Venkatewara Cables P. Ltd., Hyd, Hyderabad V. DCIT, Circle-3(3), Hyderabad, Hyderabad

ITA 160/HYD/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6232 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 23-02-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 15-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E SUNIL BABU
• Assessee Lawyers: A V RAGHURAM
• Keywords: Reopening of assessment; Sale consideration of property below Jantri Value; Depreciation; Search and seizure; Tangible material; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 50C; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER S. NO. ITA NO. A.Y. APPELLANT RESPONDENT 1. 160/HYD/16 2005-06 VENKATESWARA CABLES (P) LTD., HYDERABAD. PAN AAACV 8203 B DY. COMMISSIONER OF INCOME-TAX, CIRCLE 3(3), HYDERABAD. ASSESSEE BY : SRI A.V. RAGHURAM REVENUE BY : SRI K.E. SUNIL BABU DATE OF HEARING : 23-08- 2016 DATE OF PRONOUNCEMENT : 21-09-2016 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF CIT(A) 5, HYDERABAD, DATED 18/11/2015 FOR AY 2005 -06. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURE OF COPPER WI RES AND ALUMINUM CONDUCTORS, FILED ITS RETURN OF INCOME FOR THE AY 2005-06 ON 27/10/2005 DECLARING A TOTAL INCOME OF RS. 77,99,62 0/-. THE CASE WAS SELECTED FOR SCRUTINY AND ORDER PASSED U/S 143(3) O N 21/11/2007, WITH ASSESSED INCOME OF RS. 78,16,403. 2.1 LATER ON, IT WAS NOTICED THAT THE RATE ADOPTED BY THE STAMP DUTY AUTHORITIES WAS NOT TAKEN AS SALE CONSIDERATION REC EIVED ON SALE OF LAND AS PRESCRIBED IN SECTION 50C OF THE ACT . ACCO RDINGLY, A NOTICE U/S 148 WAS ISSUED AND IN RESPONSE TO THIS, THE COM PANY ASKED FOR REASONS FOR REOPENING, WHICH WERE DULY PROVIDED BY LETTER DATED 2 ITA.NO. 160/HYD/16 VENKATESWARA CABLES (P) LTD. 02.05.2012. UPON RECEIVING THE SAME, THE ASSESSEE C OMPANY FILED OBJECTIONS FOR RE-OPENING, WHICH WERE DULY ANSWERED BY A SPEAKING ORDER DATED 16.05.2012. ACCORDINGLY, THE ASSESSMENT PROCEEDINGS WERE COMPLETED. 2.2 THE ASSESSEE COMPANY HAS SHOWN CONSIDERATION R ECEIVED ON SALE OF LAND AT RS.48,38,000/ -. BUT AS PER COPY OF REGISTERED SALE DEED, THE VALUE ADOPTED BY THE STAMP DUTY AUTHORITY WAS RS.54,04,500/-. THERE IS DIFFERENCE OF RS.5,66,200 /-. THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY IS TO BE T AKEN AS THE FULL VALUE OF CONSIDERATION RECEIVED BY THE ASSESSEE, IN CALCULATION OF LONG TERM CAPITAL GAINS IN ACCORDANCE WITH THE PROVISION S OF THE SECTION 50C OF THE ACT . THE ASSESSMENT WAS FINALIZED BY TH E AO DETERMINING THE TAXABLE INCOME AT RS.77,98,223/ -. 3. AGGRIEVED WITH THE ABOVE ORDER, THE ASSESSEE PRE FERRED AN APPEAL BEFORE THE CIT(A). 4. BEFORE THE CIT(A) THE ASSESSEE COMPANY' TOOK THE ARGUMENT THAT SECTION 50C DOES NOT BESTOW UNFETTERED POWERS OF THE ASSESSING OFFICER AND IN CASE OF DISAGREEMENT BETWEEN THE ASS ESSEE AND THE AO, THE ASSESSING OFFICER SHOULD HAVE REFERRED THE MATTER TO THE VALUATION OFFICER FOR DETERMINING THE ASSESSABLE VA LUE. IT IS SUBMITTED THAT IN THIS CASE THE AO WAS SATISFIED IN COURSE OF ORIGINAL ASSESSMENT AND CHOSE NOT TO REFER THE VARIATION IN THE VALUE T O THE VALUATION OFFICER. THE ASSESSEE CONTENDED THAT NOW IT IS NOT OPEN TO THE PRESENT AO TO RESORT TO THE SAME SINCE THE ASSESSEE WOULD N OT BE ABLE TO SUBSTANTIATE ITS ORIGINAL CLAIM OF DISTRESS SALE AS SEVEN YEARS HAVE LAPSED AND THE FACTORY BUILDING IS NO LONGER EXISTI NG ON THE DATE. 5. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E, THE CIT(A) AFTER EXAMINING THE ISSUE WITH FEW CASE LAWS, OBSER VED THAT THE CASE WAS REOPENED BY THE AO ON THE BASIS OF A SUBSTANTIA L REASONING 3 ITA.NO. 160/HYD/16 VENKATESWARA CABLES (P) LTD. RECORDED BY HER AND A NOTICE U/S 148 WAS ISSUED. IN RESPONSE TO THIS, THE COMPANY ASKED FOR REASONS FOR REOPENING, WHICH WERE DULY PROVIDED BY LETTER DATED 02.05.2012. UPON RECEIVING THE SAME, THE ASSESSEE COMPANY FILED OBJECTIONS FOR RE-OPENING, W HICH WERE DULY ANSWERED BY A SPEAKING ORDER DATED 16.05.2012. THER EFORE, OBJECTION RAISED BY THE APPELLANT WHILE DISPUTING THE ACTION OF AO IN INITIATING REOPENING PROCEEDING DOES NOT STAND IN VIEW OF ABOV E CITED JUDGMENTS. 5.1 CIT(A) FURTHER OBSERVED THAT 5OC ONLY STATES TH AT ' .... THE ASSESSING OFFICER MAY REFER THE VALUATION OF THE CA PITAL ASSET TO THE VALUATION OFFICER .... '. THUS, ASSESSING OFFICER I S NOT COMPULSORILY REQUIRED TO DO THE SAME. MOREOVER, AS THE COMPANY I TSELF POINTED OUT, REFERENCE TO VALUATION AUTHORITY IS NO LONGER POSSI BLE AS THE BUILDING DOES NOT EXIST ON DATE. THIS FACT WAS STATED BEFORE THE AO DURING THE REASSESSMENT PROCEEDINGS. HENCE, THE CONCLUSION IS TO BE DRAWN ONLY WITH MATERIAL AVAILABLE ON RECORD. IN VIEW OF THE A BOVE THE CIT(A) UPHELD THE ACTION OF THE AO IN REOPENING THE ASSESS MENT AND CONFIRMED THE ACTION OF RS. 5,66,200/- BEING THE DI FFERENCE OF SALE CONSIDERATION RECEIVED ON SALE OF LAND (RS. 48,38,0 00/-) AND THE VALUE ADOPTED BY THE STAMP DUTY AUTHORITY (RS. 54,04,500/ -). 5.2 ON MERITS, IT WAS ARGUED THAT THE AO ERRED IN INVOKING THE PROVISIONS OF SECTION 5OC OF THE INCOME TAX ACT, 19 61 WITHOUT PROPER APPLICATION OF MIND, IN AS MUCH AS, THE PROVISIONS CONTAINED IN THE SAID SECTION ARE NOT AUTOMATIC AND NEEDS TO BE APPL IED JUDICIOUSLY WHICH IS EVIDENT FROM THE FACT THAT WHERE THERE IS DISAGREEMENT BETWEEN THE ASSESSEE AND THE ASSESSING OFFICER, THE LEGISLATURE THOUGHT IT FIT THAT THE MATTER SHOULD BE REFERRED T O THE VALUATION CELL OF THE DEPARTMENT FOR ITS ADJUDICATION. 4 ITA.NO. 160/HYD/16 VENKATESWARA CABLES (P) LTD. 5.3 THE CIT(A) OBSERVED THAT IN THE PRESENT CASE TH E ASSESSEE COMPANY CLAIMED THAT IT WAS A DISTRESS SALE BUT THE RE ARE NO EVIDENCES BROUGHT ON RECORD, REGARDING THE SAME. TH EREFORE, FINDING NO OTHER MATERIAL, THE AO IS JUSTIFIED IN APPLYING THE PROVISIONS OF SECTION 5OC AND TAKING THE SALE CONSIDERATION AT RS .54,04,500 / -, AS ADOPTED BY THE STAMP VALUATION AUTHORITY. IN CASE T HE AO DOES NOT AGREE WITH THE EXPLANATION OF THE ASSESSEE WITH REG ARD TO LOWER CONSIDERATION DISCLOSED BY HIM THEN HE MAY REFER TH E MATTER TO DVO FOR GETTING ITS MARKET RATE ESTABLISHED AS ON DATE OF THE SALE TO ARRIVE AT THE CORRECT SALE CONSIDERATION. BUT THE ASSESSEE COMPANY ITSELF POINTED OUT, REFERENCE TO VALUATION AUTHORITY IS NO LONGER POSSIBLE AS THE BUILDING DOES NOT EXIST ON DATE. THIS FACT WAS STATED BEFORE THE AO DURING THE REASSESSMENT PROCEEDINGS AND ALSO BEF ORE CIT(A). HENCE, THE CONCLUSION IS TO BE DRAWN ONLY WITH MATE RIAL AVAILABLE ON RECORD. 5.4 THE CIT(A) HELD THAT WITH APPLICATION OF THE PR OVISIONS OF SECTION 5OC, THE SALE CONSIDERATION IS TO BE TAKEN AT RS.54 ,04,500/-, AS ADOPTED BY THE STAMP VALUATION AUTHORITY. SINCE THE COMPANY CALCULATED LONG TERM CAPITAL GAINS BY TAKING SALE C ONSIDERATION AT ONLY RS.48,38,000/-, THE DIFFERENCE OF RS.5,66,200/- IS CORRECTLY ADDED TO THE LONG TERM CAPITAL GAINS. 6. AGGRIEVED WITH THE ORDER OF THE CIT(A), THE ASSE SSEE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF A PPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -5, HYDERABAD, DISMISSING THE APPEAL OF THE APPELLANT F OR THE AY 2005-06 IS PERVERSE, ILLEGAL AND UNSUSTAINABLE IN L AW. THE COMMISSIONER (APPEALS) ERRED IN SUSTAINING THE ORDE R OF ASSESSMENT WHICH HAS ASSESSED THE DIFFERENCE OF RS. 5,66,200 BY APPLYING THE PROVISIONS OF SECTION 50C OF THE ACT. 5 ITA.NO. 160/HYD/16 VENKATESWARA CABLES (P) LTD. 2. THE LEARNED COMMISSIONER (APPEALS) ERRED IN SUST AINING THE ACTION OF THE ASSESSING OFFICER IN REOPENING THE AS SESSMENT WHICH WAS DONE UNDER THE PROVISIONS OF SECTION 143( 3) OF THE INCOME TAX ACT. THE COMMISSIONER (APPEALS) FAILED T O APPRECIATE THAT THE VERY REASON FOR SELECTION OF TH E APPELLANT'S CASE FOR SCRUTINY IS ON ACCOUNT OF CAPITAL GAINS AN D THEREFORE IT CANNOT BE SAID THAT THE ASSESSING OFFICER HAS NOT D EALT WITH THE SAID ISSUE IN THE SCRUTINY ASSESSMENT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE COMMISSIONER (APPEALS) FAILED TO APPRECIATE THAT TH E ASSESSING OFFICER IN THE SCRUTINY ASSESSMENT HAS APPLIED HIS MIND TO THE FACTS OF THE CASE AND ACCEPTED THE VALUE OF RS.48,3 8,000 ADOPTED BY THE PARTIES IN THE SALE DEED. 4. THE COMMISSIONER (APPEALS) OUGHT TO HAVE APPRECI ATED THAT IT IS THE DISCRETION OF THE ASSESSING OFFICER TO ACCEP T OR NOT TO ACCEPT THE VALUE OF STATED CONSIDERATION IN THE SAL E DEED BASED ON THE FACTS OF THE CASE, AND SINCE IN THE PRESENT CASE, THE ASSESSING OFFICER HAD ACCEPTED THE VALUE, HE DID NO T FEEL IT NECESSARY TO REFER TO THE VALUATION CELL. 5. THE COMMISSIONER (APPEALS) ERRED IN APPLYING THE CASE LAW WHICH WERE NOT APPOSITE TO THE FACTS OF THE APPELLA NT'S CASE. 7. LD. AR SUBMITTED THAT THE ASSESSMENT FOR THIS AY 2005-06 UNDER CONSIDERATION WAS COMPLETED U/S 143(3) ON 21/ 11/2007. THE ASSESSMENT WAS COMPLETED AFTER TAKING UP THE NECESS ARY INFORMATION FROM THE ASSESSEE. THE PRESUMPTION IS THAT THE AO M UST HAVE APPLIED HIS MIND BEFORE COMPLETING THE ASSESSMENT. LD. AR S UBMITTED THAT THE AO HAD COLLECTED THE INFORMATION ABOUT THE TRANSFER OF THE PROPERTY AGAINST THE NOTICE U/S 143(2) (REFER PAGE 4 OF PAPE R BOOK). THE SAME ASSESSMENT WAS REOPENED BY AO ON 05/03/2012 WHICH I S BEYOND FOUR YEARS. THERE IS NO NEW MATERIAL BROUGHT ON RECORD. THEREFORE, IT AMOUNTS TO CHANGE OF OPINION. ACCORDINGLY, HE RELIE D ON THE FOLLOWING CASE LAWS: 1. CIT VS. KELVINATOR OF INDIA LTD., 320 ITR 561 2. GLAND PHARMA LTD. VS. DCIT, ITA NO. 45/HYD/2015 , ORDER DATED 06/07/2016. 6 ITA.NO. 160/HYD/16 VENKATESWARA CABLES (P) LTD. 8. LD. DR SUBMITTED THAT THE CIT(A) HAS ALREADY DEA LT WITH THE ISSUE OF REOPENING IN HIS ORDER AND HE RELIED ON TH E ORDER OF CIT(A). 9. CONSIDERED THE SUBMISSIONS OF BOTH THE COUNSELS AND PERUSED THE MATERIAL FACTS ON RECORD AS WELL AS THE ORDERS OF REVENUE AUTHORITIES. ACCORDING TO THE AR OF THE ASSESSEE, T HE ASSESSMENT WAS COMPLETED ACCEPTING THE SUBMISSIONS MADE BY THE ASS ESSEE IN THE MATTER AND, THEREFORE, A MERE CHANGE OF OPINION IN THE MATTER OF SAME ISSUE CANNOT BE A GROUND FOR RESORTING TO REOPENING PROCEEDINGS U/S 147/148 OF THE IT ACT. 1961. FOR THE CONCEPT OF CHANGE OF OPINION, THE SUPREME COURT HAS HELD IN THE CASE OF CIT VS. KELVI NATOR OF INDIA LTD. (2010) 320 ITR 561 AS FOLLOWS : THE CONCEPT OF CHANGE OF OPINION ON THE PART OF THE ASSESSING OFFICER TO REOPEN AN ASSESSMENT DOES NOT STAND OBLITERATED AFTER THE SUBSTITUTION OF SECTION 147 O F THE INCOME TAX ACT, 1961, BY THE DIRECT TAX LAWS (AMENDMENT) A CTS, 1987 AND 1989. AFTER THE AMENDMENT, THE ASSESSING OFFICE R HAS TO HAVE REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSE SSMENT, BUT THIS DOES NOT IMPLY THAT THE ASSESSING OFFICER CAN REOPEN AN ASSESSMENT ON MERE CHANGE OF OPINION. THE CONCEPT O F CHANGE OF OPINION MUST BE TREATED AS AN IN-BUILT TEST TO CHECK THE ABUSE OF POWER. HENCE, AFTER APRIL 1, 1989, THE ASS ESSING OFFICER HAS POWER TO REOPEN AN ASSESSMENT, PROVIDED THERE IS TANGIBLE MATERIAL TO COME TO THE CONCLUSION THAT THERE WAS ESCAPEMENT OF INCOME FROM ASSESSMENT. REASON MUST H AVE A LINK WITH THE FORMATION OF THE BELIEF. DECISIONS OF THE DELHI HIGH COURT IN CIT V. KELVINATOR OF INDIA LTD. (2002) 256 ITR 1 (FB) AND CIT V. EICHER LTD. (2007) 294 ITR 310 AFFIRMED. '147. INCOME ESCAPING ASSESSMENT.IF THE AO HAS REA SON TO BELIEVE THAT ANY INCOME ME CHARGEABLE TO TAX HAS ES CAPED ASSESSMENT FOR ANY ASSESSMENT YEAR, HE MAY, SUBJECT TO THE PROVISIONS OF SS. 148 TO 153, ASSESS OR REASSESS SU CH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH H AS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENT LY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION, OR RE COMPUTE THE LOSS OR THE DEPRECIATION ALLOWANCE OR ANY OTHER ALL OWANCE, AS THE CASE MAY BE, FOR THE ASSESSMENT YEAR CONCERNED (HEREAFTER IN THIS SECTION AND IN SS. 148 TO 153 REFERRED TO A S THE RELEVANT ASSESSMENT YEAR).' 7 ITA.NO. 160/HYD/16 VENKATESWARA CABLES (P) LTD. AFTER THE AMENDING ACT, 1989, S. 147 READS AS UNDER : 4. ON GOING THROUGH THE CHANGES, QUOTED ABOVE, MADE T O S. 147 OF THE ACT, WE FIND THAT, PRIOR TO DIRECT TAX LAWS (AMENDMENT) ACT, 1987, REOPENING COULD BE DONE UNDER ABOVE TWO CONDITIONS AND FULFILLMENT OF THE SAID CONDITIONS ALONE CONFER RED JURISDICTION ON THE AO TO MAKE A BACK ASSESSMENT, BUT IN S. 147 OF THE ACT (W.E.F. 1ST APRIL, 1989), THEY ARE GIVEN A GO BY A ND ONLY ONE CONDITION HAS REMAINED, VIZ., THAT WHERE THE AO HAS REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT, CONFERS JURISDICTION TO REOPEN THE ASSESSMENT. THEREFORE, P OST 1ST APRIL, 1989, POWER TO REOPEN IS MUCH WIDER. HOWEVER, ONE N EEDS TO GIVE A SCHEMATIC INTERPRETATION TO THE WORDS 'REASO N TO BELIEVE' FAILING WHICH, WE ARE AFRAID, S. 147 WOULD GIVE ARB ITRARY POWERS TO THE AO TO REOPEN ASSESSMENTS ON THE BASIS OF 'ME RE CHANGE OF OPINION', WHICH CANNOT BE PER SE REASON TO REOPE N. WE MUST ALSO KEEP IN MIND THE CONCEPTUAL DIFFERENCE BETWEEN POWER TO REVIEW AND POWER TO REASSESS. THE AO HAS NO POWER T O REVIEW; HE HAS THE POWER TO REASSESS. BUT REASSESSMENT HAS TO BE BASED ON FULFILLMENT OF CERTAIN PRE-CONDITION AND I F THE CONCEPT OF 'CHANGE OF OPINION' IS REMOVED, AS CONTENDED ON BEHALF OF THE DEPARTMENT, THEN, IN THE GARB OF REOPENING THE ASSESSMENT, REVIEW WOULD TAKE PLACE. ONE MUST TREAT THE CONCEPT OF 'CHANGE OF OPINION' AS AN IN-BUILT TEST TO CHECK ABUSE OF P OWER BY THE AO. HENCE, AFTER 1ST APRIL, 1989, AO HAS POWER TO R EOPEN, PROVIDED THERE IS 'TANGIBLE MATERIAL' TO COME TO TH E CONCLUSION THAT THERE IS ESCAPEMENT OF INCOME FROM ASSESSMENT. REASONS MUST HAVE A LIVE LINK WITH THE FORMATION OF THE BEL IEF. OUR VIEW GETS SUPPORT FROM THE CHANGES MADE TO S. 147 OF THE ACT, AS QUOTED HEREINABOVE. UNDER THE DIRECT TAX LAWS (AMEN DMENT) ACT, 1987, PARLIAMENT NOT ONLY DELETED THE WORDS 'R EASON TO BELIEVE' BUT ALSO INSERTED THE WORD 'OPINION' IN S. 147 OF THE ACT. HOWEVER, ON RECEIPT OF REPRESENTATIONS FROM TH E COMPANIES AGAINST OMISSION OF THE WORDS 'REASON TO BELIEVE', PARLIAMENT RE-INTRODUCED THE SAID EXPRESSION AND DELETED THE W ORD 'OPINION' ON THE GROUND THAT IT WOULD VEST ARBITRAR Y POWERS IN THE AO. WE QUOTE HEREINBELOW THE RELEVANT PORTION OF CI RCULAR NO. 549, DT. 31ST OCT., 1989 [(1990) 82 CTR (ST) 1], WH ICH READS AS FOLLOWS : '7.2 AMENDMENT MADE BY THE AMENDING ACT, 1989, TO R E- INTRODUCE THE EXPRESSION REASON TO BELIEVE IN S. 147. A NUMBER OF REPRESENTATIONS WERE RECEIVED AGAINST THE OMISSI ON OF THE WORDS REASON TO BELIEVE FROM S. 147 AND THEIR SUB STITUTION BY THE OPINION OF THE AO. IT WAS POINTED OUT THAT TH E MEANING OF THE EXPRESSION, REASON TO BELIEVE HAD BEEN EXPLAI NED IN A 8 ITA.NO. 160/HYD/16 VENKATESWARA CABLES (P) LTD. NUMBER OF COURT RULINGS IN THE PAST AND WAS WELL SE TTLED AND ITS OMISSION FROM S. 147 WOULD GIVE ARBITRARY POWERS TO THE AO TO REOPEN PAST ASSESSMENTS ON MERE CHANGE OF OPINION. TO ALLAY THESE FEARS, THE AMENDING ACT, 1989, HAS AGAIN AMEN DED S. 147 TO REINTRODUCE THE EXPRESSION HAS REASON TO BELIEV E IN PLACE OF THE WORDS FOR REASONS TO BE RECORDED BY HIM IN WRI TING, IS OF THE OPINION. OTHER PROVISIONS OF THE NEW S. 147, HOWEV ER, REMAIN THE SAME.' 5. FOR THE AFORE-STATED REASONS, WE SEE NO MERIT IN T HESE CIVIL APPEALS FILED BY THE DEPARTMENT, HENCE, DISMISSED W ITH NO ORDER AS TO COSTS 10. THUS, THERE BEING NO NEXUS OR LIVE-LINK WITH THE R EASONS RECORDED AND THE FORMATION OF BELIEF TO COME TO A CONCLUSI ON THAT THERE WAS ESCAPEMENT OF INCOME AND ALSO SINCE THE ASSESSMENT HAS BEEN REOPENED BEYOND THE PERIOD OF 4 YEARS WHEN THERE IS NO FAILU RE ON THE PART OF THE ASSESSEE TO FULLY AND TRULY DISCLOSE ALL MATERIAL F ACTS IN THE ORIGINAL ASSESSMENT ITSELF, AND THERE BEING NO TANGIBLE MAT ERIAL FOR THE REOPENING OF THE ASSESSMENT, THE CIT(A) ERRED IN CONFIRMING T HE ORDER OF THE ASSESSING OFFICER. WE, THEREFORE, HOLD THAT THE REO PENING OF THE JURISDICTION UNDER SECTION 147 IS BAD IN LAW AND IS TO BE QUASHE D. SINCE, WE HAVE QUASHED THE REOPENING OF ASSESSMENT ITSELF, THE GROUND ON MERITS OF THE ADDITION DOES NOT REQUIRE ANY CONSIDERATION AS IT B ECOMES ACADEMIC IN NATURE. ACCORDINGLY, WE ALLOW THE APPEAL OF THE ASS ESSEE. 11. IN THE RESULT, THE APPEAL UNDER CONSIDERATION I S ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST SEPTEMBER, 2016. SD/- SD/- (D. MANMOHAN) (S. RIFAUR RAHMAN) VICE PRESIDENT ACCOUNTANT MEMBER HYDERABAD, DTD. 21 ST SEPTEMBER, 2016. KV 9 ITA.NO. 160/HYD/16 VENKATESWARA CABLES (P) LTD. COPY TO : 1. M/S VENKATESWARA CABLES PVT. LTD., K. VASANTKUMAR & A.V. RAGHURAM, ADVOCATES, 610, 6 TH FLOOR, BABHUKHAN ESTATE, BASHEERBAGH, HYDERABAD. 2. DCIT, CIRCLE 3(3), 7 TH FLOOR, IT TOWERS, AC GUARDS, BASHEERBAGH, HYDERABAD. 3. CIT (APPEALS)-5, HYDERABAD. 4. PR. COMMISSIONER OF INCOME TAX - 5, HYDERABAD 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE