KLR Industries Ltd., Hyd, Hyderabad V. DCIT, Circle-2(1), Hyderabad, Hyderabad

ITA 272/HYD/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6387 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 08-03-2016
• Court: TRIBUNAL
• Department Lawyers: K DEVARATHNA KUMAR
• Assessee Lawyers: S RAMA RAO
• Keywords: Assessment record; Revenue expenditure
• Section: 143(3); 148; 37; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 272/HYD/2016 ASSESSMENT YEAR: 2008-09 KLR INDUSTRIES LTD., HYDERABAD [PAN: AABCK7920K] VS DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2(1), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI S. RAMA RAO, AR FOR REVENUE : SHRI K. DEVARATHNA KUMAR, DR DATE OF HEARING : 05-07-2016 DATE OF PRONOUNCEMENT : 19-08-2016 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF TH E PR. COMMISSIONER OF INCOME TAX-2, HYDERABAD, DATED 21-01-2016 U/S. 263 OF THE INCOME TAX ACT [ACT]. 2. ON PERUSAL OF THE ASSESSMENT RECORD IN THE CASE OF ASSESSEE, LD. CIT NOTICED THAT ASSESSEE FILED ITS RETURN OF INCOME ON 30-09-2008 DECLARING TOTAL INCOME OF RS. 6,33,24,645/ -. ORIGINAL ASSESSMENT U/S. 143(3) WAS COMPLETED ON 21-12-2010 B Y ASSESSING THE TAXABLE INCOME AT RS. 6,85,66,237/-. S UBSEQUENTLY, I.T.A. NO. 272/HYD/2016 KLR INDUSTRIES LTD., :- 2 -: THE ASSESSMENT WAS REOPENED BY ISSUE OF A NOTICE U/S. 148 AND REASSESSMENT WAS COMPLETED U/S. 143(3) R.W.S. 147 ON 29-11-2013 ACCEPTING THE ASSESSED INCOME AT RS. 6,85,55,237/-. LD. CIT WAS OF THE OPINION THAT VARIOUS ISSUES FOR WHICH THE ASSESS MENT WAS REOPENED WERE NOT EXAMINED BY THE ASSESSING OFFICER ( AO) AND COMPLETED THE ASSESSMENT WITHOUT DUE EXAMINATION OF THE ISSUES. HE HAS CONSIDERED THE FOLLOWING ISSUES IN THE SHOW CA USE NOTICE: (A) THE ASESSEE HAS DEBITED AN AMOUNT OF RS.64,20,5 20/- ON ACCOUNT OF PRODUCT DEVELOPMENT EXPENDITURE WHICH WA S CLAIMED AS REVENUE EXPENDITURE. VERIFICATION OF THE LEDGER EXT RACTS REVEALED THAT THE EXPENDITURE SO INCURRED WAS NOT RELATED TO THE PRES ENT YEAR RELEVANT TO THE AY 2008-09 BUT IT RELATED TO THE FY 2005-06 RELEVAN T TO THE AY 2006-07. THEREFORE, IT COULD NOT HAVE BEEN CLAIMED AS REVENU E EXPENDITURE IN AY 2008-09 AND SHOULD NOT HAVE BEEN ALLOWED AS SUCH. E VEN IF THE EXPENDITURE IS INCURRED FOR R&D PURPOSES, THE SAME HAS TO BE CLAIMED AND ALLOWED U/S 35 IN THE YEAR OF INCURRING. (B) DURING THE YEAR, THE ASSESSEE INTRODUCED SHARE APPLICATION MONEY OF RS.5.33 CRORES. DURING THE ASSESSMENT PROC EEDINGS, THE ASSESSEE STATED THAT THOUGH THE MONEY WAS ORIGINALL Y RECEIVED IN AY 2007-08, IT WAS MISTAKENLY GROUPED UNDER TRADE DEPO SITS AND IT WAS RE- GROUPED UNDER SHARE APPLICATION MONEY DURING THE AY 2008-09. ON THIS POINT ALSO, THE RECORD REVEALS THAT PROPER AND DETA ILED VERIFICATION WAS NOT MADE BY THE ASSESSING OFFICER AND THE STATEMENT OF THE ASSESSEE WAS