd. It is well settled that the corporate veil of acompany can be lifted for the purpose of ascertaining thereal character of a transaction, if that transaction was afraudulent one or was intended to evade payment of tax. While legitimate tax avoidance is always permissible,devices adopted to evade payment of tax, however, are notpermissible though the dividing line is not always easy todraw, such a line does exist. The true character of the It is well settled that the corporate veil of acompany can be lifted for the purpose of ascertaining thereal character of a transaction, if that transaction was afraudulent one or was intended to evade payment of tax. While legitimate tax avoidance is always permissible,devices adopted to evade payment of tax, however, are notpermissible though the dividing line is not always easy todraw, such a line does exist. The true character of the transaction here clearly was one of an advance of Rs.10lakhs by the assessee to the Bombay company for whosebenefit that sum was obviously intended and had only beenchannelled through Ace Investments Private Limited. TheTribunal has failed to notice the facts which had been setout in the draft assessment order in annexure B, and hasalso erred in adopting the wrong approach for the purposeof deciding as to whether the amount disallowed was a sumwhich could properly fall within the ambit of section 36(1)(iii) of the Act. The amount disallowed was the amountpaid on amounts borrowed, but not used for the purpose ofbusiness or profession of the assessee. Rupees 10 lakhsinvested” in Ace Investments Limited being in substanceand reality an amount advanced to the Bombay company forfinancing the construction undertaken by it at Bombay,cannot be said to be an amount which formed part of thecapital borrowed for the purpose of the assessee’sbusiness." (V) 233 ITR 669 (Commissioner of Income Tax Vs. Tara Singh):- "Income – Perquisite – Assessee, Director in Company– Certain Debit balance in Books of Company AgainstAssessee – ITO adding value of benefit as income ofassessee – finding by Tribunal that value of benefit wasnot income within the meaning of Section 2 (24)(iv) – isnot correct in view of decision in Lingappan’s case – Nocontrary view taken by other High Courts – Addition ofvalue of benefit as income of assessee – justified –Income Tax Act, 1961, s. 2(24) (iv). For the assessment years 1974-74 and 1974-75, theIncome tax Officer noticed certain debit balances in theaccounts of the company G, against the assessee and formedan opinion that the assessee, who was one of the directorsof the company, had derived benefit from the companyassessable to tax within the meaning of section 2(24)(iv)of the Income tax Act, 1961, and, accordingly, the valueof the benefit was added to the income of the assessee. The Appellate Assistant Commissioner, on appeal by theassessee, deleted the addition. The Tribunal held thatthe value of benefit derived by the assessee from thecompany was not income within the meaning of section 2(24)(iv) of the Act, On a reference: Held, that the Tribunal was not correct in holdingthat no income within the meaning of section 2 (24) (iv)was assessable in the hands of the assessee." 3.3. So far as the principles enunciated in the above decisions, there cannot be any contra argument. So far as thesecases are concerned, the dispute did not centre around the Directorsand the company alone. But it centres around institutions coveringthe company, its franchisees, the purchasing arm of the company(SSVC) and CRS Holdings. Moreover, the directors also play multipleroles in different capacities in different institutions, namely,Director in M/s.CRS Sons & Company Limited, partners in M/s.CRSHoldings, co-parceners in the Hindu Undivided Family in thefranchisees, etc., Therefore, what is essential to be consideredis, whether the income has been allowed to escape from being taxedor not. It is the finding of the Assessing Officer that during thecourse of survey it was brought to light that the Directors of thecompany had received certain benefits from the company and the valueof such benefits is assessable to tax in the hands of Directors, asper Section 2(24)(iv) of the Act. It is the finding of the Assessing Officer that during thecourse of survey it was brought to light that the Directors of thecompany had received certain benefits from the company and the valueof such benefits is assessable to tax in the hands of Directors, asper Section 2(24)(iv) of the Act. 3.4. During the course of survey under Section 133-A of theAct, it was noted that certain personal expenses, such as, tuitionfees of children, travel expenses of wife and children of theDirectors were paid by the company. With regard to these payments,the contention of the assessees was that it was claimed by thecompany only as franchisee commission and that the amount treated bythe Assessing Officer, as personal expenses of the Directors, havenot been claimed by the company in its profit and loss account. Itwas pointed out that the amounts paid were debited to the account ofrespective franchisees. Under those circumstances, it was contendedthat additions made by the Assessing Officer invoking the provisionsof Section 2(24)(iv) of the Act have to be deleted. 