Sammi Reddy Karre, Warangal, Hyderabad V. ITO, Ward-2, Warangal, Warangal

ITA 1753/HYD/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6558 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 23-08-2018
• Assessment Year: 2009-2010
• Appeal Filed On: 30-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N SWAPNA
• Keywords: Opportunity of being heard; Question of law; Assessment record
• Section: 143(3); 147; 131; 68; 6; 263; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER SHRI DUVURU R.L. REDDY, JUDICIAL MEMBER ITA NO. 1753/HYD/2016 ASSESSMENT YEAR: 2009-10 SAMMI REDDY KARRE, WARANGAL PAN ANQPK 6454P VS. INCOME-TAX OFFICER, WARD 2, WARANGAL. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K.C. DEVDAS REVENUE BY : SMT. N. SWAPNA DATE OF HEARING 10/07/2018 DATE OF PRONOUNCEMENT 13/07/2018 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 03/10/2016 OF CIT(A) 3, HYDERABAD FOR AY 20 09-10. 2. BRIEFLY THE FACTS OF THE CASE ARE, ASSESSEE, AN INDIVIDUAL, DERIVING INCOME FROM PETTY SUB-CONTRACT WORKS AND A LSO FROM RUNNING AND PLYING OF GOODS VEHICLES, FILED HIS RETURN OF I NCOME FOR THE AY 2009-10 ON 26/03/2010 ADMITTING AN INCOME OF RS. 1, 69,400/-. THE ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(3) ON 29/ 12/2011. DURING THE COURSE OF ORIGINAL PROCEEDINGS, THE ASSESSEE FI LED DETAILS OF BANK DEPOSITS RELATING TO LOAN TAKEN FROM HIS FRIENDS AN D RELATIVES TO THE EXTENT OF RS. 24 LAKHS. AO CALLED FOR INFORMATION REGARDING CAPITAL GAINS ON SALE OF HOUSE PROPERTY, WHICH WAS NOT ADMI TTED IN THE RETURN OF INCOME, FOR WHICH, ASSESSEE VIDE LETTER DATED 26 /12/2011 SUBMITTED COMPUTATION OF CAPITAL GAINS AND ADMITTED LONG TERM CAPITAL GAINS (LTGC) TO THE EXTENT OF RS. 2,36,625/- BY CONSIDERI NG THE PROPERTY AS 2 ITA NO. 1753/HYD/16 SAMMI REDDY KARRE LANDED PROPERTY ONLY AND DECLARED SALE CONSIDERATIO N AT RS. 3,70,000/-. AT THE TIME OF ORIGINAL ASSESSMENT PROC EEDINGS, AO NOTICED THAT AS PER THE AGREEMENT OF SALE, CONSIDER ATION OF THE PROPERTY WAS SHOWN AT RS. 25 LAKHS AND IN THE REGIS TERED SALE DEED, THE CONSIDERATION WAS SHOWN AT RS. 10,45,000/-. TO VERIFY THE GENUINENESS OF THE CONSIDERATION, AO SUMMONED THE P URCHASER OF THE PROPERTY SHRI B. CHIRANJEEVI U/S 131 OF THE ACT AND HIS SWORN STATEMENT WAS RECORDED ON 29/12/2011. IN THE SUBSEQ UENT STATEMENT GIVEN BY SHRI CHIRANJEEVI, HE ACCEPTED TO HAVE PAID RS. 2 LAKHS AT THE TIME OF INITIAL AGREEMENT SINCE THE HOUSE WAS UNDER CONSTRUCTION AND AN AMOUNT OF RS. 18.50 LAKHS (APPROX..) WAS PAID AF TER COMPLETION OF THE CONSTRUCTION OF THE PROPERTY. HOWEVER, AO PASSE D ORDER U/S 143(3) OF THE ACT BY ACCEPTING THE RETURNED INCOME WITHOUT CONSIDERING THE ABOVE CAPITAL GAINS ON THE SALE OF PROPERTY. 2.1. SUBSEQUENTLY, LD. CIT INVOKING POWERS U/S 263, VERIFIED THE ASSESSMENT RECORDS AND FOUND DISCREPANCIES RELATING TO CAPITAL GAINS, AND ACCORDINGLY, ISSUED NOTICE TO THE ASSESSEE CALL ING FOR EXPLANATION OF THE ASSESSEE ON 26/07/2013. AFTER CONSIDERING TH E SUBMISSIONS OF THE ASSESSEE, LD. CIT SETTING ASIDE THE ORDER OF TH E AO U/S 143(3) AND PASSED ORDER U/S 263 DIRECTING THE AO TO RE-DO THE ASSESSMENT DE- NOVO BY EXAMINING ALL THE CHEQUES AND THE DEPOSITS, THEN, COMPUTE THE INCOME AS PER LAW AFTER APPRECIATING THE FACTS CAREFULLY. 2.2 CONSEQUENT TO THE DIRECTIONS OF THE LD. CIT, TH E AO ISSUED NOTICES TO ASSESSEE AND CALLED FOR INFORMATION AND ACCORDINGLY, THE INFORMATION WAS SUBMITTED BY THE ASSESSEE. THE AO V ERIFIED THE BANK DEPOSITS TO THE EXTENT OF RS. 43,51,403/-, WHICH IN CLUDES INTEREST TO THE EXTENT OF RS. 2,085/-. DURING THE COURSE OF PRO CEEDINGS, THE ASSESSEE REITERATED THE SUBMISSIONS THAT THE INFORM ATION WHAT WAS SUBMITTED BEFORE THE AO AT THE TIME OF ORIGINAL ASS ESSMENT. WITH REGARD TO THE CAPITAL GAINS AND BANK DEPOSITS, FOR WHICH, ASSESSEE REITERATED THAT ASSESSEE HAS TAKEN LOAN FROM FRIEND S AND RELATIVES TO 3 ITA NO. 1753/HYD/16 SAMMI REDDY KARRE THE EXTENT OF RS. 24 LAKHS AND ALSO FURNISHED RELEV ANT CONFIRMATION LETTERS ISSUED BY THE RESPECTIVE LOAN CREDITORS. HE SUBMITTED THAT THE LOAN WAS TAKEN FOR THE PURPOSE OF HIS SONS EDUCATI ON. FURTHER, ASSESSEE HAS ALSO SOLD PROPERTY IN ORDER TO MEET OU T THE EDUCATION EXPENSES. AFTER CONSIDERING THE ABOVE SUBMISSION, A O TOOK THE SALE CONSIDERATION AS RS. 25 LAKHS AND WORKED OUT THE LT GC BY TAKING INDEXED COST OF LAND AND BY ADOPTING CONSTRUCTION V ALUE ESTIMATED AT RS. 300 PER SQ.FT. AND ARRIVED THE LTGC AT RS. 20,0 5,817/-. 2.3 WITH REGARD TO BANK DEPOSITS, AO CONSIDERED THE TOTAL BANK DEPOSITS AT RS. 43,48,556/- AND AFTER GIVING CREDIT TO THE EXTENT OF RS. 25 LAKHS TOWARDS SALE CONSIDERATION, AND BALANCE AM OUNT OF RS. 16,48,556/- WAS TREATED AS UNDISCLOSED INCOME U/S 6 8 OF THE ACT. 3. AGGRIEVED WITH THE ABOVE ORDER, ASSESSEE PREFERR ED AN APPEAL BEFORE THE CIT(A), WHO CONFIRMED THE ORDER OF AO. 4. AGGRIEVED WITH THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE HON'BLE CIT(A) IS ERRONEOUS IN THE LAW AS WELL AS ON FACTS. 2. THE HON'BLE CIT(A) OUGHT TO HAVE OBSERVED THAT T HE ASSESSING OFFICER TRAVELLED BEYOND HIS JURISDICTION IN THE COURSE OF SET ASIDE ASSESSMENT PROCEEDINGS UJS.143(3) RWS 263 OF THE IT ACT WITHOUT CONFINING HIMSELF TO THE DIRECTIONS CONTAINED IN THE ORDER U/S.263 OF THE IT ACT DATED 11.09.2013. 3. THE HON'BLE CIT(A) OUGHT TO HAVE OBSERVED THAT T HE HON'BLE CIT RAISED TWO ISSUES IN THE SHOW CAUSE NOTICE ISSU ED U/S.263 OF THE IT ACT DATED 26.07.2013 AND DIRECTED THE ASS ESSING OFFICER TO EXAMINE THE ISSUES AFRESH AS HE WAS NOT SATISFIED WITH THE EXPLANATION OFFERED BY THE ASSESSEE DURING THE COURSE OF PROCEEDINGS U/S.263 OF THE IT ACT. 4. THE HON'BLE CIT(A) OUGHT TO HAVE OBSERVED THAT T HE SAID SHOW CAUSE NOTICE ISSUED UJS.263 OF THE IT ACT DID NOT MENTION ABOUT THE CASH DEPOSITS FINDING PLACE IN THE BANK A CCOUNT OF THE ASSESSEE AND THEREFORE IT CANNOT BE AN ISSUE FOR CO NSIDERATION DURING THE COURSE OF RE-ASSESSMENT PROCEEDINGS UJS. 143(3) RWS 4 ITA NO. 1753/HYD/16 SAMMI REDDY KARRE 263 OF THE IT ACT. HENCE, THE HON'BLE CIT(A) OUGHT TO HAVE HELD THAT THE ASSESSING OFFICER DID NOT VEST WITH THE JU RISDICTION TO EXAMINE AFRESH THE DEPOSITS APPEARING IN THE BANK A CCOUNT OF THE ASSESSEE. 5. THE HON'BLE CIT(A) ERRED IN UPHOLDING THE COMPUT ATION OF LONG TERM CAPITAL GAIN MADE BY THE ASSESSING OFFICE R AT RS.20,05,817/- AS AGAINST RS.2,36,625/- DECLARED BY THE ASSESSEE AND THEREFORE THE DECISION IS LIABLE TO BE SET ASIDE. 6. THE HON'BLE CIT(A) ERRED IN UPHOLDING THE ADDITI ON OF RS.16,48,556/- TOWARDS UNDISCLOSED INCOME AND THERE FORE THE DECISION IS LIABLE TO BE DELETED. 7. ANY OTHER GROUND WILL BE RAISED AT THE TIME OF H EARING. 5. LD. AR SUBMITTED A FACT SHEET DURING THE COURSE OF HEARING AND SUBMITTED THAT ASSESSEE IS A PETTY SUB-CONTRACTOR A ND ASSESSEE HAS FILED HIS RETURN OF INCOME ON 26/03/2010 DECLARING INCOME OF RS. 1,69,400/-, HOWEVER, ASSESSEE HAS NOT DECLARED ANY CAPITAL GAINS IN THE ORIGINAL RETURN OF INCOME. HE SUBMITTED THAT DU RING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 143(3), THE ASSESSEE ADM ITTED THE CAPITAL GAINS TO THE EXTENT OF RS. 2,36,625/-. HE S UBMITTED THAT ASSESSEE HAS ALREADY SUBMITTED ALL THE INFORMATION BEFORE THE AO AND THE AO AT THE TIME OF ASSESSMENT PROCEEDINGS, SUMMO NED THE PURCHASER AND RECORDED HIS STATEMENT. HE SUBMITTED THAT PURCHASER HAS CLEARLY DECLARED THAT HE HAS PAID ONLY TO THE E XTENT OF RS. 20,50,000/- AND LD. CIT BY INVOKING THE PROVISIONS OF SECTION 263 DIRECTED THE AO TO REDO THE ASSESSMENT WITH REGARD TO CAPITAL GAINS ONLY. HE BROUGHT TO OUR ATTENTION THE ORDER OF CIT U/S 263 TO INDICATED THAT CIT HAS ISSUED NOTICE TO CALL FOR INFORMATION ONLY WITH REGARD TO COMPUTATION OF CAPITAL GAINS AND ACCORDINGLY, HE DI RECTED THE AO TO REDO THE ASSESSMENT BY OBSERVING THAT EARLIER AO HA D NOT EXAMINED THESE ISSUES AT THE TIME OF SCRUTINY THEREBY AN ERROR HA S CREPT IN THE ASSESSMENT. HE, THEREFORE, SUBMITTED THAT ERROR POINTED OUT BY CIT INDICATES ONLY WITH REGARD TO CALCULATION OF CA PITAL GAINS AND AO HAS TRAVELLED BEYOND HIS JURISDICTION TO COMPLETE T HE ASSESSMENT U/S 143(3) R.W.S 263. HE FURTHER SUBMITTED THAT AO HAS ADOPTED RS. 25 5 ITA NO. 1753/HYD/16 SAMMI REDDY KARRE LAKHS AS SALE CONSIDERATION WHEREAS THE PURCHASER H AS GIVEN IN HIS SECOND SWORN STATEMENT THAT HE HAS PAID ONLY RS. 20 ,50,000/-, WHICH WAS RECORDED ON 30/10/2015, BUT, THE REGISTERED DOC UMENT SHOWS THE VALUE OF RS. 10,45,000/-. HE, THEREFORE, CONTENDED THAT THERE CANNOT BE THREE SALE CONSIDERATIONS AND PRAYED THAT THE VA LUE ACCEPTED BY THE PURCHASER SHOULD BE CONSIDERED AS SALE CONSIDER ATION. HE FURTHER SUBMITTED THAT AO HAS ADOPTED RS. 3OO PER SQ.FT. AS COST OF CONSTRUCTION OF THE BUILDING WITHOUT ANY BASIS. HE PROPOSED TO ADOPT REVERSE CALCULATION TO ARRIVE COST OF CONSTRUCTION AT RS. 1,571/- PER SQ.FT. FOLLOWING THE COMPUTATION OF LTGC ADOPTED BY THE AO IN THE ASSESSMENT ORDER, WHICH WAS PLACED ON RECORD. ACCOR DING TO LD. AR, THE LONG TERM CAPITAL GAINS SHOULD BE RS. 4,37,439/ -, HE PRAYED THAT THE ABOVE SHOULD BE ADOPTED. 5.1 WITH REGARD TO ADVANCES, HE SUBMITTED THAT THE ASSESSEE HAS ALREADY SUBMITTED THE REASONS FOR TAKING LOAN FROM HIS FRIENDS AND RELATIVES AND ACCORDINGLY, PLACED ON RECORD THE CON FIRMATION LETTERS FROM THE ABOVE CREDITORS. HE SUBMITTED THAT THIS IS SUE WAS ALREADY CONSIDERED BY THE EARLIER AO AND PASSED THE ASSESSM ENT ORDER AND REACHED ITS FINALITY. HE, THEREFORE, SUBMITTED THAT THE AO CANNOT INVOKE 263 ORDER TO BRING AN ISSUE WHICH WAS ALREAD Y SETTLED, AS ACCORDING TO HIM, IT AMOUNTS TO REVIEW OF THE ORIGI NAL ASSESSMENT ORDER BY THE PRESENT AO. IN THIS REGARD, HE RELIED ON THE FOLLOWING CASE LAW: 1. HOPE TEXTILES LTD. VS. ITO 11 ITD 60 (BOM.) 2. CIT VS. HINDUSTAN COCONUT OIL LTD., 255 ITR 428 (CAL.) 3. CIT VS. D.N. DOSANI, 280 ITR 275 (GUJ.) 4. ITO VS. CHIDAMBARESWARA RAO, 15 ITD 471 (HYD.) 5. N. SEETHARAMAN VS. ACIT, 298 ITR 210 (MAD.) 6. LD. DR, ON THE OTHER HAND, SUBMITTED THAT ASSESS EE HAS NOT CHALLENGED 263 ORDER AND ACCORDINGLY IT REACHED FIN ALITY. NOW, ASSESSEE CANNOT CHALLENGE THE ORDER PASSED U/S 143( 3) RWS 263 AS 6 ITA NO. 1753/HYD/16 SAMMI REDDY KARRE THE ASSESSMENT ORDER WAS PASSED AS PER THE DIRECTIO NS OF CIT. SHE SUBMITTED THAT IN THE ORDER OF CIT, CIT HAS GIVEN C LEAR DIRECTION THAT AO DIRECTED TO EXAMINE ALL THE CHEQUES AND CASH DEP OSITS, THEREFORE, THE ASSESSMENT ORDER WAS PASSED AS PER THE DIRECTIO NS OF CIT. WITH REGARD TO CASH DEPOSITS, SHE HAS SUBMITTED THAT ASS ESSEE HAS NOT PROVIDED THE IDENTITY, GENUINENESS AND CREDITWORTHI NESS OF THE LOAN CREDITORS AND ALSO ALL THE LOAN CREDITORS ARE AGRIC ULTURISTS. THEREFORE, THE AO HAS RIGHTLY INVOKED SECTION 68 OF THE ACT AN D PROPERLY GIVEN EXCESS CREDITS, IF ANY, FROM THE SALE CONSIDERATION TO ARRIVE AT THE UNDISCLOSED INCOME. SHE RELIED ON THE DECISION OF H ONBLE HIGH COURT OF CALCUTTA IN THE CASE OF CIT VS. MAITHAN INTERNAT IONAL, [2015] 375 ITR 123 (CAL.) 6.1 SHE FURTHER SUBMITTED THAT AGREEMENT OF SALE WA S DATED 09/06/2008 AND SUBSEQUENTLY, SALE AGREEMENT WAS REG ISTERED IN THE MONTH OF JULY08, WHICH CLEARLY INDICATES THAT ASSE SSEE HAS SOLD PROPERTY FOR A CONSIDERATION OF RS. 25 LAKHS. 7. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE NOTICE THAT ASSESSEE HAS FILED HIS RETUR N OF INCOME WITHOUT OFFERING CAPITAL GAINS, HOWEVER, AT THE TIME OF ORI GINAL ASSESSMENT, ASSESSEE HAS OFFERED CAPITAL GAINS BY SUBMITTING RE VISED COMPUTATION TO OFFER THE CAPITAL GAINS TO THE EXTENT OF RS. 236 ,625/-. WITH REGARD TO BANK DEPOSITS, ASSESSEE HAS SUBMITTED CLEARLY THAT ASSESSEE HAD TO TAKE LOAN AND SELL THE PROPERTY IN ORDER TO SEND HI S SON ABROAD FOR EDUCATION AND VISA PURPOSES. AT THE TIME OF ORIGINA L ASSESSMENT ITSELF AO NOTICED THAT SALE CONSIDERATION RECORDED IN AGRE EMENT OF SALE WAS RS. 25 LAKHS AND PROPERTY WAS REGISTERED FOR THE VA LUE OF RS. 10,45,000/- AND IN ORDER TO DETERMINE THE CORRECT S ALE CONSIDERATION, HE SUMMONED THE PURCHASER. IN THE STATEMENT RECORD ED, PURCHASER HAS AGREED TO HAVE PAID RS. 20,50,000/-. THEREFORE, THE REGISTERED VALUE CANNOT BE ADOPTED AS SALE CONSIDERATION CONSI DERING THE FACT THAT ASSESSEE AS WELL AS PURCHASER HAS SIGNED MUTUA LLY AGREEING TO 7 ITA NO. 1753/HYD/16 SAMMI REDDY KARRE TRANSACT