ACIT, Central Circle-3(1), Hyd, Hyderabad V. Byrraju Rama Raju (Sr.), Hyd, Hyderabad

ITA 1383/HYD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2712 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 14-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Tax effect
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 1383/HYD/2016 ASSESSMENT YEAR: 2005-06 ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3(1), HYDERABAD VS SRI B. RAMA RAJU (SR.) HYDERABAD [PAN: ACEPB2813Q] (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI SUNKU SRINIVAS, DR FOR ASSESSEE : SHRI K.C. DEVDAS, AR DATE OF HEARING : 03-01-2018 DATE OF PRONOUNCEMENT : 10-01-2018 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS IS AN APPEAL BY REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-12, HYDERABAD DATED 22-06-2016. REVENUE HAS RAISED THE FOLLOWING GROU ND: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) ERRED IN QUASHING THE REASONS OF RE-OPENING U/S. 14 7 WHICH WAS SUBSTITUTED WITH EFFECT FROM APRIL 1989 & SUB-SECTI ON 148 TO 253, WHICH ARE SUBSTANTIALLY DIFFERENT FROM THE PROVISIONS AS THEY STOOD PRIOR TO SUCH SUBSTITUTION. GROUND NO. 2 IS GENERAL IN NATURE. 2. BRIEFLY STATED, ASSESSEE HAS FILED RETURN OF INCOM E DECLARING INCOME OF RS. 89,30,450/- INCLUDING INTEREST ACCRUED ON DEPOSITS TO AN EXTENT OF RS.2,58,822/-. AFTER THE STATEMENT OF SH RI B. I.T.A. NO. 1383/HYD/2016 :- 2 - : RAMALINA RAJU OF M/S. SATYAM COMPUTER SERVICES LTD., ASSESSING OFFICER (AO) HAS REOPENED ALL THE CASES IN THE GROUP AND ONE SUCH CASE IS THAT OF ASSESSEE. IN THE RE-ASSESSMENT PROCEED INGS, AO FINALIZED THE ASSESSMENT BY MAKING AN ADDITION OF RS. 1,13,279/- BEING COMPENSATION RECEIVED FROM GOVERNMENT, TREATED A S OTHER INCOME. THE AMOUNT OF RS. 2,58,822/- WAS ALSO ADD ED AGAIN ON A PROTECTIVE BASIS, AS THE INCOME WAS SUBSTANTIALLY ASSESS ED IN OTHER CASES. 3. BEFORE THE LD.CIT(A), ASSESSEE OBJECTED TO THE REOP ENING OF ASSESSMENT AS WELL AS MAKING ADDITIONS. IT WAS SUBMIT TED THAT THE AMOUNT OF RS. 1,13,279/- WAS RECEIVED AS A COMPENSATI ON FROM THE COURT AS A LEGAL HEIR OF HIS FATHER, WHO MADE CLAIM D URING HIS LIFE TIME. IT WAS CAPITAL IN NATURE WHICH IS NOT LIABLE TO TAX. AS REGARDS THE INTEREST INCOME, IT WAS SUBMITTED THAT IT WAS ALREADY O FFERED IN THE COMPUTATION; HENCE AGAIN ADDING THE AMOUNT DOES N OT ARISE AND THERE IS NO NEED TO TAX THE SAME ON PROTECTIVE BASIS. 