3.5. Section 2(24) (iv) of the Act reads as follows:- "2. Definitions. ... (24). "income" includes - (iv) the value of any benefit or perquisite, whetherconvertible into money or not, obtained from a companyeither by a director or by a person who has a substantialinterest in the company, or by a relative of the directoror such person, and any sum paid by any such company inrespect of any obligation which, but for such payment,would have been payable by the director or other personaforesaid;" 3.6. The Income Tax Appellate Tribunal has taken note of thefollowing aspects and has given the specific findings:- (i) CRS & Sons Co. Ltd., paid franchise commission to variousfirms owned by HUF of Directors https://hcservices.ecourts.gov.in/hcservices/ (ii) This has been done on the basis of agreement entered intowhich were in force. (iii) The payment by CRS & Sons Co. Ltd., on the basis offranchise agreement to various persons cannot be treated as paymentto Directors who have substantial interest in the company andSection 2 (24) (iv) cannot be invoked. (iv) If the receiver of franchise commission has met thepersonal expenses of the Director, it is not the responsibility ofthe company for such act of the receiver of franchise commission. 3.7. The findings rendered by the Income Tax Appellate Tribunaldo not warrant any interference, as it is supported by factualmatrix and legal reasoning. 3.8. Learned counsel for the assessees contended that theassessment pertaining to franchisees and also that of M/s. CRSHoldings have been reopened under Section 148 of the Act andcompleted subsequently and there is absolutely no scope left forevasion of tax and therefore, the Tax Appeals have to be dismissed. 3.9. Moreover, the learned counsel for the assessees hasproduced additional typed set of papers covering, (a) expenditure claimed by CRS & Sons Co. Ltd.,; (b) expenses claimed by M/s.Sundaravalli Collections;(c) profit and loss account for the year which ended31.03.1998, 31.03.1999, 31.03.2000, 31.03.2001 and31.03.2002 relating to CRS & Sons Company Limited, and itsfranchisees, apart from Sundaravalli Collections, thepurchasing arm of the company and CRS Holdings; (d) the assessment orders for the assessment years 1999-2000, 2000-2001 of Srinivasa Silk House and CRS Holdings; to show that income has not escaped from the tax assessments andthis fact is not disputed by the Revenue. 4. Yet another contention of the Revenue / appellant is thatthe Tribunal ought not to have remanded the issue relating toreceipt of commissions from the purchase wing of the Company (SSVC)and failed to see that CRS Holdings, which is supposed to havereceived the commissions, was formed only after the survey. to show that income has not escaped from the tax assessments andthis fact is not disputed by the Revenue. 4. Yet another contention of the Revenue / appellant is thatthe Tribunal ought not to have remanded the issue relating toreceipt of commissions from the purchase wing of the Company (SSVC)and failed to see that CRS Holdings, which is supposed to havereceived the commissions, was formed only after the survey. 4.1. Learned counsel for the assessees / respondents contendedthat the Assessing Officer has made addition of income (fromundisclosed sources) only on the basis of statement alleged to havebeen recorded during survey under Section 133A of the Act and thatany admission made during such statement cannot be made the basisfor such addition. In support of the contention, the following https://hcservices.ecourts.gov.in/hcservices/ decisions are relied upon:- (i) [2008] 300 ITR 157 (Mad.) (CIT vs. S.Khader Khan Son). Inthis decision, it has been held as follows:- "... (iv) the material or information found in thecourse of survey proceeding could not be a basis formaking any addition in the block assessment; and (v) theword "may" used in section 133A(3) (iii) of the Act, viz.,"record the statement of any person which may be usefulfor, or relevant to, any proceeding under this Act" makesit clear that the materials collected and the statementrecorded during the survey under Section 133A are notconclusive piece of evidence by itself." The very same decision also detail the circular relied upon by thelearned counsel for the assessee and it reads thus:- "What is more relevant, in the instant case, is thatthe attention of the Commissioner and the Tribunal wasrightly invited to the circular of the Central Board ofDirect Taxes dated March 10, 2003, with regard to theconfession of additional income during the course ofsearch and seizure and survey operations. The saidcircular dated March 10, 2003, reads as follows:-Instances have come to the notice of the Board whereassessees have claimed that they have been forced toconfess the undisclosed income during the course of thesearch and seizure and survey operations. Suchconfessions, if not based upon credible evidence, arelater retracted by the concerned assessees while filingreturns of income. In these circumstances, on confessionsduring the course of search and seizure and surveyoperations do not serve any useful purpose. It is,therefore, advised that there should be focus andconcentration on collection of evidence of income whichleads to information on what has not been disclosed or isnot likely to be disclosed before the Income-TaxDepartment. Similarly, while recording statement duringthe course of search and seizure and survey operations