Goldstone Technologies Ltd., Hyd, Hyderabad V. DCIT, Central Circle-3(1), Hyd, Hyderabad

ITA 1040/HYD/2015

• Counselvise Citation: 104022514 RSA 2015
• Duration Of Justice: 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-11-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 11-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G APARNA RAO
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Revision of order; Search and seizure; Opportunity of being heard
• Section: 143(3); 153A; 263; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI P.MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 1040/HYD/2015 ASSESSMENT YEAR: 2008-09 GOLDSTONE TECHNOLOGIES LTD., HYDERABAD. PAN AAACG7478F VS. DY. COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE 3(1), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P. MURALI MOHAN RAO REVENUE BY : SMT. G. APARNA RAO DATE OF HEARING : 05-11-2015 DATE OF PRONOUNCEMENT : 20-11-2015 O R D E R PER S. RIFAUR RAHAMAN, A.M.: THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE OR DER DATED 12/06/2015 OF LD. CIT(A) XI, HYDERABAD FOR THE A Y 2008-09. 2. THE ASSESSEE FILED A PETITION FOR ADMISSION OF T HE FOLLOWING ADDITIONAL GROUNDS OF APPEAL, FOR WHICH IT RELIED O N THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERM AL POWER CO. LTD. VS. CIT [1998] 229 ITR 383 (SC) AND THE DECISI ON OF VED PRAKASH AGARWAL (HYD.) OF THIS COORDINATE BENCH IN ITA NO. 659 TO 665/HYD/12, WHICH ARE AS FOLLOWS: 1 . THE ASSESSING OFFICER HAS NOWHERE RECORDED ANY SA TISFACTION AS REQUIRED U/S 153-A OF THE ACT AND NO SUCH SATISFAC TION COMMUNICATED WITH APPELLANT. 2.THE LD. CIT (A) OUGHT TO HAVE APPRECIATED THE FA CT THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH AT THE PREMISE OF THE ASSESSEE. 2 ITA NO. 1040 /HYD/2015 GOLDSTONE TECHNOLOGIES LTD. 3. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THE FA CT THAT NO ADDITION CAN BE MADE TO THE INCOME OF THE ASSESSEE U/S 143(3) R WS I53A OF THE ACT WITHOUT THERE BEING ANY INCRIMINATING MATERIAL FOU ND DURING THE COURSE OF THE SEARCH. 3. WE HAVE HEARD THE SUBMISSIONS OF THE PARTIES ON THIS ISSUE. WE ACCEPT THE CONTENTION OF THE LEARNED AUTHORIZED REPRESENT ATIVE THAT THE ISSUE RAISED IN THE ADDITIONAL GROUNDS ARE PURELY LEGAL ISSUE WI THOUT INVOLVING INVESTIGATION INTO FRESH FACTS AND CAN BE DECIDED ON THE BASIS OF FACTS ALREADY ON RECORD. IN AFORESAID VIEW OF THE MATTER, WE ADMIT THE ADDITIO NAL GROUND AND DEAL WITH THE SAME AT THE FIRST INSTANCE. 4. BRIEFLY THE FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE OPERATION U/S 132 OF THE IT ACT, 1961 WAS CONDUCTED IN THE CASE OF ASSESSEE AND ITS GROUP CASES ON 11/03/10. BASED ON CERTAIN MATERIAL FOUND AND SEIZED, A NOTICE U/S 153A WAS ISSUED TO ASSESSEE ON 26/10/2010. IN RESPONSE TO THE NOTICE ISSUED, ASSES SEE FILED RETURN OF INCOME FOR AY 2008-09 ON 10/08/11 DECLARING INCOME OF RS. 3,34,87,980. IN RESPONSE TO THE NOTICE ISSUED U/S 1 42(1), AR OF ASSESSEE APPEARED AND SUBMITTED THE INFORMATION. ASSESSEE FILED ORIGINAL RETURN OF INCOME ON 15/10/08 DECLARING INC OME OF RS. 3,34,87,980 AFTER CLAIMING DEDUCTION U/S 10A OF RS. 9,82,96,801. AFTER EXAMINING THE RETURN OF INCOME AND ITS ENCLOSURES, THE AO NOTICED THAT THE ASSESSEE COMPANY CLAIMED DEDUCTION U/S 10A , BUT HAD NOT FURNISHED ANY BREAKUP OF DETAILS OF EXPORT PROFITS AND ALSO FAILED TO SUBMIT THE STATUTORY REPORT IN FORM NO. 56F EITHER WITH RETURN OF INCOME OR DURING THE COURSE OF ASSESSMENT PROCEEDIN GS. ACCORDINGLY, AO DISALLOWED THE DEDUCTION CLAIMED U/S 10A OF THE ACT. 5. SUBSEQUENTLY, CIT(CENTRAL) PASSED ORDER U/S 263 OF THE IT ACT, 1961 ON 27/03/2014, SET ASIDE THE ORDER PASSED U/S 143(3) R.W.S. 153A AND DIRECTED AO TO INITIATE THE REVISION PROCE EDINGS AFTER PROVIDING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, AO COMPLETED THE ASSESSMENT U/S 143(3) R.W.S. 263 ON 17/03/2015 AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE. IT IS 3 ITA NO. 1040 /HYD/2015 GOLDSTONE TECHNOLOGIES LTD. PERTINENT TO NOTE THAT THE AO ACCEPTED THE SUBMISSI ONS MADE BY ASSESSEE AND NO FURTHER ADDITIONS WERE MADE. 6. AGGRIEVED WITH THE ORDER U/S 143(3) R.W.S. 153A DATED 30/12/2011, ASSESSEE FILED APPEAL BEFORE THE LD. CI T(A)-XI. THE LD. CIT(A) DISMISSED THE APPEAL BY OBSERVING AS BELOW: 3. THE COMMISSIONER OF INCOME TAX(CENTRAL), HYDERAB AD HAD INVOKED PROVISIONS U/S 263 AND FOUND THAT THE ISSUE REGARD ING CAPITALIZATION OF PRE- OPERATIVE EXPENDITURE FOR AYS 2008-09 AND 2009-10 REGARDING THE BALANCE PRE-OPERATIVE EXPENDITURE BEING NEITHER CAPITALIZE D NOR SHOWN AS CAPITAL WIP AND THE ALLOWABILITY OF THE PROJECT DEVELOPMEN T EXPENSES CLAIMED IN RESPECT OF MEDIA DIVISION AND IP TV DIVISION WHICH ARE AT PREOPERATIVE STAGE BUT NO REVENUE ARE FETCHING WAS NOT EXAMINE D IN THE PROPER PERSPECTIVE BEFORE COMPLETION OF THE ASSESSMENTS. HE OBSERVED THAT THE ASSESSING OFFICER HAD NOT BROUGHT ON RECORD TO SHO W THAT HE VERIFIED THESE ISSUES WHILE COMPLETING THE ASSESSMENTS AND HELD THAT THE ORDERS PASSED U/S 143(3) R.W.S. 153A WERE ERRONEOUS IN SO FAR AS IT WAS PREJUDICIAL TO THE INTEREST OF REVENUE. ACCORDING LY, HE SET ASIDE THE ASSESSMENT ORDERS PASSED BY THE ASSESSING OFFICER U/S 143(3) R.W.S. 153A DT.302-2011 FOR AYS 2008-09 AND 2009-10 VID E ORDER U/S.263 IN ORDER NO.CIT(C)/263JLL1(1)111(2)/13-14 DT.27-3-201 4 WITH A DIRECTION TO REDO THE ASSESSMENT AS PER LAW AFTER CONDUCTING NE CESSARY VERIFICATION/ENQUIRIES. SINCE THE ORDER U/S143(3) R.W.S.153A HAD BEEN SET ASIDE TO BE DECIDED, THE APPEAL FILED AGAINST THE SAID ORDER BECOMES INFRUCTUOUS AND CANNOT BE ADJUDICATED. THEY ARE DI SMISSED ACCORDINGLY. 7. LD. AR SUBMITTED THAT CIT(A) HAD DISMISSED THE A PPEAL OF THE ASSESSEE WITHOUT CONSIDERING THE MERITS OF THE CASE . LD. AR ALSO SUBMITTED THAT THE AO CANNOT COMPLETE THE ASSESSMEN T ORDER U/S 143(3) R.W.S. 153A WITHOUT ANY INCRIMINATING MATERI AL BY RELYING ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN CASE OF CIT(C)-III VS. KABUL CHOWK, 61 TAXMAN.COM 412 LD. AR FURTHER SUBMI TTED THAT ASSESSEE HAD FILED THE DETAILS OF EXPORT PROFITS AN D FORM 56F DURING THE ASSESSMENT PROCEEDING. 8. LD. DR RELIED ON THE ORDERS OF THE LOWER AUTHORI TIES. 9. HAVING CONSIDERED THE SUBMISSIONS MADE BY BOTH T HE PARTIES AND PERUSED THE MATERIAL ON RECORD, WE ARE OF THE O PINION THAT LD. CIT(A) HAD DISMISSED THE ASSESSEES APPEAL WITHOUT CONSIDERING THE MATERIAL FACTS AVAILABLE ON RECORD. NO DOUBT, PROCE EDINGS U/S 263 INITIATED BY THE CIT(CENTRAL), HYDERABAD AND SET AS IDE THE ORDER 4 ITA NO. 1040 /HYD/2015 GOLDSTONE TECHNOLOGIES LTD. PASSED U/S 143(3) R.W.S. 153A OF THE AO DATED 30/12 /2011. THE LD. CIT(A) HAD NOT APPRECIATED THE GROUNDS RAISED BEFOR E HIM WERE DIFFERENT THAN THE REASONS RAISED TO INITIATE REVIS ION PROCEEDINGS BY THE LD. CIT(CENTRAL), HYDERABAD. IT IS PERTINENT TO NOTE THAT THE REVISION ORDER PASSED BY THE AO U/S 143(3) R.W.S. 2 63 HAD NOT RESULTED IN ANY ADDITION TO THE TOTAL INCOME ASSESS ED U/S 143(3) R.W.S. 153A. CONSIDERING THE ABOVE OBSERVATION, WE SET ASI DE THE ORDER OF CIT(A) AND REMIT THE FILE BACK TO CIT(A) WITH A DIR ECTION TO DECIDE THE APPEAL ON MERITS AND IN ACCORDANCE WITH LAW AFTER P ROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO ASSESSEE. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 20 TH NOVEMBER, 2015 SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RAHM AN) JUDICIAL MEMBER ACCOUN TANT MEMBER HYDERABAD, DATED: 20 TH NOVEMBER, 2015 KV COPY TO:- 1) GOLDSTONE TECHNOLOGIES LTD., C/O P. MURALI & CO. , CAS., 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD 82. 2) DCIT, CENTRAL CIRCLE - 3(1), HYDERABAD 3) CIT(A)-XI, HYDERABAD 4) PR. CIT(CENTRAL), HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD.