TaxTMI 
TaxTMI 
2018 (11) TMI 1616
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....earned Senior Standing Counsel appearing for the Income Tax Department. 3. A search and seizure operation under Section 132 of the Income Tax Act, 1961, was conducted on 18-01-2017, simultaneously at Hyderabad, Bhimavaram and Visakhapatnam in the premises of a group of companies, which we shall refer to for the purpose of convenience as Nexus Feeds Limited Group, and in the residences of its Promoters and Directors, who, apart from being Promoters of certain limited companies, are also partners of certain partnership firms. Pursuant to the search and seizure operation, a proposal was mooted by the Principal Commissioner of Income Tax, for coordinated investigation and correlation. 4. Therefore, as required by Section 127(1) of the Income Tax Act, 1961, an opportunity of being heard was provided to the assessees, through individual letters of different dates. In response to the proposals, the assessees submitted a reply requesting the competent authority, to centralise all cases at Hyderabad, on the ground that the registered offices of the limited companies are located in Hyderabad and that the books of accounts of the companies are also maintained at Hyderabad. 5. However....
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....muneration in cash over and above regular salary for managing all financial affairs of the group companies 6 Sri Goluguri Sri Rama Reddy ACNPS 3547B Individual ITO, W-2, Bhimavaram He is the Director in Nutrient Marine Foods Ltd., Nexus Feeds Ltd., Nancy Industries Ltd., Novelty Reddy & Reddy Motors Pvt. Ltd., Lekhya Motors Pvt. Ltd., Neopride Pharmaceuticals Ltd. Beneficiary of multiple transactions in group companies and has made investments for which sources do not exist 7 Sri Goluguri Nagi Reddy ABCPE 1138L Individual ITO, W-2, Bhimavaram He is the elder brother of Mr. Rama Krishna Reddy, Mr. Srirama Reddy, Mr. Venkata Reddy Unexplained jewellery found & seized 8 Sri Goluguri Venkata Reddy ABKPG 1135F Individual ITO, W-2, Bhimavaram He is the Director in Read Grow Exims Pvt. Ltd., Nexus Feeds Ltd., Nancy Industries Ltd., Novelty Reddy & Reddy Motors Pvt. Ltd., Neopride Pharmaceuticals Ltd. Beneficiary of multiple transactions in group companies and has made investments for which sources do not exist 9 Sri Goluguri Ramakrishna Reddy ACHPR 2816G Individual ITO, W-2, Bhimavaram He is the Director in Nexus Feeds L....
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....imavaram He is one of the Directors in Risely Feeds Pvt. Ltd. Investigation in progress 7. Out of the 17 assessees whose names are listed in the tabulation above, only 5 limited companies, 3 individuals and 2 firms alone have come up with the above writ petitions. While 2 companies have come up with one single writ petition, 2 other companies have come up with another writ petition, the 5th company has come up with 1 writ petition and 3 individuals and 2 firms have come up with 1 writ petition. For the purpose of easy appreciation, persons/companies who are petitioners in the writ petitions and their present place of jurisdiction for assessment, are given in a tabular column as follows:   Names of assesses W.P.No. Present jurisdiction 1.M/s Nexus Feeds Limited, Door No.8-1-301/ 86-87, Plot No.101, Saipriya Residency, Lakshmi Nagar Colony, Hyderabad-500 008, Rep. by its Managing Director Goluguri Sri Rama Reddy 2. M/s Nexus Well Hops Agritech International Ltd., Plot No.62, Survey No.137, Mamatha Nagar Colony, Nagole, Hyderabad-500 068, Rep. by its Director Smt. Goluguri Radha 9147/2018 Hyderabad 1.Goluguri Srirama Reddy S/o Satyanarayana ....
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....ssees in these cases sought centralisation or transfer. Therefore, at least the 3 individuals and 2 partnership firms which are the petitioners in W.P.No.9352 of 2018 cannot really have an objection, as their cases stand transferred only to Rajamahendravaram, in the neighbouring district. Keeping this fact in mind, let us now see the grounds on which the impugned orders of centralisation and transfer are assailed. 9. Mr. Challa Gunaranjan, learned counsel for the petitioners, submitted - (i) that at least in respect of 3 companies, the centralisation and transfer of cases is ordered, from one State to another viz., the State of Telangana to the State of Andhra Pradesh and the same could not have been done without an agreement in writing between the Principal Directors General or Principal Chief Commissioners of both the States; and (ii) that though the individuals as well as the partnership firms involved in these cases are assessees on the file of the Assistant Commissioner of Income Tax, Bhimavaram, the registered offices of the group companies are admittedly situate at Hyderabad and are assessed to tax at Hyderabad and that therefore a mighty department of the Government of I....
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.... Commissioner. Therefore, the legal issue sought to be raised, does not arise in the cases on hand. 14. The next argument of the learned counsel for the petitioners is that the registered offices of all the corporate entities who are the writ petitioners in 3 out of 4 writ petitions on hand, are situate at Hyderabad and that all the books of accounts are also maintained at Hyderabad. The presence of the Department in Hyderabad is more pronounced than their presence in a district headquarters and hence it is contended that the centralisation and transfer of cases to Hyderabad may prove to be convenient to both the Department as well as the assessees, while it may prove to be inconvenient to the assessees if they are transferred to Rajamahendravaram. 15. In the normal circumstances, we would go by this contention of the learned counsel for the petitioners. The centralisation and transfer of cases, should result in the least inconvenience to both parties. It is true that the assessees, are facing a mighty department of the Government. It is also true that the presence of the Department in the State capital, may be more pronounced than their presence in district headquarters. The....
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.... into bank accounts operated in Bhimavaram, but they are not recorded in the books of accounts of the firm having its office at Bhimavaram, (vi) that in the course of investigation and enquiry, the Department may have to examine all related parties, bogus shareholders and benamidars, if any and (vii) that therefore it is not possible to collect oral evidence of these parties at Hyderabad. 20. In the light of the averments made by the Department in their counter affidavits, the gist of which we have extracted in the preceding paragraph, it is clear that the centralisation and transfer of cases to Hyderabad may prove to be futile, as the Department may not be able to summon all the witnesses from Bhimavaram. Even if they have the power to summon, the same will inconvenience hundreds of persons residing in Bhimavaram, provided they are actually in existence. 21. We have already given a tabulation of the number of assessees (17 in number), their present jurisdiction and the reasons for centralisation as given by the Department in an Annexure to the counter affidavit. The same discloses that the hardship that would be caused to the witnesses and the inconvenience that would be cau....