noattempt should be made to obtain confession as to theundisclosed income. Any action on the contrary shall beviewed adversely." (ii) [2012] 254 CTR (SC) 228 (CIT Vs. S.Khader Khan Son). Inthis decision it has been held as follows:- "Income from undisclosed sources – addition –addition on the basis of statement recorded during survey under S.133A does not empower any IT authority to examineany person on oath and thus, any such statement has noevidentiary value – Therefore, any admission made duringsuch statement cannot, by itself, he made the basis foraddition – In view of the concurrent findings of fact,appeal is dismissed- CIT vs. S.Khader Khan Son (2008) 214CTR (Mad) 589 affirmed. Section 133A does not empower any IT authority toexamine any person on oath and, therefore, any admissionmade in a statement recorded during survey cannot, byitself, be made the basis for addition." (ii) [2012] 254 CTR (SC) 228 (CIT Vs. S.Khader Khan Son). Inthis decision it has been held as follows:- "Income from undisclosed sources – addition –addition on the basis of statement recorded during survey under S.133A does not empower any IT authority to examineany person on oath and thus, any such statement has noevidentiary value – Therefore, any admission made duringsuch statement cannot, by itself, he made the basis foraddition – In view of the concurrent findings of fact,appeal is dismissed- CIT vs. S.Khader Khan Son (2008) 214CTR (Mad) 589 affirmed. Section 133A does not empower any IT authority toexamine any person on oath and, therefore, any admissionmade in a statement recorded during survey cannot, byitself, be made the basis for addition." 4.2. From the legal position, what emerges is that theadmission made during the survey proceedings cannot be the basis formaking any addition of amount which is liable to be taxed. Butthere had been subsequent proceedings under Section 147 of the Act. 4.3. A perusal of the records reveals that the assessees havevarious avathars in various establishments, as pointed out already.The assesses are Directors in the company called 'M/s.C.R.S.Sons &Co. Ltd.,'. They are the partners, representing the Hindu UndividedFamily, so far as 'CRS Holdings' are concerned. Two out of the fourassesses represent the HUF in 'M/s.Sri Sundaravalli Collections',which is the purchasing arm for the M/s.CRS Sons & Co. Ltd., Apartfrom that, they also represent as franchisees (owned by the HUF, ofwhich they are the co-parceners and karthas). 4.4. Each of the unit has different composition. Each unit hasvaried number of members. Under such circumstances, theacceptability of the following finding given by the Income TaxAppellate Tribunal has to be considered. 4.5. So far as the commission from SSVC is concerned, theIncome Tax Appellate Tribunal, ordered remand of the issue on theground that the commission by SSVC was not received by theassessees, but by the HUF of the assessees. The reasoning given bythe Tribunal was that when the assessees claimed that the commissionpayments were made to the CRS Holdings, which is an income taxassessee and whereas, the CIT (A) held that commission was paid toHUF of the assessees and to sort out this contradiction, theTribunal felt it appropriate to remand the matters to the AssessingOfficer. 4.6. The learned counsel for the Revenue submitted that theremand is unwarranted, especially when the institution, namely, CRSHoldings, were brought into existence only after survey. But thefact remains that CRS Holdings is also the income tax assessee. 4.7. It is the contention of the Revenue that CRS Holdings did not file any return of income before the survey and the entirethings were stage managed after survey. 4.8. Only based on this statement of the Revenue, the IncomeTax Appellate Tribunal felt that it is a case to be investigated bythe Assessing Officer. It is also relevant to point out that theassessee in all these cases did not file any return in theirindividual capacity and notices under Section 147 were issued onlyon the ground that they did not file any return disclosing theperquisites and benefits received by them from the company and thatthey are guilty of omission to file the returns. The Income TaxAppellate Tribunal has ordered remand only after considering thenature and circumstances of the transaction and in fact, afterconsidering the modus operandi of the entire group. Learned counselfor the respondent has also filed the assessment order for theassessment year 2000-2001, by way of additional typed set of papers.Under such circumstances, the order of remand made by the Income TaxAppellate Tribunal is perfectly justified. 5. The findings given by the Income Tax Appellate Tribunal didnot warrant any interference, having regard to legal and factualaspects discussed above. 6. In the result, all the Tax Case Appeals are dismissed,confirming the orders of the Income Tax Appellate Tribunal. Nocosts. Sd/ Deputy Registrar(J) /true copy/ To srk Sub Asst.Registrar 1. The Commissioner of Income Tax, Chennai 2. The Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai3.The Commissioner of Income Tax (Appeals) VIII, 121 Mahatma GandhiRoad, Chennai -600 0344.The Income Tax Officer Company Ward I(1) Income Tax Department,Chennai +1cc to Mr.R.Vijaya Raghavan, SR 5991+2ccs to Mr.T.Ravikumar, SR 6001,6002 BS(CO)km/12.2.T.C.(A) Nos.48 to 71 of 2007