Venkateshwara Holographic Films(P) Limited, Hyderabad V. Dy. Commissioner of Income Tax , Central Circle-2(2), Hyderabad

ITA 1916/Hyd/2018

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 5956 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2009-2010
• Appeal Filed On: 17-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Keywords: Capital Gains

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “A” : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA No. A.Y. Appellant Respondent 1915/Hyd/18 2008-09 Venkateshwara Holographic Films (P) Limited, Hyderabad [PAN: AACCV1082A] Deputy Commissioner of Income Tax, Central Circle-2(2), Hyderabad 1916/Hyd/18 2009-10 1917/Hyd/18 2010-11 For Assessee : Shri P.Murali Mohan Rao, AR For Revenue : Shri Rajat Mitra, DR Date of Hearing : 20-07-2021 Date of Pronouncement : 21-12-2021 O R D E R PER S.S.GODARA, J.M. : These three assessee’s appeals for AYs.2008-09, 2009-10 & 2010-11 arise from the CIT(A)-12, Hyderabad’s separate order(s); all dated 12-07-2018 passed in appeal Nos.10022, 10024 & 10025/2017-18, involving proceedings u/s.147 r.w.s.143(3) of the Income Tax Act, 1961 [in short, ‘the Act’]; respectively. Heard both the parties. Case files perused. 2. Coming to assessee’s first and foremost substantive ground that both the lower authorities have erred in law and on facts in taking recourse to Section 148/147 re-opening ITA Nos.1915, 1916 & 1917/Hyd/2018 :- 2 -: mechanism, we note that the Assessing Officer had recorded the following identical reason that this taxpayer’s taxable income had escaped assessment: “The assessee filed its return of income for A.Y.2008-09 on 10-4-2009 admitting income of Rs.59,43,510/-. The said return of income was accepted u/s.143(1) and no scrutiny assessment was done. However, on enquiries by the Investigation Wing in the case of M/s.Tirumala Trading, it is noticed that some of the Kolkata based companies made investments in the assessee company in the form of share capital. The shares allotted to these companies were transferred to other companies and those were also from Kolkata, in the subsequent years and finally these shares were purchased by Directors and family members of the group. The shares allotted to the Kolkata Companies at a premium in the range of Rs.25 to 35 whereas the shares transferred in the name of family members of the Directors of the group was at Rs.5. On enquiries at the given address of the concerns to whom shares were allotted and subsequent transfers made by this group in them. It was found that no concern was running from the said premises and no person was able to provide any information about these concerns. These findings have been put before the assessee Managing Director Shri Narendra Kumar Goel, who could not provide any plausible explanation. Hence, the assessee-company has not admitted any income from business/Capital Gains. In the absence of proper explanation and from the outcome of the enquiries it is crystal clear that the group brought dubious investments in the form of share capital from the concerns of non-existing entities (paper companies) at the address as provided by the group” 3. Learned departmental representative vehemently contended during the course of hearing that the impugned re-opening reasons are indeed based on the department’s Investigation Wing’s report on enquiries carried out in case of M/s.Tirumala Trading. He sought to buttress the point that the Assessing Officer had duly identified the real beneficiaries as well who happen to be relatives of the assessee’s directors. ITA Nos.1915, 1916 & 1917/Hyd/2018 :- 3 -: 4. We find no merit in Revenue’s foregoing contentions. There could be hardly any dispute that we are deciding legality of the Assessing Officer’s re-opening reasons which could not be subjected to any addition/deletion or substitution, as the case may be, subsequently even if it emerges that there existed sufficient material in support of the department. As per Hindustan Lever Ltd., Vs. R.B. Wadkar [268 ITR 332] (Bom). And that such re-opening reasons have to be read on standalone basis only. 5. We proceed with the very reasoning herein as well to note that there is no material placed on record at all from the departmental side as to how the assessee inter alia is related to M/s.Tirumala Trading and in what manner and in whose favour, the very share premium had been ploughed back in the director’s relatives namely, Mr. Rajat Mitra, referred to the Assessing Officer’s enquiries as well which again nowhere forms part of record before us. Learned department representative could hardly dispute before us that the above extracted reopening reasons are vague ones only than specifically based on the corresponding tangible material in this backdrop. It is accordingly concluded that the Assessing Officer’s foregoing re-opening reasons are not liable to be sustained. The same stand quashed. All other pleadings on merits in the three instant appeals are rendered academic. 6. We lastly acknowledge that although the instant lis is being decided after a period of 90 days from the date of hearing as per Rule 34(5) of the IT(AT) Rules 1963, the same ITA Nos.1915, 1916 & 1917/Hyd/2018 :- 4 -: however, does not apply in the covid lockdown situation as per hon'ble apex court’s recent directions dated 23-09-2021 “IN RE: COGNIZANCE FOR EXTENSION OF LIMITATION” have excluded all prescribed limitations from 15-03-2020 to 03-10- 2021 in view of Covid-19 pandemic outbreak. 7. These assessee’s three appeals are allowed in above terms. A copy of this common order be placed in the respective case files. Order pronounced in the open court on 21 st December, 2021 \ Sd/- Sd/- (LAXMI PRASAD SAHU) (S.S.GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Hyderabad, Dated: 21-12-2021 TNMM ITA Nos.1915, 1916 & 1917/Hyd/2018 :- 5 -: Copy to : 1.Venkateshwara Holographic Films (P) Limited, C/o. P.Murali & Co., Chartered Accountants, 6-3-655/2/3, 1 st Floor, Somajiguda, Hyderabad. 2.Deputy Commissioner of Income Tax, Central Circle-2(2), Hyderabad. 3.CIT(A)-12, Hyderabad. 4.Pr.CIT(Central)-Hyderabad. 5.D.R. ITAT, Hyderabad. 6.Guard File.