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2007] 294 ITR 147 [2008] 168 TAXMAN 203 (CAL.) HIGH COURT OF CALCUTTA Lords Distillery Ltd. v. Commissioner of Income-tax* SOUMITRA PAL, J. WRIT PETITION NO. 1931 OF 2006 MAY 7, 2007 Section 127 of the Income-tax Act, 1961 - Income-tax authorities - Power to transfer cases - Petitioner-company was having its registered office in Kolkata - Pursuant to a search at premises of 'R', some transactions were found between petitioner and 'R' and a notice under section 127 was issued for transfer of case to New Delhi for conducting 'co-ordinated investigation' - Petitioner filed written objection - However, order of transfer of case was passed and files were transferred to New Delhi - Whether mere business transaction can be criterion for transfer - Held, no - Whether since order of transfer simply stated that transfer was for 'co-ordinated investigation' without disclosing nature of investigation, same did not fulfil requirement of section 127 as it neither dealt with evidence adduced nor contained reasons which were valid and specific - Held, yes - Whether therefore, impugned notice and order of transfer could not be sustained - Held, yes FACTS The petitioner was a company having its registered office in Kolkata and was assessed at Kolkata. Pursuant to a search and seizure undertaken at the premises of 'R', it was found that illegal payments were made by various distilleries and there were transactions worth Rs. 18 crores between the petitioner and a distillery owned by 'R' in the financial year 2005-06. In that backdrop, the respondent took steps for centralization of the case for a meaningful, co-ordinated and post-search investigation and, therefore, issued notice under section 127 to the petitioner for transfer of case to New Delhi. The petitioner filed a written objection. However, the impugned order of transfer was passed and the files were transferred to New Delhi. On writ : HELD It appeared from the facts that a notice for transfer was served for conducting 'co-ordinated investigation in connection with the search undertaken against 'R'.' The notice, however, did not disclose the nature of investigation in connection with the search undertaken against 'R'.…

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