THIS TRANSACTION AT RS. 25 LAKHS. THERE I S NOTHING ON RECORD TO SHOW THAT ASSESSEE HAS SOLD THE PROPERTY FOR LES S THAN RS. 25 LAKHS, AT LEAST, IT HAS NOT BROUGHT ON RECORD AND, THEREFORE, THE SALE CONSIDERATION HAS TO BE ADOPTED AT RS. 25 LAKHS ONL Y. 7.1 COMING TO THE CALCULATION OF LTGC, WE NOTICE TH AT AO HAS ADOPTED RS. 300 PER SQ.FT. WITHOUT ANY BASIS AND, A T THE SAME TIME, THERE IS NO DISPUTE WITH REGARD TO COST OF PURCHASE . THE INCOME HAS TO BE BASED ON ACTUALS. THE VALUE ADOPTED BY THE AO IS NOT PROPER AS THERE IS NO BASIS FOR SUCH ADOPTION, WHILE, ASSESSE E ALSO SUGGESTED REVERSE MECHANISM OF DETERMINING COST OF CONSTRUCTI ON BASED ON THE CALCULATION ADOPTED BY THE AO. IN OUR CONSIDERED VI EW, AO SHOULD HAVE TAKEN HELP OF DVO AND IT SHOULD HAVE REFERRED TO VALUATION OFFICER FOR THE PROPER VALUATION OF THE COST OF CON STRUCTION. STILL AO CAN REFER THIS MATTER TO THE DVO TO DETERMINE PROPE R VALUE OF THE PROPERTY AND COST OF CONSTRUCTION. ACCORDINGLY, GRO UND NO. 5 RAISED BY THE ASSESSEE ON THIS ISSUE IS ALLOWED FOR STATISTIC AL PURPOSES. 8. GROUND NOS. 2 TO 4 ARE WITH REGARD TO ASSESSMENT U/S 143(3) RWS 263. THE CIT ISSUED NOTICE U/S 263 WITH REGARD TO DISCREPANCIES IN THE DETERMINATION OF CAPITAL GAINS AND IN THE OR DER, THE CIT ALSO DISCUSSED ELABORATELY ON THE ISSUES RELATING TO DE TERMINATION OF CAPITAL GAINS ONLY. SINCE THE ORDER PASSED U/S 143( 3) WAS FOUND TO BE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVEN UE ONLY ON THE DISCREPANCY IN THE ISSUE OF CAPITAL GAINS AND FINAL LY CIT DIRECTED THE AO TO REDO THE SAME DENOVO. ACCORDING TO US, THE WO RD SAME DENOTES THE ISSUE RELATING TO CAPITAL GAINS. APART FROM CAPITAL GAINS THERE WAS NO OTHER DISCUSSION. WE ALSO NOTICE THAT ASSESSEE HAS FILED ALL THE INFORMATION WITH REGARD TO CAPITAL GAINS AS WELL AS DEPOSITS BEFORE THE AO AT THE TIME OF ORIGINAL ASSESSMENT, A S ALL THESE INFORMATIONS WERE BEFORE THE AO, WHO HAS PASSED ORD ER U/S 143(3) WHEREIN THE AO HAS NOT CHALLENGED OR PASSED ANY ADV ERSE COMMENTS ON THE ADVANCES. THEREFORE, IT WILL BE CONSTRUED TH AT AO HAS ACCEPTED 8 ITA NO. 1753/HYD/16 SAMMI REDDY KARRE THE CONTENTION OF THE ASSESSEE IN THE ORIGINAL ASSE SSMENT. THE PRESENT AO CANNOT BRING ANY FRESH ISSUE, WHICH IS A LREADY SETTLED, WHICH AMOUNTS TO REVIEW OF ORIGINAL ASSESSMENT, WHI CH IS NOT PERMISSIBLE UNDER THE LAW. IN THE CASE OF CIT VS. D.N. DOSANI, (SUPRA), ON WHICH RELIANCE PLACED BY THE ASSESSEE, SIMILAR ISSUE CAME FOR CONSIDERATION BEFORE THE HONBLE HIGH COURT AND THE QUESTION OF LAW RAISED WAS AS UNDER: WHETHER, ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE TRIBUNAL WAS RIGHT IN LAW IN HOLDING THAT IN THE FRESH ASSESSMENT ORDE R PASSED IN PURSUANCE OF ORDER OF THE LEARNED COMMISSIONER UNDER SECTION 263 OF THE INCOME TAX ACT, 1961, THE INCOME TAX OFFICER WAS ENTITLED TO CONSID ER ONLY THOSE TWO ITEMS WHICH WERE CONSIDERED BY THE LEARNED COMMISSIONER A ND WAS NOT ENTITLED TO CONSIDER AFRESH ANY OTHER ITEM FOR MAKING ADDITION ? THE HONBLE HIGH COURT HAS HELD AS UNDER: 11. CONSIDERING THE ISSUE FROM A SLIGHTLY DIFFEREN T ANGLE. THE ASSESSEE WAS CALLED UPON BY CIT TO TENDER EXPLANATION QUA TWO IT EMS MENTIONED IN THE SHOW CAUSE NOTICE. ON A PLAIN READING OF SECTION 263(1) OF THE ACT, IT IS APPARENT THAT THE CIT COULD NOT HAVE TREATED ANY FU RTHER ITEM OR PART OF THE ASSESSMENT ORDER AS BEING ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE WITHOUT GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD. THEREFORE, WHAT THE CIT HIMSELF COULD NOT HAVE DONE , CANNOT BE PERMITTED TO BE DONE BY THE ASSESSING OFFICER WHILE GIVING EFFEC T TO THE ORDER UNDER SECTION 263 OF THE ACT. IT IS NECESSARY TO BEAR IN MIND THAT P OWERS OF REVISION CAN BE EXERCISED ONLY BY THE CIT AND THEREFORE, THE ASSESS ING OFFICER CANNOT, UNDER THE GUISE OF FRAMING FRESH ASSESSMENT, EXERCISE THE SAID POWERS IN RELATION TO OTHER ITEMS FORMING PART OF THE ASSESSMENT RECORD. THE PROVISION WHICH PERMITS EXERCISE OF JURISDICTION UNDER SECTION 263 OF THE ACT IN THE FIRST INSTANCE REQUIRES THE CIT TO CALL FOR AND EXAMINE T HE RECORD OF ANY PROCEEDING UNDER THE ACT. THE LOGICAL PRESUMPTION I S, THEREFORE, THAT BEFORE ISSUANCE OF SHOW CAUSE NOTICE UNDER SECTION 263 OF THE ACT, THE CIT HAS EXAMINED THE RECORD, AND FOUND PRIMA FACIE THAT THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE R EVENUE ONLY IN RELATION TO THE ITEMS MENTIONED IN THE SHOW CAUSE NOTICE. FOR T HE ASSESSING OFFICER, TO SUBSTITUTE HIS OPINION IN PLACE OF THE OPINION OF C IT IS NOT ENVISAGED BY THE PROVISION AND THEREFORE ALSO, ACTION OF THE ASSESSI NG OFFICER IN EXPANDING SCOPE OF CONSEQUENTIAL ASSESSMENTS CANNOT BE UPHELD . 12. THE SCHEME OF THE ACT HAS PROVIDED DIFFERENT POWERS TO DIFFERENT AUTHORITIES AND THESE ARE REQUIRED TO BE EXERCISED AFTER SATISFYING THE PRE- 9 ITA NO. 1753/HYD/16 SAMMI REDDY KARRE REQUISITE CONDITIONS AND JURISDICTIONAL FACTS. THE ASSESSING OFFICER CAN DISTURB / RE-OPEN A FINALIZED ASSESSMENT BY INVOKIN G HIS POWERS EITHER UNDER SECTION 154 OR UNDER SECTION 147 OF THE ACT, PROVIDED HE CAN SHOW THAT THE NECESSARY REQUIREMENTS ARE FULFILLED. IF, WHAT REVENUE CONTENDS TODAY, IS ACCEPTED, THESE AND OTHER SUCH PROVISIONS WHICH EMPOWER DIFFERENT AUTHORITIES TO EXERCISE JURISDICTION AT DIFFERENT P OINT OF TIME IN DISTINCT SETTINGS WOULD BE RENDERED OTIOSE AND THAT CAN NEVE R BE THE LEGISLATIVE INTENT. IT IS ALMOST AKIN TO PROVIDING SEPARATE KEYS FOR SE PARATE LOCKED DOORS AND THE PERSON WANTING TO OPEN A PARTICULAR DOOR IS REQUIRE D TO APPLY THE CORRECT KEY WHICH MATCHES THE CONCERNED LOCK. THEREFORE, IN PRO CEEDINGS, TO GIVE EFFECT TO ORDER UNDER SECTION 263 OF THE ACT, THE ASSESSING OFFICER CANNOT BE PERMITTED TO UNDERTAKE AN EXERCISE NOT WARRANTED BY THE LEGISLATIVE SCHEME. FROM THE ABOVE RATIO LAID DOWN BY THE HONBLE GUJAR AT HIGH COURT, IT IS CLEAR THAT AO HAS TO FOLLOW THE DIRECTIONS AS PE R THE ORDER PASSED U/S 263 AND CANNOT GO BEYOND THE DIRECTIONS AND ALS O CANNOT BRING ANY FRESH ISSUE, WHICH IS ALREADY SETTLED, WHICH IN TURN, AMOUNTS TO REVIEW OF HIS OWN ORDER. THEREFORE, THE ADDITION OF RS. 16,45,556/- MADE AS UNDISCLOSED INCOME IS DIRECTED TO BE DELET ED AS THIS ISSUE WAS ALREADY SETTLED AND REACHED ITS FINALITY AND TH IS ISSUE WAS NEVER PART OF 263 ORDER. THE CASE LAW RELIED ON BY THE LD . DR ARE DISTINGUISHABLE TO THE FACTS OF THE CASE UNDER CONS IDERATION. ACCORDINGLY, GROUND NOS. 2 TO 4 & 6 ARE ALLOWED. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS DECIDED AS UNDER: 1. GROUND NOS. 1 & 7 ARE GENERAL IN NATURE, HENCE, NEED NO ADJUDICATION. 2. GROUND NOS. 2 TO 4 & 6 ARE ALLOWED. 3. GROUND NO. 5 IS ALLOWED FOR STATISTICAL PURPOSES . PRONOUNCED IN THE OPEN COURT ON 13 TH JULY, 2018. SD/- SD/- (DUVURI R.L. REDDY) (S. RIFAUR RA HMAN) JUDICIAL MEMBER A CCOUNTANT MEMBER HYDERABAD, DATED: 13 TH JULY, 2018 KV 10 ITA NO. 1753/HYD/16 SAMMI REDDY KARRE COPY TO:- 1) SHRI KARRE SAMMI REDDY, C/O B. NARSING RAO & CO., CAS., PLOT NO. 554, ROAD NO. 92, JUBILEE HILLS, HYD. 96 2) ITO, WARD NO. 2, HYDERABAD. 3) CIT(A) 3, HYDERABAD. 4) PR. CIT - 3, HYD. 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD. 6) GUARD FILE S.NO DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR SR.P.S/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./ P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER