TaxTMI 
TaxTMI 
2015 (7) TMI 372
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....mation by the Deputy Commissioner of Income Tax, Central Circle, Amritsar and to appear before the said officer are also subject matter of challenge. The pleaded case of the petitioner is that it is engaged in the business of rice shelling at village Sandhe Hasham, Zira Road, Ferozepur. The company has two directors and 11 share holders closely related to each other. One of the family members of the Directors had sold certain portion of its land about 3-4 years back to the Narula Group of Companies (in short 'NGC'), who had set up a solvent plant by the name of Sat Kartar Solvex Pvt. Ltd. and the petitioner company is running a rice sheller and the said solvent plant had no similarity of business which was located adjoining the business premises of the petitioner-company. However, due to shortage of space, 31,589 bags of paddy had been stocked in the premises of M/s. Sat Kartar Solvex Pvt. Ltd. The rice bran, which is one of the by-products of the shelling, is also sold to the said company as a normal business transaction and there was otherwise no similarity or relationship with the NGC, who were not residents of Ferozepur. On 05.12.2013, search and seizure operation....
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....vt. Ltd. at that moment. It cannot lead to any business relation/connection calling certralization of RSG Foods Pvt. Ltd. alongwith M/s. Satkartar Solvex Pvt. Ltd. 2 The statement of Sh. Ravi Narula (Director in Narula Group) and Sh. Pankaj Garg (family member of Director of M/s RSG Foods Pvt. Ltd.) were recorded and they both admitted that no lease money or rent is being paid by the concern M/s RSG Foods Pvt. Ltd to M/s Sarkartar Solvex Pvt. Ltd. for utilizing the space provided by the concern M/s Satkartar Solvex Pvt. Ltd. to M/s RSG Foods Pvt. Ltd. Thus it is clear that the stock of Paddy was not lying there due to landlordtenant relation but due to close business relations between these concerns. That, M/s RSG Foods Pvt. Ltd. is not related/connected even remotely with the said group Le. M/s Narula Foods Pvt. Ltd. And M/s Satkartar Solvex Pvt. Ltd and the lease agreement was not there because the storage was made for just a few days. Also, it is a normal business practise not to enter into as agreement for such a short period. It cannot lead to any business relation/connected-calling centralization of RSG Foods Pvt. Ltd alongwith M/s Satkartar Solvex Pvt Ltd. 3 A....
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....ans from the said group or vice/versa. v) That, it is further evidenced from the bank loan raised by our Company, in which there is no documentation/guarantee by the said group/family members of that Group of cases. In the written statement filed, it has been pleaded that there was no prejudice caused to the petitioner as it has only to appear before the Assessing Officer at Amritsar which is equidistantly placed from Bathinda. The petitioner was not a person of such small means as to be adversely affected and the determining factor was that land had been transferred to the NGC by the Directors and an opportunity of hearing was given after taking into consideration all the objections of the petitioner. Counsel for the petitioner has submitted that no valid reasons as such have been given for transferring the case and the order is not sustainable whereas, counsel for the revenue, on the other hand, had defended the said order and said that the detailed reasons have been mentioned and a well reasoned and speaking order has been passed, which is liable to be upheld. Section 127 of the Act provides the power to transfer cases after giving the assessee reasonable opportunity of....
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....o a conclusion that the jurisdiction of the assessment proceedings had to be transferred to Amritsar. No finding had been recorded that the Directors of the petitioner-company were also Directors in the NGC and that there were large number of transactions inter se vide which the tax had been evaded and that the petitioner was a key associate. Merely because the parties were doing business in the normal course inter se, would not be a ground as such to transfer the assessment in the absence of any major financial nexus, as such, a ground would result in transferring other assessments of assessees who were doing business with the NCG. The reasoning, thus, which has been resorted to by respondent no. 1 cannot be held to be justified in any manner as the serious rights of the petitioner are involved as assessment is to be transferred for all purposes to a far off place to its detriment. In similar circumstances, a Single Bench of this Court in Rajesh Mahajan's case (supra) has held that even if the transferee is one of the Directors, it was not a valid justification for the transfer of income tax proceedings. Firstly, it is essential, that the show-cause notice issued under Section....