ACIT, Central Circle-3(1), Hyd, Hyderabad V. Summit Communications (P) Ltd., Hyd, Hyderabad

ITA 1255/HYD/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5885 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 26-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: U MINICHANDRAN
• Assessee Lawyers: P MURALI MOHANA RAO
• Keywords: Search and seizure
• Section: 143(3); 260A; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 1255/HYD/2016 ASSESSMENT YEAR: 2009-10 ASST. COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE 3(1), HYDERABAD. VS. SUMMIT COMMUNICATIONS (P) LTD., HYDERABAD. PAN AAJCS8426Q (APPELLANT) (RESPONDENT) REVENUE BY : SMT. U. MINI CHANDRAN ASSESSEE BY : SHRI P. MURALI MOHANA RAO DATE OF HEARING 28-12-2016 DATE OF PRONOUNCEMENT 30-12-2016 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF CIT(A)-11, HYDERABAD, DATED 20/06/2016 FOR AY 20 09-10 WHEREIN THE REVENUE HAS RAISED THE FOLLOWING GROUND OF APPE AL: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE CIT(A) WAS CORRECT IN SETTING ASIDE THE ORDER PASSE D BY THE AO U/S 143(3) RWS 263 AND TREATING IT AS INFRUCTUOUS, WHEN REVENUE HAS PREFERRED AN APPEAL U/S 260A BEFORE THE HONBLE HIGH COURT AGAINST THE ORDER OF THE HONBLE ITAT. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT CONSEQUEN T UPON SEARCH AND SEIZURE OPERATION CONDUCTED IN THE MBS JEWELLER S GROUP CERTAIN INCRIMINATING MATERIAL BELONGING TO THE ASSESSEE WA S FOUND AND SEIZED BASING ON WHICH A NOTICE U/S 153C WAS ISSUED . IN RESPONSE TO THE NOTICE ISSUED, THE ASSESSEE FILED ITS RETURN OF INCOME ON 05/12/2011 DECLARING A LOSS AT RS. 12,126/- AND THE ASSESSMENT U/S 143(3) R.W.S. 153C WAS COMPLETED ON 30/12/2011 BY A SSESSING AN INCOME OF RS. 33,73,38,552/- ON ACCOUNT OF SHORT TE RM CAPITAL GAINS 2 ITA NO. 1255/H/16 SUMMIT COMMUNICATIONS (P) LTD. ON A TRANSACTION OF SALE OF SHARES ENTERED INTO BY THE ASSESSEE THROUGH UNICON. 2.1 SUBSEQUENTLY, THE PRINCIPAL COMMISSIONER OF IN COME TAX(CENTRAL), HYDERABAD PASSED AN ORDER U/S 263 OF THE ACT SET ASIDE THE ASSESSMENT WITH DIRECTIONS TO VERIFY THE TRANSA CTION OF SHARES DONE WITH M/S UNICON AND QUANTIFY THE ACTUAL RECEIP TS IN THE HANDS OF THE ASSESSEE AFTER MAKING NECESSARY VERIFICATION. T HE AO WAS SEEN TO HAVE ERRONEOUSLY TAKEN THE CONSIDERATION ARISING OUT OF SALE OF SHARES AT RS. 22,07,21,270/- INSTEAD OF RS. 39.09 C RORES. THE ORDER PASSED EARLIER WAS THEREFORE SEEN AS ERRONEOUS IN S O FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF REVENUE. ACCORDINGL Y, THE DCIT, CENTRAL CIRCLE 3(1), HYDERABAD COMPLETED THE ASSESSMENT U /S 143(3) RWS 260 OF THE ACT ON 17/03/2015 DETERMINING THE TOTAL INCOME AT RS. 51,61,56,164/-. 3. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFO RE THE CIT(A) AND BROUGHT TO THE NOTICE OF THE CIT(A) THAT THE AS SESSEE PREFERRED APPEAL BEFORE THE ITAT AGAINST THE ORDER PASSED U/S 263 AND THE ITAT QUASHED THE SAID ORDER VIDE ITS ORDER DATED 24 /07/2015 IN ITA NO. 1029/HYD/2014. HE THEREFORE, SUBMITTED THAT THE CONSEQUENTIAL ORDER PASSED BY THE AO U/S 143(3) RWS 263 OF THE AC T BECOMES NULL AND VOID. 4. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E, THE CIT(A) OBSERVED THAT IN VIEW OF THE FACT THAT THE ASSESSME NT IS CANCELLED ON THE THRESHOLD ISSUE OF VALIDITY OF THE REVISION ORD ER U/S 263, THE CONSEQUENTIAL ORDER OF ASSESSMENT BECOMES BAD IN LA W AND HAS NO LEGS TO STAND. HE, THEREFORE, CONCLUDED THAT THERE IS NO OCCASION OR NECESSITY TO ADJUDICATE THE ORDER ON FACTUAL ISSUES . 5. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENU E IS IN APPEAL BEFORE US. 3 ITA NO. 1255/H/16 SUMMIT COMMUNICATIONS (P) LTD. 6. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL FACTS ON RECORD. AS THE ITAT QUASHED THE ORDER OF PRINCIP AL CIT PASSED U/S 263 OF THE ACT, THE CONSEQUENTIAL ORDER PASSED BY T HE AO U/S 143(3) R.W.S. 263 OF THE ACT BECOMES NON-EXISTENT. THEREFO RE, WE DO NOT FIND ANY INFIRMITY IN THE ACTION OF THE CIT(A) IN QUASHI NG THE CONSEQUENTIAL ORDER PASSED BY THE AO U/S 143(3) RWS 263 OF THE AC T. ACCORDINGLY, WE UPHOLD THE ORDER OF THE CIT(A) AND THE GROUND RA ISED BY THE REVENUE ON THIS ISSUE IS DISMISSED. 7. AS PER THE GROUND RAISED, THE REVENUE PREFERRED APPEAL BEFORE THE HONBLE HIGH COURT, IN SUCH CASE, THE RESULT/OU TCOME OF THE APPEAL IN FUTURE MAY BE ADOPTED BY APPLYING PRINCIPLE OF M ERGER. AT THIS POINT OF TIME, THE ORDER OF THE COORDINATE BENCH WILL BIN D ON THE AO. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON 30 TH DECEMBER, 2016. SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RAH MAN) JUDICIAL MEMBER A CCOUNTANT MEMBER HYDERABAD, DATED: 30 TH DECEMBER, 2016 KV COPY TO:- 1) ACIT, CENTRAL CIRCLE 3(1), 7 TH FLOOR, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD 500 004 2) M/S SUMMIT COMMUNICATIONS (P) LTD., 8-2-293/82/2 /281, 101, SUSHIPLA APARTMENTS, MLA COLONY, BANJARA HILLS, HYDERABAD. 3 CIT(A) 11, HYD. 4) PR. CIT (CENTRAL), HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD. 6) GUARD FILE