M/s. Gayatri Sugars Ltd., Hyd, Hyderabad V. ACIT, Circle-2(3), Hyderabad

ITA 1730/HYD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82574 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 07-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMAKRISHNA BANDI
• Assessee Lawyers: A V RAGHURAM
• Keywords: Reopening of assessment; Tangible material; Difference of opinion; Assessment record; Reason to believe; Change of opinion
• Section: 143(3); 142(1); 147; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NOS. 1728, 1729, 1730 & 1731/HYD/2011 ASSESSMENT YEARS : 2002-03, 2003-04, 2004-0 5 & 2005-06 M/S GAYATRI SUGARS LTD., HYDERABAD PAN AABCN1536G ASST. COMMISSIONER OF INCOME- TAX, CIRCLE 2(3), HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI A.V. RAGHURAM REVENUE BY SHRI RAMAKRISHNA BANDI DATE OF HEARING 30-10-2014 DATE OF PRONOUNCEMENT 26-11-2014 O R D E R PER SAKTIJIT DEY, J.M.: THESE FOUR APPEALS BY THE ASSESSEE ARE DIRECTED AGA INST SEPARATE ORDERS OF CIT(A)-III, ALL DATED 21/07/11 FOR THE ASSESSMENT YEARS 2002-03, 2003-04, 2004-05 AND 2005-06. 2. GROUNDS RAISED BY ASSESSEE, WHICH ARE COMMON IN ALL THE APPEALS, ARE AS UNDER: 1. THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS BOT H ON FACTS AND IN LAW IN SO FAR AS IT IS PREJUDICIAL TO THE AS SESSEE. 2. THE LEARNED CIT(A) ERRED IN REJECTING THE GROUND AGAINST INITIATION OF PROCEEDINGS U/S 147 WITHOUT APPRECIAT ING THE FACT THAT THE SAME IS INITIATED IN VIOLATION OF PROVISO TO SECTION 147 AND RELYING ON DECISIONS WHICH ARE NOT SUCH PROVISO . 3. THE LEARNED CIT(A) UPHOLDING THE ACTION OF THE A O IS NOT ALLOWING THE CLAIM OF INTEREST ON SUSPENSE ACCOUNT ON MERE GROUND THAT ITAT HAS HELD THE SAME TO BE NOT ALLOWA BLE WITHOUT 2 ITA NO 1728 TO 1731/HYD/2011 M/S GAYATRI SUGARS LTD. VERIFYING AS TO WHETHER SUCH ORDER IS SERVED ON THE ASSESSEE OR NOT AND WHETHER THE SAME IS IN ACCORDANCE WITH LAW OR NOT. 4. THE LEARNED CIT(A) FURTHER FAILED TO APPRECIATE THE FACT THAT THE ITAT HAS ALLOWED THE APPEAL OF THE DEPARTMENT E X-PARTE WITHOUT CONSIDERING THE DECISION THAT IS RELIED BY THE LEARNED CIT(A) WHILE ALLOWING THE APPEAL AND THEREFORE OUGH T TO HAVE GIVEN AN OPPORTUNITY TO THE ASSESSEE TO MAKE SUBMIS SIONS ON SUCH ORDER. 5. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME O F HEARING. 3. AS CAN BE SEEN, GROUND NOS. 1 & 5 BEING GENERAL GROUNDS DO NOT REQUIRE ANY SPECIFIC ADJUDICATION. 4. GROUND NO. 2 IS ON A LEGAL ISSUE CHALLENGING THE VALIDITY OF PROCEEDING INITIATED U/S 147 OF THE ACT. SINCE FACT S RELATING TO THE AFORESAID ISSUE ARE BEING COMMON IN RESPECT OF ALL APPEALS, FOR THE SAKE OF CONVENIENCE, WE REFER TO THE FACTS INVOLVED IN ITA NO. 1728/HYD/2011 RELATING TO AY 2002-03. 5. BRIEFLY THE FACTS ARE, ASSESSEE A COMPANY IS ENG AGED IN THE BUSINESS OF MANUFACTURE AND SALE OF WHITE CRYSTAL S UGAR (WCS). FOR THE AY UNDER DISPUTE, ASSESSEE FILED ITS RETURN OF INCOME DECLARING LOSS OF RS. 14,39,64,985 AND ASSESSMENT IN CASE OF ASSESSEE WAS COMPLETED U/S 143(3) OF THE ACT VIDE ASSESSMENT ORD ER DATED 13/12/2004 ACCEPTING THE INCOME RETURNED. SUBSEQUEN TLY, ON THE BASIS OF INFORMATION AVAILABLE WITH HIM, AO REOPENE D THE ASSESSMENT BY ISSUING NOTICE U/S 148 OF THE AY ON 31/03/2009. ASSESSMENTS WERE REOPENED FOR THE REASON THAT ASSESSEE HAS NOT OFFER ED TO TAX AN AMOUNT OF RS. 59.30 LAKHS INASMUCH AS ASSESSEE HAS DEBITED AN AMOUNT OF RS. 380.40 CRORES TOWARDS INTEREST PAYMEN T TO THE P&L A/C, WHICH INCLUDED AN AMOUNT OF RS. 59.30 LAKHS BEING T HE AMOUNT ATTRIBUTED FROM THE RESERVE I.E. INTEREST SUSPENSE ACCOUNT. AFTER COMPLYING TO THE NOTICE ISSUED U/S 148, ASSESSEE DU RING THE REASSESSMENT PROCEEDING, OFFERED ITS EXPLANATION TO THE QUERY RAISED BY AO AS TO WHY THE AMOUNT OF RS. 59.30 LAKH CANNOT BE CONSIDERED 3 ITA NO 1728 TO 1731/HYD/2011 M/S GAYATRI SUGARS LTD. AS INCOME OF ASSESSEE. AO, HOWEVER, HAVING NOT FOU ND MERIT IN THE SUBMISSIONS OF ASSESSEE, COMPLETED THE ASSESSMENT U /S 143(3) READ WITH SECTION 147 OF THE ACT VIDE ORDER DATED 30/09/ 2009 HOLDING THAT IT IS A LIABILITY ON CAPITAL ACCOUNT AND NOT ON REVENU E ACCOUNT. HE FURTHER OBSERVED THAT EVEN IF IT IS CONSIDERED AS A REVENUE LIABILITY, THE SAME IS NOT ALLOWABLE U/S 43B(D) AS NO PAYMENT HAS BEEN MADE TO FINANCIAL INSTITUTIONS DURING THE YEAR. ACCORDINGLY , HE ADDED AN AMOUNT OF RS. 59,29,333 TO THE INCOME OF ASSESSEE. BEING AGGRIEVED OF ASSESSMENT ORDER SO PASSED, ASSESSEE PREFERRED A PPEAL BEFORE THE LEARNED CIT(A). 6. CHALLENGING THE VALIDITY OF THE PROCEEDING INITI ATED U/S 147, ASSESSEE SUBMITTED BEFORE THE CIT(A) THAT AS THE AS SESSEE HAS MADE FULL AND TRUE DISCLOSURE AND ALL INFORMATIONS WERE AVAILABLE ON RECORD AT THE TIME OF ORIGINAL ASSESSMENT, REOPENING OF A SSESSMENT U/S 147 IS INVALID. IT WAS FURTHER CONTENDED BY ASSESSEE TH AT AS REOPENING OF ASSESSMENT IS ON A CHANGE OF OPINION, IT IS INVALID IN LAW. CIT(A), HOWEVER, REJECTED ALL CONTENTIONS OF ASSESSEE WITH REGARD TO VALIDITY OF PROCEEDING U/S 147 WITH THE FOLLOWING OBSERVATIO NS: 6.1 AS MAY BE SEEN FROM GROUNDS OF APPEAL, REFERRED TO IN PARA 4 ABOVE, THE APPELLANT HAS RAISED TWO ISSUES IN THIS CASE. AS THE FIRST ISSUE, IT HAS OBJECTED TO REOPENING OF ASSESSMENT U /S 147 OF THE ACT IN THIS CASE. WITH REFERENCE TO- THIS PLEA, WHE N ASKED BY ME DURING HEARING OF APPEAL-WHETHER THE APPELLANT' HAS RAISED ANY OBJECTION BEFORE AO DURING THE ASSESSMENT PROCEEDIN GS,' THE ID. AR. REPLIED IN THE NEGATIVE. UNDER THE CIRCUMSTANCE S; IN MY CONSIDERED VIEW, THE APPELLANT CANNOT RAISE SUCH PL EA DURING THIS APPEAL. HENCE THE SAID GROUND NUMBER 4 IS LIABLE TO BE REJECTED. 6.2 FURTHER, AS MAY' BE SEEN FROM THE SAID GROUND, IT IS STATED THAT ALL INFORMATION WAS ALREADY DISCLOSED BY THE COMPAN Y IN THE ANNUAL REPORT AND IN THE ASSESSMENT PROCEEDINGS. DURING HE ARING APPEAL, IN THE WRITTEN SUBMISSIONS FILED BY ID. AR, IT WAS SUBMITTED THAT THE COMPANY HAS DISCLOSED THE ABOVE TRANSACTIONS RELATI NG TO CRPS AND ITS EFFECT ON THE ACCOUNTS FOR THE FUTURE YEARS BY WAY OF DISCLOSURE IN THE NOTES TO ACCOUNTS IN THE ANNUAL R EPORT. IT WAS STATED, HENCE THERE HAS BEEN FULL AND FAIR DLSCLOSU RE IN THE ACCOUNT. IT IS FURTHER STATED SINCE ABOVE INFORMATION WAS AV AILABLE ON RECORD, 4 ITA NO 1728 TO 1731/HYD/2011 M/S GAYATRI SUGARS LTD. IT IS NOT A FIT CASE OF REOPENING OF ASSESSMENT. IT IS FURTHER CONTENDED THAT APPARENTLY THERE WAS A CHANGE OF OPI NION ON THE PART OF THE AO, WHICH LED TO REOPENING OF ASSESSMEN T IN THIS CASE. I HOWEVER, SUCH SUBMISSIONS OF THE APPELLANT ARE NOT CORRECT. AFTER GOING THROUGH THE SECOND ANNUAL REPORT FOR THE YEAR 2001-02, WHICH WAS FILED ALONG WITH THE RETURN OF INCOME FIL ED ON 30.10.2002, IT IS SEEN THAT, IT IS ONLY AT POINT NO .7 .OF THE ACCOUNTING POLICIES & NOTES ON ACCOUNTS (SCHEDULE N) THAT THE APPELLANT HAS MERELY MENTIONED ABOUT 'INTEREST SUSP ENSE ACCOUNT'. IN A BRIEF NOTE AT PAGE 25 OF THE SAID ANNUAL REPORT, IT IS MENTIONED, THE INTEREST SUSPENSE AMOUNT REPRESENTIN G THE NET PRESENT VALUE OF DIFFERENTIAL INTEREST ON IDBI AND IFCI LTD. TERM LOANS DUE TO REDUCTION OF RATE OF INTEREST ON ACCOU NT OF RESTRUCTURING IS BEING CHARGED TO PROFIT & LOSS ACCOUNT OVER THE TENURE OF THE TERM LOANS. FROM SUCH NOTE, IT CANNOT BE SAID THAT THE APPELLANT HAS MADE FULL AND TRUE DISCLOSURE OF ALL MATERIAL FACTS IN THE RETURN OF INCOME FILED BY IT EARLIER. FURTHE R, IN THE AUDIT REPORT IN FORM NO. 3CD, INCLUDING THE ANNEXURE TO T HE SAID REPORT, THERE IS NO DISCLOSURE OF ANY AMOUNT WITH REGARD TO SUCH CLAIM TOWARDS INTEREST SUSPENSE ACCOUNT. EVEN IN THE STAT EMENT OF TOTAL INCOME FILED WITH THE RETURN, THE APPELLANT HAS NOT FURNISHED ANY FACTUAL INFORMATION / CLARIFICATION WITH REGARD TO SUCH CLAIM. FURTHER, AFTER GOING THROUGH THE ASSESSMENT RECORDS, I FIND THAT THE APPELLANT HAS NOT FURNISHED ANY FACTUAL INFORMATION / CLARIFICATION WITH REFERENCE TO SUCH CLAIM. HAVING REGARD TO SUCH FACTS AND IN THE ABSENCE OF ANY CLARIFICATION FROM THE APPELLANT DURING THE APPELLATE PROCEEDINGS, IT CLEARLY SHOWS THAT THERE WAS FAILURE ON THE PART OF THE APPELLANT TO DISCLOSE FULLY AND TRU LY ALL MATERIAL FACTS NECESSARY FOR THIS ASSESSMENT YEAR 2002-03. UNDER T HE CIRCUMSTANCES AND HAVING REGARD TO THE REASONS RECO RDED BY THE AO BEFORE ISSUANCE OF NOTICE U/S 148 OF THE ACT, RE OPENING OF THE ASSESSMENT U/S 147 OF THE ACT, IN MY VIEW, IS JUSTI FIED IN THIS CASE. 7. THE LEARNED AR SUBMITTED BEFORE US THAT IN THE P RESENT CASE ADMITTEDLY INITIATION OF PROCEEDING U/S 147 OF THE ACT IS AFTER EXPIRY OF FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR S IN CASE OF AY 2002-03 AND 2003-04, THEREFORE, PROVISO TO SECTION 147 IS ATTRACTED. LD. AR SUBMITTED EVEN IN CASE OF AY 2004-095 AND 20 05-06, THOUGH REOPENING IS WITHIN FOUR YEARS, STILL AS THERE WAS NO TANGIBLE MATERIAL BEFORE AO AT THE TIME OF RECORDING OF REASONS TO SH OW THAT INCOME HAS ESCAPED ASSESSMENT AND AO HAS REOPENED THE ASSE SSMENT ON THE BASIS OF INFORMATION SUBMITTED BY ASSESSEE IN T HE RETURN OF INCOME AND FINAL ACCOUNTS, ON EXAMINING WHICH ORIGI NAL ASSESSMENTS WERE COMPLETED U/S 143(3), EXERCISE OF POWER U/S 14 7 IS INVALID. LD. 5 ITA NO 1728 TO 1731/HYD/2011 M/S GAYATRI SUGARS LTD. AR SUBMITTED, NOTE NO. 7 OF ANNUAL REPORT FOR AY 20 06-097 WHICH FORMED THE BASIS FOR REOPENING, AS PER REASONS RECO RDED ALSO FINDS PLACE ON ANNUAL REPORTS OF ALL EARLIER ASSESSMENT Y EARS. THE AOS WHILE COMPLETING ASSESSMENTS FOR EARLIER ASSESSMENT YEARS HAVE ALSO EXAMINED THIS ASPECT. 7.1 NARRATING THE FACTS FOR EACH ASSESSMENT YEAR, L D. AR SUBMITTED, IN THE COMPUTATION OF INCOME FILED ALONG WITH THE R ETURN OF INCOME FOR AY 2002-03, ASSESSEE HAS ADDED BACK INTEREST AMOUNT OF RS. 2,52,23,705 OF IDBI AND RS. 98,55,013 OF IFCI WHILE ARRIVING AT A LOSS OF RS. 14,39,64,985. AS ASSESSEE HAS NOT CLAIMED AN Y DEDUCTION TOWARDS INTEREST ON IDBI AND IFCI TERM LOANS, REOPE NING OF ASSESSMENT FOR DISALLOWING INTEREST OF RS. 59.30 LA KHS BASED ON IMPROPER APPRECIATION OF FACTS WAS TOTALLY UNWARRAN TED. IT WAS SUBMITTED, LIKE IN AY 2006-07, ANNUAL REPORT OF AY 2002-03 ALSO CONTAINED SIMILAR NOTE NO. 7 IN RESPECT OF INTEREST SUSPENSE ACCOUNT. THAT APART, AUDITORS IN ANNEXURE E TO THEIR REPORT HAS SHOWN LIABILITY TOWARDS INTEREST TO IDBI AND IFCI. LD. AR REFERRING TO THE STATEMENT OF INCOME FILED ALONG WITH RETURN OF INCOME FOR AY 200 3-04 SUBMITTED, BEFORE ARRIVING AT NET LOSS OF RS. 18,05,80,187 ASS ESSEE CLAIMED INTEREST EXPENDITURE OF RS. 2,52,23,705 FOR IDBI AN D RS. 98,55,013 FOR IFCI. NOTE SIMILAR TO AY 2006-07 WAS ALSO GIVEN IN THE ANNUAL REPORT. IT WAS SUBMITTED, IN COURSE OF THE ORIGINAL ASSESSM ENT PROCEEDING, VIDE QUESTIONNAIRE DATED 23/08/2005 AO SPECIFICALLY ENQUIRED INTO THE INTEREST SUSPENSE ACCOUNT. IN REPLY DATED 12/09/200 5 ASSESSEE EXPLAINED THE NATURE OF INTEREST SUSPENSE ACCOUNT A ND BROUGHT TO THE NOTICE OF AO RESTRUCTURING PROPOSAL OF IDBI AND IFC I. THUS, AO MAKING ENQUIRY AND APPLYING HIS MIND TO THE MATERIA LS ON RECORD COMPLETED ASSESSMENT. IN AY 2004-05 ALSO NOT ONLY I N COMPUTATION OF INCOME, P&L ACCOUNT AND ANNUAL REPORT, ASSESSEE HAS DISCLOSED FULL PARTICULARS OF INTEREST DEBITED TO INTEREST SUSPENS E ACCOUNT, BUT, IN REPLY DT. 26/08/2006 SUBMITTED IN COURSE OF ORIGINA L ASSESSMENT PROCEEDING, ASSESSEE HAS BROUGHT TO THE NOTICE OF A O ENTIRE DETAILS 6 ITA NO 1728 TO 1731/HYD/2011 M/S GAYATRI SUGARS LTD. RELATING TO RESTRUCTURING PACKAGE GRANTED BY IDBI A ND IFCI. LD. AR SUBMITTED, SAME WAS ALSO THE CASE IN AY 2005-06 AS ASSESSEE DISCLOSED FULL PARTICULARS RELATING TO INTEREST DEB ITED TO INTEREST SUSPENSE ACCOUNT IN COMPUTATION OF INCOME AND ANNUA L REPORT. THUS, WHEN THE ASSESSEE IS FOLLOWING THE SAME ACCOUNTING POLICY IN SO FAR AS DEBITING INTEREST TO INTEREST SUSPENSE ACCOUNT I N RESPECT OF LOAN GRANTED BY IDBI AND IFCI FOR ALL THESE YEARS AND WH EN DIFFERENT AOS AFTER MAKING ENQUIRY AND APPLYING THEIR MIND TO THE ISSUE AND FACTS AND MATERIALS ON RECORD HAVE COMPLETED ASSESSMENTS, ONLY BECAUSE IN AY 2006-07 THE AO HAS TAKEN A DIFFERENT VIEW IN RESPECT OF INTEREST DEBITED TO INTEREST SUSPENSE ACCOUNT, REOPENING OF ASSESSMENT ON VERY SAME FACTS AND MATERIALS CONSIDERED AT THE TIM E OF ORIGINAL ASSESSMENT ON A MERE CHANGE OF OPINION IS NOT PERMI SSIBLE. IN SUPPORT OF HIS CONTENTION, LD. AR RELIED ON THE FOL LOWING DECISIONS: 1. CIT VS. KELVINATOR OF INDIA LTD., 320 ITR 561 ( SC) 2. CIT VS. USHAL INTERNATIONAL LTD., 348 ITR 485(F B) (DEL.) 8. THE LEARNED DR, ON THE OTHER HAND, REFERRING TO THE ORIGINAL ASSESSMENT ORDER SUBMITTED THAT THE ORDER PASSED IS CRYPTIC AND BEREFT OF REASONS, THEREFORE, IT CANNOT BE SAID THA T AO HAS EITHER EXAMINED THE ISSUE ON WHICH ASSESSMENT WAS REOPENED OR HAS FORMED ANY OPINION. THEREFORE, IN ABSENCE OF ANY OP INION FORMED BY AO IN THE ORIGINAL ASSESSMENT, THERE CANNOT BE ANY CHANGE OF OPINION. HE SUBMITTED THAT WHEN INCOME HAS ESCAPED ASSESSMENT DUE TO OVERSIGHT OR INADVERTENCE OR A MISTAKE COMMI TTED BY AO, REOPENING OF ASSESSMENT WILL BE VALID. IN SUPPORT O F HIS ARGUMENT, LD. DR RELIED UPON CIT VS. RINKU CHAKARABORTHY, 242 CT R 425 (KAR.) 9. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE ORDERS OF REVENUE AUTHORITIES AS WELL AS OTHER MATERIALS ON RECORD. WE HAVE ALSO GONE THROUGH THE DECISIONS PLACED BEF ORE US BY THE PARTIES. BEFORE GOING INTO THE MERITS OF THE ISSUE, IT IS RELEVANT TO TAKE NOTE OF THE STATUTORY PROVISION FOR REOPENING OF AS SESSMENT. SECTION 7 ITA NO 1728 TO 1731/HYD/2011 M/S GAYATRI SUGARS LTD. 147 OF THE ACT EMPOWERS AO TO REOPEN AN ASSESSMENT IF HE HAS REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX RELATING TO ANY AY HAS ESCAPED ASSESSMENT. HOWEVER, SUBSEQUENT TO F IRST PROVISO TO SECTION 147, CARVES OUT AN EXCEPTION BY PRESCRIBING THAT IN A CASE WHERE AN ASSESSMENT HAS BEEN MADE U/S 143(3) OR U/S 147 NO REOPENING CAN BE MADE AFTER EXPIRY OF FOUR YEARS FR OM THE END OF THE RELEVANT AY UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT IN SUCH AY DUE TO FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETURN U/S 139 OR IN RESPONSE TO NOTICE U/S 142(1) OR U/S 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS N ECESSARY FOR THE ASSESSMENT IN THAT AY. 10. IF WE EXAMINE THE FACTS OF THE PRESENT CASE IN THE LIGHT OF THE AFORESAID STATUTORY PROVISION, IT CAN BE SEEN THAT IN THE PRESENT CASE ASSESSEE HAS NOT ONLY FILED ITS RETURN OF INCOME FO R THE AYS UNDER CONSIDERATION AS PER SECTION 139, BUT ALSO, ASSESSM ENTS IN CASE OF ASSESSEE HAVE BEEN COMPLETED U/S 143(3) OF THE ACT. THEREFORE, AT LEAST FOR THE AYS 2002-03 AND 2003-04, THE FIRST PR OVISO TO SECTION 147 COMES INTO PLAY AS THE REOPENING OF ASSESSMENT IN CASE OF ASSESSEE HAS BEEN MADE AFTER EXPIRY OF FOUR YEARS F ROM THE END OF THE RELEVANT ASSESSMENT YEARS. THAT BEING THE CASE, IT IS NECESSARY TO EXAMINE WHETHER THE OTHER PRE CONDITION OF THE PROV ISO TO SECTION 147 I.E. FAILURE ON THE PART OF ASSESSEE TO DISCLOSE FU LLY AND TRULY ALL MATERIAL FACTS, APPLIES TO THE PRESENT CASE. THERE FORE, TO DECIDE THIS ISSUE, IT IS NECESSARY TO LOOK INTO THE REASONS REC ORDED BY AO WHILE REOPENING ASSESSMENT. THE REASONS RECORDED, WHICH IS COMMON FOR ALL THE ASSESSMENT YEARS, IS REPRODUCED HEREIN FOR CONVENIENCE: IT IS SEEN AT ITEM NO. .7 (INTEREST SUSPENSE ACCOUN T) OF SIGNIFICANT ACCOUNTING POLICIES OF SCHEDULE K FORMI NG PART OF YOUR PRINTED ANNUAL REPORT FOR THE AY 2006-07, 'THE INTE REST SUSPENSE ACCOUNT REPRESENTING THE NET PRESENT VALUE OF DIFFE RENTIAL INTEREST ON IDBI AND IFCI LTD. TERM LOANS DUE TO REDUCTION O F RATE OF INTEREST ON ACCOUNT OF RESTRUCTURING IS BEING CHARGED TO THE P&L ACCOUNT OVER THE TENURE OF THE TERM LOANS'. 8 ITA NO 1728 TO 1731/HYD/2011 M/S GAYATRI SUGARS LTD. AS PER THE IDBI LETTER DATED 22-12-2000 SUBMITTED B Y YOU, THERE HAS BEEN A REDUCTION OF RATE OF INTEREST TO A UNIFORM RATE OF 16.5% PER ANNUM W.E.F.01-10-2000. FURTHER, IN THE S AID LETTER, THE NET PRESENT VALUE OF THE DIFFERENTIAL INTEREST AMOU NT AGGREGATING TO 17.61 MILLION HAS BEEN CONVERTED TO 13% CUMULATIVE REDEEMABLE PREFERENCE SHARES (CRPS) WHICH ARE REDEEMABLE IN TW O INSTALLMENTS. SIMILARLY, THE IDBI HAS CONVERTED THE COMPOUND INTEREST ACCRUED AND DUE UP TO 30-9-2000 AGGREGATIN G TO 22.79 MILLION X 13% CRPS REDEEMABLE IN TWO INSTALLMENTS O N 1-10-2007 AND 1-10-2008. IDBI HAD KEPT THE OPTION TO CONVERT THE ABOVE CRPS INTO EQUITY SHARES AT PAR IT IS NOTICED THAT INTEREST SU SPENSE ACCOUNT WAS DEBITED WITH THE NET PRESENT VALUE OF THE DIFFERENT IAL INTEREST AND THE SAME IS BEING WRITTEN OFF OVER A PERIOD OF 8 YEARS (RESTRUCTURED LOAN PERIOD) STARTING FROM THE ACCOUNTING YEAR 2001-02 A T THE RATE OF RS.59.30 LAKHS PER YEAR STARTING WITH ASSESSMENT YEAR 2002-0 3. THE DIFFERENTIAL INTEREST AMOUNT HAS BEEN CONVERTED INTO A REDEEMABLE PREFERENCE SHARES WITH AN OPTION OF CONV ERTING THEM INTO EQUITY SHARES. THIS TANTARNOUNTS T O CONVERTING THE INTEREST AMOUNT INTO AN INVESTMENT IN THE FORM OF EQUITY. SO , THE REPAYMENT OF REDEEMABLE PREFERENCE SHARE IS A LIABI LITY ON CAPITAL ACCOUNT AND NOT ON REVENUE ACCOUNT. SECONDL Y EVEN IF IT IS CONSIDERED A REVENUE LIABILITY, THE SAME IS NOT ALL OWABLE U/S43B(D), AS NO PAYMENT HAS BEEN MADE TO THE FINAN CIAL INSTITUTION DURING THE YEAR. I, THEREFORE, HAVE REASON TO BELIEVE THAT INCOME CH ARGEABLE TO TAX TO THE TUNE OF RS.59.30 LAKHS HAS ESCAPED AS SESSMENT. THE ASSESSMENT FOR THE AY 2002-03 IS HENCE REOPENED TO BRING THE ESCAPED INCOME TO TAX 11. ON PERUSAL OF THE REASONS RECORDED, IT CAN BE S EEN, AO HAS FORMED HIS BELIEF ON THE BASIS OF ITEM 7 OF SIGNI FICANT ACCOUNTING POLICIES OF SCHEDULE K FORMING PART OF THE ANNUAL REPORT FOR AY 2006-07. HE HAS ALSO REFERRED TO THE LETTER DATED 2 2/12/2000 OF IDBI IN RESPECT OF REDUCTION OF RATE OF INTEREST FROM 21 % TO 16.5% PER ANNUM WITH EFFECT FROM 01/10/2000. ON THE BASIS OF THE AFORESAID INFORMATION, AO HAS FORMED AN OPINION THAT CONVERSI ON OF DIFFERENTIAL INTEREST AMOUNT INTO REDEEMABLE PREFERENTIAL SHARES WITH AN OPTION TO CONVERTING THEM TO EQUITY TANTAMOUNT TO CONVERTING THE INTEREST AMOUNT INTO AN INVESTMENT IN THE FORM OF EQUITY, HE NCE, REPAYMENT OF REDEEMABLE PREFERENTIAL SHARE IS A LIABILITY ON CAP ITAL ACCOUNT AND NOT 9 ITA NO 1728 TO 1731/HYD/2011 M/S GAYATRI SUGARS LTD. ON REVENUE ACCOUNT. HE FURTHER OPINED THAT IF IT IS CONSIDERED AS REVENUE LIABILITY, THE SAME IS NOT ALLOWABLE U/S 43 B(D) AS NO PAYMENT HAS BEEN MADE TO FINANCIAL INSTITUTIONS DURING THE YEAR. 12. FROM THE REASONS RECORDED, AS AFORESAID, IT IS PATENT AND OBVIOUS THAT THERE IS NO ALLEGATION MADE BY AO THAT ALLEGED ESCAPEMENT OF INCOME IS ATTRIBUTABLE TO FAILURE ON THE PART OF ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL F ACTS REQUIRED FOR HIS ASSESSMENT FOR THE AYS UNDER CONSIDERATION. FURTHER , ON A REFERENCE TO THE FINAL ACCOUNTS OF ASSESSEE AND NOTES APPENDE D THERETO FOR THE AYS 2002-03 TO 2006-07, IT APPEARS THAT ASSESSEE IS CONSISTENTLY FOLLOWING THE SAME ACCOUNTING POLICY SO FAR AS DEB ITING THE DIFFERENTIAL AMOUNT OF INTEREST PAYABLE TO IDBI AND IFCI TO THE INTEREST SUSPENSE ACCOUNT. THESE ANNUAL REPORTS CONTAININ G FINAL ACCOUNTS AS WELL AS NOTES ATTACHED THERETO HAVE BEEN SUBMITT ED ALONG WITH THE RETURNS OF INCOME FILED BY ASSESSEE AND ALSO THE CO MPUTATION OF INCOME FOR THE RELEVANT AY CLEARLY INDICATE THAT AS SESSEE HAS MADE FULL AND TRUE DISCLOSURE OF ALL MATERIAL FACTS RELA TING TO THE REDUCTION OF INTEREST AND TRANSFERRING IT TO THE INTEREST SUSPE NSE ACCOUNT. THEREFORE, IT CANNOT BE SAID THAT THERE IS FAILURE ON THE PART OF ASSESSEE IN DISCLOSING FULLY AND TRULY ALL MATERIAL FACTS FOR HIS ASSESSMENT WHICH COULD HAVE ENABLED THE AO TO REOPE N ASSESSMENT AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELE VANT AYS. IN FACT, IN THE REASONS RECORDED ALSO, AO HAS NEITHER MADE ANY ALLEGATION THAT THERE IS FAILURE ON THE PART OF ASSESSEE IN MAKING FULL AND TRUE DISCLOSURE OF MATERIAL FACTS FOR HIS ASSESSMENT NOR HE HAS SPECIFICALLY POINTED OUT THE ISSUES/SUBJECTS ON WHICH ACCORDING TO AO, ASSESSEE HAS NOT MADE FULL AND TRUE DISCLOSURES. IN THE AFO RESAID VIEW OF THE MATTER REOPENING OF ASSESSMENT BEYOND FOUR YEARS FR OM THE END OF RELEVANT AY IS IN VIOLATION OF PROVISION CONTAINED U/S 147 READ WITH FIRST PROVISO. FOR THIS REASON ALONE, INITIATION OF PROCEEDING AT LEAST FOR THE AYS 2002-03 AND 2003-04 IS WITHOUT JURISDICTION AND CONSEQUENTLY ASSESSMENT ORDER PASSED IS VOID AB-INITIO. 10 ITA NO 1728 TO 1731/HYD/2011 M/S GAYATRI SUGARS LTD. 13. EVEN OTHERWISE ALSO, REOPENING OF ASSESSMENT FO R AFORESAID TWO ASSESSMENT YEARS AS WELL AS ASSESSMENT YEARS 2004-0 5 AND 2005-06, WHICH WERE REOPENED WITHIN FOUR YEARS IS NOT VALID FOR FOLLOWING REASONS. WE HAVE ALREADY MENTIONED HEREINBEFORE ASS ESSEE HAS MADE FULL AND TRUE DISCLOSURE OF ALL FACTS RELATING TO DEBITING OF DIFFERENTIAL INTEREST OF IDBI AND IFCI TO THE INTE REST SUSPENSE ACCOUNT NOT ONLY IN THE FINAL ACCOUNTS, BUT, ALSO IN THE CO MPUTATION OF INCOME, P&L ACCOUNT FILED ALONG WITH RETURN OF INCOME. 14. AT THE COST OF REPETITION, WE WOULD LIKE TO OBS ERVE, IN THE REASONS RECORDED AO HAS REFERRED TO NOTE NO. 7 OF S CHEDULE K FORMING PART OF ANNUAL REPORT OF AY 2006-07 WHICH R EADS AS UNDER: THE INTEREST SUSPENSE AMOUNT REPRESENTING THE NET P RESENCE VALUE OF DIFFERENTIAL INTEREST ON IDBI AND IFCI LTD . TERM LOANS DUE TO REDUCTION OF RATE OF INTEREST ON ACCOUNT OF RESTRUCTURING IS BEING CHARGED TO PROFIT AND LOSS ACCOUNT OVER THE T ENURE OF THE TERM LOANS. ON A PERUSAL OF ANNUAL REPORTS FOR AYS 2002-03 TO 2 005-06, IT IS EVIDENT THAT SIMILAR NOTE APPEARS IN ALL OF THEM. F URTHER, IN COURSE OF ORIGINAL ASSESSMENT PROCEEDING FOR AY 2003-04, AO I SSUED A QUESTIONNAIRE TO THE ASSESSEE SEEKING INFORMATION O N VARIOUS ISSUES. ON PERUSAL OF THE QUESTIONNAIRE DATED 23/08/05, A C OPY OF WHICH WAS PLACED BEFORE US, IT APPEARS THE AO IN FACT HAS MAD E ENQUIRY SPECIFICALLY ON THE ISSUE OF INTEREST DEBITED TO TH E INTEREST SUSPENSE ACCOUNT. ASSESSEE IN REPLY DATED 12/09/2005 ALSO FU RNISHED ALL INFORMATIONS AND DETAILS RELATING TO RESTRUCTURING OF INTEREST IN RESPECT OF LOAN ADVANCED BY IDBI AND IFCI. SIMILARLY, REPLY DT. 26/08/2006 FILED BEFORE AO DURING ASSESSMENT PROCEEDING FOR AY 2004-05 INDICATE THAT INFORMATIONS RELATING TO DEBITING INT EREST TO INTEREST SUSPENSE ACCOUNT WAS BROUGHT TO THE NOTICE OF AO. I N AY 2005-06 ALSO THE ANNUAL REPORT DISCLOSED INFORMATION RELATI NG TO DEBITING OF INTEREST TO INTEREST SUSPENSE ACCOUNT. THEREFORE, U NDENIABLE FACTS EMERGING FROM MATERIALS ON RECORD CLEARLY SUGGEST T HAT NOT ONLY 11 ITA NO 1728 TO 1731/HYD/2011 M/S GAYATRI SUGARS LTD. ASSESSEE HAS MADE FULL AND TRUE DISCLOSURE OF MATER IAL FACTS AND SUBMITTED ALL INFORMATIONS RELATING TO RESTRUCTURIN G OF INTEREST PAYMENT BUT THE AOS ALSO IN COURSE OF ASSESSMENT PROCEEDING HAVE EXAMINED THE ISSUE AND APPLIED THEIR MIND TO THE FACTS AND M ATERIALS ON RECORD. IN OTHER WORDS, CONCERNED AOS WHILE COMPLETING ORIG INAL ASSESSMENTS FOR AYS 2002-03 TO 2005-06 WERE CONSCIOUS OF ACCOUN TING POLICY ADOPTED BY ASSESSEE WHILE DEBITING INTEREST TO INTE REST SUSPENSE ACCOUNT, THOUGH, THE ISSUE MAY NOT HAVE BEEN DISCUS SED IN THE RESPECTIVE ASSESSMENT ORDERS. IT IS ALSO CLEAR FROM THE ANNUAL REPORTS, THE SAME ACCOUNTING POLICY IN RESPECT OF RESTRUCTUR ING OF INTEREST PAYMENT IS PERMEATING THROUGH THE ASSESSMENT YEARS 2002-03 TO 2006-07. REASONS RECORDED ALSO DO NOT REFER TO ANY OTHER TANGIBLE MATERIAL, APART FROM THE NOTE APPENDED TO ANNUAL RE PORT WHICH REMAINS SIMILAR FOR ALL ASSESSMENT YEARS. HENCE, IT CAN BE INFERRED THAT NO TANGIBLE MATERIAL HAS COME TO THE POSSESSIO N, AO AFTER COMPLETION OF ORIGINAL ASSESSMENTS WHICH COULD HAVE ESTABLISHED A LIVE LINK OR NEXUS FOR FORMATION OF BELIEF THAT INC OME HAS ESCAPED ASSESSMENT. AS IT APPEARS ON REVIEW/REAPPRAISAL OF SAME FACTS AND MATERIALS WHICH WERE AVAILABLE ON RECORD AND ON THE BASIS OF WHICH ORIGINAL ASSESSMENTS WERE COMPLETED, ACTION FOR REO PENING OF ASSESSMENT U/S 147 HAS BEEN TAKEN. 15. THE HONBLE SUPREME COURT IN CASE OF CIT VS. KE LVINATOR OF INDIA LTD. (SUPRA) AFTER TAKING NOTE OF THE AMENDME NTS MADE TO SECTION 147 OF THE ACT, HELD AS UNDER: THE CONCEPT OF CHANGE OF OPINION ON THE PART OF T HE AO TO REOPEN AN ASSESSMENT DOES NOT STAND OBLITERATED AFT ER THE SUBSTITUTION OF SECTION 147 OF THE IT ACT, 1961, BY THE DIRECT TAX LAWS (AMENDMENT) ACTS, 1987 AND 1989. AFTER THE AME NDMENT, THE AO HAS TO HAVE REASON TO BELIEVE THAT INCOME HA S ESCAPED ASSESSMENT, BUT THIS DOES NOT IMPLY THAT THE AO 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 AO H AS POWER TO REOPEN AN ASSESSMENT, PROVIDED THERE IS TANGIBLE M ATERIAL TO COME TO THE CONCLUSION THAT THERE WAS ESCAPEMENT OF INCOME 12 ITA NO 1728 TO 1731/HYD/2011 M/S GAYATRI SUGARS LTD. FROM ASSESSMENT. REASON MUST HAVE A LINK WITH THE F ORMATION OF THE BELIEF. 16. THE FULL BENCH OF HONBLE DELHI HIGH COURT IN C ASE OF CIT VS. USHA INTERNATIONAL LTD. (SUPRA)ON A CONSPECTUS OF V ARIOUS DECISIONS OF HONBLE SUPREME COURT, INCLUDING CIT VS. KELVINATOR OF INDIA LTD. (SUPRA), AND AS WELL AS DIFFERENT HIGH COURTS, WHIL E EXPRESSING THE MAJORITY VIEW HELD AS UNDER: 39. IN VIEW OF THE ABOVE OBSERVATIONS WE MUST ADD ONE CAVEAT. THERE MAY BE CASES WHERE THE ASSESSING OFFICER DOES NOT AND M AY NOT RAISE ANY WRITTEN QUERY BUT STILL THE ASSESSING OFFICER IN TH E FIRST ROUND/ ORIGINAL PROCEEDINGS MAY HAVE EXAMINED THE SUBJECT MATTER, C LAIM ETC, BECAUSE THE ASPECT OR QUESTION MAY BE TOO APPARENT AND OBVIOUS. TO HOLD THAT THE ASSESSING OFFICER IN THE FIRST ROUND DID NOT EXAMIN E THE QUESTION OR SUBJECT MATTER AND FORM AN OPINION, WOULD BE CONTRARY AND O PPOSED TO NORMAL HUMAN CONDUCT. SUCH CASES HAVE TO BE EXAMINED INDIV IDUALLY. SOME MATTERS MAY REQUIRE EXAMINATION OF THE ASSESSMENT O RDER OR QUERIES RAISED BY THE ASSESSING OFFICER AND ANSWERS GIVEN BY THE A SSESSEE BUT IN OTHERS CASES, A DEEPER SCRUTINY OR EXAMINATION MAY BE NECE SSARY. THE STAND OF THE REVENUE AND THE ASSESSEE WOULD BE RELEVANT. SEVERAL ASPECTS INCLUDING PAPERS FILED AND SUBMITTED WITH THE RETURN AND DURI NG THE ORIGINAL PROCEEDINGS ARE RELEVANT AND MATERIAL. SOMETIMES AP PLICATION OF MIND AND FORMATION OF OPINION CAN BE ASCERTAINED AND GATHERE D EVEN WHEN NO SPECIFIC QUESTION OR QUERY IN WRITING HAD BEEN RAISED BY THE ASSESSING OFFICER. THE ASPECTS AND QUESTIONS EXAMINED DURING THE COURSE OF ASSESSMENT PROCEEDINGS ITSELF MAY INDICATE THAT THE ASSESSING OFFICER MUST HAVE APPLIED HIS MIND ON THE ENTRY, CLAIM OR DEDUCTION ETC. IT M AY BE APPARENT AND OBVIOUS TO HOLD THAT THE ASSESSING OFFICER WOULD NO T HAVE GONE INTO THE SAID QUESTION OR APPLIED HIS MIND. HOWEVER, THIS WOULD D EPEND UPON THE FACTS AND CIRCUMSTANCES OF EACH CASE. 17. APPLYING THE TESTS LAID DOWN IN CASE OF CIT VS. USHA INTERNATIONAL LTD. TO THE FACTS OF THE PRESENT CASE , IT CAN BE SEEN THAT ASSESSEE IN ALL THESE ASSESSMENT YEARS HAS DISCLOSE D FULL PARTICULARS RELATING TO DEBITING OF INTEREST TO INTEREST SUSPEN SE ACCOUNT. EVIDENCES BROUGHT ON RECORD, AT LEAST IN SOME OF TH E ASSESSMENT YEARS ALSO MAKE IT CLEAR THAT AO AFTER EXAMINING TH E ISSUE AND DUE APPLICATION OF MIND TO THE ISSUE HAS COMPLETED THE ASSESSMENT, THOUGH THERE MAY NOT BE ANY REFERENCE TO THE ISSUE IN THE ASSESSMENT ORDERS. HOWEVER, THAT CANNOT BE A GROUND TO CONCLU DE THAT AS AO HAS NOT EXAMINED THE ISSUE, THERE IS NO QUESTION OF FOR MING ANY OPINION. FURTHER, ACCOUNTING TREATMENT GIVEN BY THE ASSESSEE TO RESTRUCTURING 13 ITA NO 1728 TO 1731/HYD/2011 M/S GAYATRI SUGARS LTD. OF INTEREST NOT ONLY IN ITS FINANCIAL STATEMENTS FO RMING PART OF ANNUAL REPORT BUT ALSO IN THE RETURNS FILED FOR ALL THESE ASSESSMENT YEARS IS SO PATENT AND OBVIOUS THAT AN INFERENCE CAN SAFELY BE DRAWN THAT AO WHILE COMPLETING THE ASSESSMENT MUST HAVE APPLIED H IS MIND ON THE CLAIM OF ASSESSEE. THE ALLEGATION BY THE DEPARTMENT THAT AS IN THE ORIGINAL ASSESSMENTS THE AO HAS OVERLOOKED OR NOT E XAMINED THE ISSUE, THERE CANNOT BE ANY FORMATION OF OPINION WHI CH WILL AMOUNT TO CHANGE OF OPINION WHILE REOPENING, IN OUR VIEW, IS UNACCEPTABLE. AS CAN BE SEEN, ORIGINAL ASSESSMENTS FOR THE ASSESSMEN T YEARS UNDER CONSIDERATION HAVE BEEN COMPLETED AFTER SCRUTINY U/ S 143(3) NOT BY THE SAME AO BUT BY DIFFERENT AOS. IT IS HIGHLY IMPR OBABLE THAT EACH OF THE AOS IN SUCCESSIVE ASSESSMENT YEARS HAVE NOT EXA MINED OR OVERLOOKED THIS ISSUE WHEN ASSESSEE HAS DISCLOSED F ULL PARTICULARS REGARDING THE ISSUE IN DISPUTE. ON THE CONTRARY, ON GOING THROUGH THE FACTS AND MATERIALS ON RECORD THE IMPRESSION ONE GE TS IS ONLY BECAUSE THE AO IN ASSESSMENT ORDER PASSED FOR AY 2006-07 HA S TAKEN A DIFFERENT VIEW ON THE ISSUE, ASSESSMENTS FOR THE PR ECEDING ASSESSMENT YEARS HAVE BEEN REOPENED TO UNSETTLE THE ISSUES ALREADY CONSIDERED AND DECIDED IN ORIGINAL ASSESSMENTS COMP LETED AFTER SCRUTINY. 18. ONCE AN ASSESSMENT ORDER IS PASSED U/S 143(3) A FTER SCRUTINY OF BOOKS OF ACCOUNT AND OTHER MATERIALS, IT HAS TO BE PRESUMED THAT AO HAS EXAMINED ALL FACTS AND MATERIALS AND CONCLUD ED ASSESSMENT AFTER DUE APPLICATION OF MIND. THEREFORE, UNLESS TH ERE IS TELL TALE EVIDENCE THAT AO HAS PASSED THE ORDER IGNORING MATE RIAL FACTS ON RECORD OR OVERLOOKING PROVISIONS OF LAW OR UNLESS F URTHER TANGIBLE MATERIAL COMES TO POSSESSION OF AO INDICATING ESCAP EMENT OF INCOME, ACTION U/S 147 OF THE ACT CANNOT BE TAKEN. ASSESSME NT ORDERS PASSED U/S 143(3) CANNOT BE ALLOWED TO BE REOPENED WITH IM PUNITY SO AS TO UNSETTLE A DECISION ALREADY TAKEN. IF IT IS ALLOWED , THEN THERE CANNOT BE A FINALITY TO ASSESSMENT AND ASSESSEES WILL BE E XPOSED TO THE MERCY OF AO. 14 ITA NO 1728 TO 1731/HYD/2011 M/S GAYATRI SUGARS LTD. 19. THOUGH, APART FROM THE DECISIONS RELIED UPON BY LD. AR, THERE ARE A NUMBER OF DECISIONS EXPRESSING SIMILAR VIEW, WE AVOID REFERRING TO ALL OF THEM. THEREFORE, CONSIDERING ALL FACTS AN D MATERIALS IN THE LIGHT OF THE STATUTORY PROVISION AS WELL AS JUDICIA L PRECEDENTS ON THE ISSUE WE ARE OF THE VIEW THAT REOPENING OF ASSESSME NT U/S 147 OF THE ACT IN THE PRESENT CASES ARE NOT VALID. CONSEQUENTL Y, THE ASSESSMENT ORDER PASSED IN PURSUANCE TO SUCH ACTION INITIATED U/S 147 CANNOT ALSO BE SUSTAINED. ACCORDINGLY, WE QUASH THE ASSESS MENT ORDERS PASSED FOR ALL THE AFORESAID ASSESSMENT YEARS. AS W E HAVE QUASHED THE ASSESSMENT ORDERS ON THE LEGAL ISSUE OF REOPENI NG OF ASSESSMENT U/S 147, WE DO NOT FIND IT NECESSARY TO GO INTO THE GROUNDS RAISED BY ASSESSEE IN RESPECT OF MERITS OF DISALLOWANCE MADE AS IT IS OF MERE ACADEMIC INTEREST. 20. IN THE RESULT, APPEALS OF THE ASSESSEE ARE CONS IDERED TO BE ALLOWED. PRONOUNCED IN THE OPEN COURT ON 26 TH NOVEMBER, 2014. SD/- SD/- (P.M. JAGTAP) (SAKTIJI T DEY) ACCOUNTANT MEMBER JU DICIAL MEMBER HYDERABAD, DATED: 26 TH NOVEMBER, 2014 KV COPY TO:- 1) M/S GAYATRI SUGARS LTD., C/O K. VASANTHKUMAR & AV RAGHURAM ADVOCATES, 610, 6 TH FLOOR, BABUKHAN ESTATES, BASHEERBAG HYDERABAD - 1 2) ACIT, CIRCLE 2(3), HYDERABAD 3) CIT(A)-III, HYDERABAD 4)CIT-II, RANGE 3, HYDERABAD 5)THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDER ABAD.