Madras HC permits I-T dept to assess income of film financier

The Madras High Court today permitted the Income Tax department to proceed with assessment of income of film financier G N Anbuchezhian with regard to about Rs 357 crore worth materials seized in a raid in 2015 but directed it not to pass the final order.
A division bench comprising justices S Manikumar and V Bhavani Subbaroyan gave the interim order on an appeal by Anbuchezhian challenging the dismissal of his petition against an I-T settlement commission order by a single judge bench.
The bench said the assistant commissioner of Income Tax, Central Circle 2, here can proceed with the assessment but should not pass the final order.

The I-T settlement commission had rejected the claim of Anbuchezhian in two settlement applications with regard to the the seized materials worth about Rs 357 crore, holding that it lacked "trueness and fullness".
According to the appellant, the I-T department conducted searches in his offices and residential premises in Chennai and Madurai for two days from September 30, 2015.
During the searches, materials and cash to the tune of Rs 67 lakh were seized.

Later, he admitted to undisclosed income of Rs 25.10 crore over and above the income Rs 5.91 crore declared for the assessment years 2010-11 to 2015-16.

For the assessment year 2016-17, he filed original return on December 15, 2016 declaring a total income of Rs 4 crore.
Thereafter, he preferred an application before the Settlement Commission on July 23, 2017 to settle the issues.
The application was rejected by an August 10 order by the commission which held that it lacked "trueness and fullness" and that he had reduced the quantum of transactions as per the seized material from Rs 357 crore to Rs 175 crore, he added.
The financier also submitted that he had paid an additional tax of Rs 13.31 crore for the relevant assessment years, which were covered in the settlement application.

He then filed a second settlement application on December 26 last to settle three issues including grant of immunity from all penalties and prosecution and capitalisation of the undisclosed income. This was also rejected on January 5.
Senior counsel Vijay Narayan, appearing for the appellant, contended that the commission had not applied its mind properly while rejecting the application.
The application had been made under the IT Act by declaring full and true particulars of the income, he claimed.