4. LD.CIT(A) AFTER CONSIDERING THE FACTUAL ASPECT OF TH E ADDITIONS, SET ASIDE THE ASSESSMENT ON THE REASON THAT R EOPENING OF ASSESSMENT IS BAD IN LAW AS THERE IS NO NEXUS BET WEEN THE SATISFACTION RECORDED AND THE ASSESSMENT MADE. LD.C IT(A) FOLLOWED THE DECISION OF ITAT A BENCH IN THE 16 GRO UP COMPANIES OF SATYAM GROUP IN ITA NO. 1233/HYD/2011 AND OTHERS, RELYING ON THE PRINCIPLES LAID DOWN THEREIN AND HAS SET ASIDE THE ASSESSMENT BY STATING AS UNDER: 5.4. CONSIDERING THE FACTS OF THE CASE AS ENUMERAT ED IN DECISION OF ITAT, HYDERABAD BENCH WHICH ARE RELIED UPON BY THE ASSESSEE AND THE FACTS OF THE CASE UNDER REFERENCE WHERE IT HAS BEEN ESTABLISHED THAT THE AO FAILED TO PROVE THE NEXUS BETWEEN THE STATEMENT OF RAMALINGA RAJU I.T.A. NO. 1383/HYD/2016 :- 3 - : AND FUDGING OF ACCOUNTS OF M/S.SCSL AND THEIR IMPAC T ON THE GROUP CONCERNS OR PERSONS INCLUDING THE ASSESSEE/APPELLAN T FOR THE PURPOSE OF ASSESSING TO INCOME TAX AND ALSO FOR THE FACT THAT THERE IS NO NEXUS BETWEEN THE REASONS RECORDED AND ADDITIONS MADE, I HAVE NO HESITATION IN HOLDING THAT REOPENING ASSESSMENTS U/S. 147 INCOME TAX ACT FOR A.Y. 2005-06 IN THIS CASE IS LIABLE TO BE SET ASIDE AND THE GROUNDS RELATED TO THIS ISSUE ARE TREATED AS ALLOWED. SINCE THE GROUN D ON REOPENING IS ALLOWED, I AM OF THE FURTHER OPINION THAT THE OTHER GROUNDS RELATING TO THE ADDITIONS MADE DO NOT REQUIRE SEPARATE CONSIDERATIO N OR ADJUDICATION AS THEY HAVE BECOME ACADEMIC IN NATURE. 5. AFTER CONSIDERING THE RIVAL CONTENTIONS, WE ARE OF TH E OPINION THAT THERE IS NO MERIT IN REVENUE APPEAL. FIRST OF ALL AS RIGHTLY POINTED OUT BY THE LD.CIT(A), THE REASONS RECORDED FOR REOPENING THE ASSESSMENT HAS NO NEXUS WITH THE ULTIMATE ASSESSMEN T MADE. THEREFORE, WE ARE OF THE OPINION THAT THE CIT(A) HAS R IGHTLY COME TO THE CONCLUSION THAT REOPENING OF ASSESSMENT IS BAD IN LAW. MOREOVER, AS SEEN FROM THE ORDER OF THE AO, THE ADDITI ON IS ONLY OF RS. 1,13,279/- IN THE RE-ASSESSMENT ORDER AND HENCE, THE TAX EFFECT IS BELOW RS. 10 LAKHS. REVENUE HAS NOT GIVEN ANY REASON WHY THE APPEAL IS PREFERRED IN VIOLATION OF BOARD CIR CULAR NO.21/2015 DATED 10 TH DECEMBER, 2015, BEARING F.NO.279/- MISC.142/2007-ITJ(PT), WHICH SPECIFICALLY SHOWS THAT APPEALS WITH TAX EFFECT BELOW RS. 10 LAKHS SHOULD NOT BE PREFERRED. FOR THESE REASONS ALSO THE APPEAL IS NOT MAINTAINABLE. GROUNDS A RE ACCORDINGLY REJECTED. 6. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH JANUARY, 2018 SD/- SD/- (P. MADHAVI DEVI) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEM BER HYDERABAD, DATED 10 TH JANUARY, 2018 TNMM I.T.A. NO. 1383/HYD/2016 :- 4 - : COPY TO : 1. ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -3(1), HYDERABAD. 2. SHRI B. RAMA RAJU (SR.), PLOT NO. 1326, ROAD NO. 66, JUBILEE HILLS, HYDERABAD. 3. CIT (APPEALS)-12, HYDERABAD. 4. PR.CIT-(CENTRAL), HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.