SIMPLY ACCEPTED WITHOUT VERIFICATION. (C) DURING THE YEAR, THE ASSESSEE HAS SHOWN SECURED LOANS OF RS.15,19,88,312/- AND HAD ALSO INVESTED AN AMOUNT O F RS. 10,07,19,080/- FOR ACQUISITION OF LAND. DURING THE RE-ASSESSMENT PROCEEDINGS, ASSESSEE DID NOT PRODUCE ANY EVIDENCE IN SUPPORT OF ITS CLAIM THAT THE SECURED LOANS HAVE BEEN UTILIZED FOR THE P URPOSES FOR WHICH THEY WERE OBTAINED. THE ASSESSING OFFICER HAS SIMPLY ACC EPTED THE CLAIM OF THE ASSESSEE WITHOUT MAKING ANY VERIFICATION AND NOT EV EN VERIFYING THE BANK STATEMENTS. 3. AFTER ISSUING SHOW CAUSE NOTICE TO ASSESSEE AND OBTAINING WRITTEN SUBMISSIONS, LD. CIT DISCUSSED A BOUT THE CLAIM OF PRODUCT DEVELOPMENT EXPENSES, SHARE APPLICAT ION MONEY AND INVESTMENT IN ACQUISITION OF LAND AND ON ALL TH E ISSUES I.T.A. NO. 272/HYD/2016 KLR INDUSTRIES LTD., :- 3 -: HE HAS DIRECTED THE AO TO EXAMINE AFRESH. AS FAR AS DEVELOPMENT EXPENSES ARE CONCERNED, HE HAS GIVEN A FINDING TO RE VISE THE ASSESSMENT ORDER BY ADDING THE AMOUNT OF RS. 59,70,526 /-, WHEREAS WITH REFERENCE TO SHARE APPLICATION MONEY AND ACQUISITION OF LAND, HE HAS DIRECTED THE AO TO MAKE NECESSARY VER IFICATION AND MAKE PROPORTIONATE ADDITIONS/DISALLOWANCES. ASSESSEE WAS AGGRIEVED AND HAS PREFERRED THE PRESENT APPEAL. ASSES SEE RAISED THIRTEEN GROUNDS, OUT OF WHICH GROUND NOS. 7 TO 13 ARE NOT PRESSED DURING THE COURSE OF HEARING. ASSESSEE IS ONLY AGG RIEVED ON ASSUMING JURISDICTION BY THE CIT AND DIRECTING TO ADD THE AMOUNT OF PRODUCT DEVELOPMENT EXPENDITURE TO AN EXTENT OF RS. 64,20,526/-. 4. LD. COUNSEL REFERRING TO THE REASONS RECORDED AT T HE TIME OF REOPENING OF THE ASSESSMENT SUBMITTED THAT THE ASS ESSMENT WAS REOPENED FOR THE PURPOSE OF VERIFICATION CLAIM OF PRODUCT DEVELOPMENT EXPENSES AND AO HAVING SATISFIED ABOUT TH E GENUINENESS OF THE CLAIM HAS ACCEPTED THE SAME. THE REFORE, EXERCISING JURISDICTION BY THE CIT AND DIRECTING TO B E DISALLOWED IS BAD IN LAW. HE RELIED ON THE VARIOUS CASES ON THE IS SUE TO SUBMIT THAT CIT CANNOT EXERCISE JURISDICTION ONCE AO EXAMINE S THE ISSUE AND TAKES AN OPINION. WITH REFERENCE TO THE CLAIM OF P RODUCT DEVELOPMENT EXPENDITURE, REFERRING TO VARIOUS DOCUME NTS AND THE ORDER OF THE CIT, IT WAS SUBMITTED THAT IT IS FOR THE AO/DE PARTMENT TO SEE WHETHER ASSESSEE IS ELIGIBLE FOR DEDUCTION AND TO ALLOW UNDER PROPER SECTION. ASSESSEE HAD DEFERRED RECOGNITION O F EXPENDITURE AND CLAIMED IN THIS YEAR, AS THERE WAS COMMERCIAL EXP EDIENCY IN WRITING OFF THE ABOVE AMOUNT. IT WAS SUBMITTED THAT THE C LAIM WAS CORRECTLY MADE WHICH WAS EXAMINED BY THE AO AND THEREF ORE, I.T.A. NO. 272/HYD/2016 KLR INDUSTRIES LTD., :- 4 -: FOLLOWING THE PRINCIPLES LAID DOWN OF JURISDICTIONAL HIGH COURT IN THE CASE OF SPECTRA SHARES AND SCRIPS PVT. LTD., VS. CI T [354 ITR 35] (AP) AND ALSO HON'BLE SUPREME COURT JUDGMENT IN TH E CASE OF M/S. THE MALABAR INDUSTRIAL CO. VS. COMMISSIONER OF INCOME-TAX, EXERCISE OF JURISDICTION DOES NOT ARISE IN THIS CASE. 5. LD. DR HOWEVER, SUBMITTED THAT AO HAS NOT EXAMINED ANY OF THE ISSUES EVEN THOUGH REOPENED UNDER SECTION 1 47 OF THE IT ACT AND LD. CIT WAS OF THE OPINION THAT ASSESSMENT HA S BEEN COMPLETED WITHOUT DUE EXAMINATION OF THE ISSUES. HE AL SO SUPPORTED THE ORDERS AS ASSESSEE IS NOT PRESSING FOR TH E DIRECTIONS OF THE CIT IN THE OTHER TWO ISSUES TO SUBMIT THAT ASSESSE E CANNOT QUESTION THE EXERCISE OF JURISDICTION, WHEN HAS HE HA S NO OBJECTION FOR THE DIRECTIONS GIVEN ON TWO ISSUES. WITH REFERENC E TO THE PRODUCT DEVELOPMENT EXPENSES WRITTEN OFF, HE HAS SUBMITTE D THAT THERE IS NO EXAMINATION BY THE AO WHICH CAN BE SEEN FR OM THE INCONSISTENCIES IN CLAIM. IT WAS SUBMITTED THAT THE ORDER OF THE CIT IN DIRECTING THE AO TO ENHANCE/ADD IS TO BE UPHELD. 6. WE HAVE EXAMINED THE RIVAL CONTENTIONS AND PERUSED THE DOCUMENTS PLACED ON RECORD. AS FAR AS THE EXCISE S OF JURISDICTION IS CONCERNED, EVEN THOUGH LD. COUNSEL RE LIED ON VARIOUS CASE LAW, ON THE FACT THAT HE HAS NO OBJECTION ON THE DIRECTIONS OF THE CIT ON TWO OTHER ISSUES, ON WHICH GROUNDS WERE RAISED BUT WITHDRAWN, INDICATE THAT CIT HAS CORRECTLY EX ERCISED THE JURISDICTION U/S 263. NOT ONLY THAT FOR THE REASONS DI SCUSSED HEREIN, WE ARE ALSO OF THE OPINION THAT AO HAS NOT EX AMINED THE ISSUES AT ALL. LD COUNSEL SUBMITS THAT AO WAS SATISFI ED WITH THE EXPLANATIONS GIVEN, BUT WE ARE NOT ABLE TO EXAMINE HOW HE COULD I.T.A. NO. 272/HYD/2016 KLR INDUSTRIES LTD., :- 5 -: ARRIVE AT A SATISFACTION WHEN BASIC FACTS ARE NOT EVEN C ONSIDERED. FOR THE SAKE OF RECORD, THE DIRECTION OF THE CIT ON THI S ISSUE AS STATED IN PARA 2A IS REPRODUCED HEREUNDER: CLAIM OF PRODUCT DEVELOPMENT EXPENSES : THE ASSESSEE HAS DEBITED RS. 59,70,526/- TO ITS PRODUCT DEVELOPMENT EXPENDITURE ACCOUNT FOR THE FY 2005-06, RS. 4,50,000/- FOR FY 2006-07 AND CARRIED OVER THE CLOSING BALANCE OF RS.64,20,526/- TO THE FY 2007-08 AND WRI TTEN OFF THE ENTIRE AMOUNT ON 31.03.2008. IN THE FY , 2006-07, THE EXPE NDITURE DEBITED AT RS. 4,50,000/- IS ONLY ON ACCOUNT OF SALARIES PAYAB LE OF R&D DEPARTMENT FOR THE MONTHS APRIL'06 TO AUGUST'2006 AT RS.90,000 /- PER MONTH. THE EXPENDITURE DEBITED IN FY 2005-06 PERTAINS TO PURCH ASE OF CERTAIN MATERIAL, MOSTLY HR BARS/RODS AND DRILLS & DRILL BI TS IN ADDITION TO THE SALARIES AT RS.90,000/- FIXED PER MONTH. THOUGH THE ASSESSEE FURNISHED CERTAIN COPIES OF INVOICES IN SUPPORT OF ITS CLAIM OF PURCHASE OF MATERIAL, THE QUANTITIES/AMOUNTS MENTIONED IN THE INVOICES AR E NOT TALLYING WITH ITS LEDGER ACCOUNT. THE MATERIAL SHOWN TO HAVE BEEN PUR CHASED IS OF THE NATURE THAT IT CAN BE USED FOR ITS NORMAL BUSINESS ACTIVITY OF MANUFACTURE AND TRADE OF DRILLING RIGS AND ACCESSORIES AND TOOL S ONLY. NO DETAILS REGARDING THE SALARIES PAID UNDER PRODUCT DEVELOPME NT EXPENDITURE HEAD WERE FURNISHED. IT WAS SIMPLY CLAIMED THAT THE ASSE SSEE HAD ESTABLISHED A PRODUCT DEVELOPMENT WING. THE EXPENDITURE INCURRE D IN EARLIER YEARS WAS DEFERRED AND DURING THE YEAR UNDER CONSIDERATIO N IT WAS FELT THAT DEVELOPMENT ACTIVITY IN A PARTICULAR LINE UNDERTAKE N NEED NOT BE CONTINUED AND HENCE, THE AMOUNT WAS ENTIRELY WRITTEN OFF. THU S THE ASSESSEE CLAIMED THAT THE EXPENDITURE IS ALLOWABLE EITHER U/ S 35 OR U/S 37 OF THE IT ACT. THUS, THE FACT OF INCURRING THE EXPENDITURE IN THE EARLIER YEARS RELEVANT TO ASSESSMENT YEARS 2006-07 AND 2007-08 (TILL AUGUS T'06) AND NOT IN THE YEAR RELEVANT TO THE PRESENT ASSESSMENT YEAR I.E. 2 008-09 IS UNDISPUTED. THE ASSESSING OFFICER SHOULD HAVE CONSIDERED THIS U NDISPUTED FACT THAT THE EXPENDITURE CLAIMED DID NOT PERTAIN TO THE RELE VANT ASSESSMENT YEAR FOR WHICH HE WAS PASSING THE ASSESSMENT ORDER. THE ASSESSING OFFICER HAS NOT MADE ANY ENQUIRY NOR CONSIDERED THE APPLICA BILITY OF THE PROVISIONS OF SECTION 35 OR SECTION 37 OF THE IT AC T. THE ASSESSEE IN THE REVISION PROCEEDINGS CLAIMED THAT EVEN THE DEFERRED REVENUE EXPENDITURE IS ALLOWABLE AS A DEDUCTION EITHER U/S 35 OR U/S 37 OF THE IT ACT. HOWEVER, NOWHERE IN ITS ACCOUNTS THE ASSESSEE HAS CATEGORIZE D THIS EXPENDITURE AS DEFERRED REVENUE EXPENDITURE NOR THE ASSESSEE HAS S UBSTANTIATED ITS CLAIM THAT IT HAD ACTUALLY UNDERTAKEN CERTAIN RESEARCH WO RK AND MADE EFFORTS TO APPLY SUCH RESEARCH AND THAT THERE EXISTED CERTAIN GROUNDS FOR TAKING A DECISION TO WRITE OFF THE ENTIRE EXPENDITURE IN THE PRESENT AY 2008-09. THE MERE FACT THAT AFTER AUGUST2006, NO EXPENDITURE WA S DEBITED TO THE SO CALLED PRODUCT DEVELOPMENT EXPENSES CLEARLY SHOWS T HAT THERE WAS NO RESEARCH ACTIVITY FOR MORE THAN 1 AND YEARS BEFOR E AN ABRUPT AND ADHOC DECISION WAS TAKEN TO WRITE OFF THIS EXPENDITURE. IT IS CLEAR THAT THE I.T.A. NO. 272/HYD/2016 KLR INDUSTRIES LTD., :- 6 -: ASSESSEE HAS WRITTEN OFF THIS EXPENDITURE ON THE LA ST DAY OF THE PREVIOUS YEAR RELEVANT TO THE AY 2008-09 FOR ITS OWN CONVENI ENCE TO REDUCE ITS TAXABLE PROFIT THOUGH THE EXPENDITURE WAS IN FACT R ELATED TO THE EARLIER YEARS AND IS CLEARLY NOT ALLOWABLE EITHER U/S. 35 O R U/S. 37 OF THE ACT IN THE AY 2008-09. ON THIS ISSUE, THE ASSESSING OFFIC ER IS DIRECTED TO REVISE HIS RE-ASSESSMENT ORDER AND DISALLOW THE CLAIM OF P RODUCT DEVELOPMENT EXPENDITURE WRITTEN OFF. 6.1. WE HAVE ALSO EXAMINED THE LEDGER ACCOUNT COPIES PLACED ON RECORD. AS SEEN FROM THE LEDGER ACCOUNTS, THE EXPENDITURE FROM 01-04-2005 TO 31-03-2006 ON PRODUCT DEVELOPMENT EXPENDITURE AS PER LEDGER FOR THAT YEAR W AS A DEBIT OF RS. 59,70,526/- WHICH WAS ALSO A CLOSING BALANCE AS ON 31-03- 2006. TO THIS AMOUNT, A FURTHER AMOUNT TOWARDS SALARIE S PAID WERE ADDED DURING THE PERIOD 01-04-2006 TO 31-03-2007 , THEREBY ARRIVING AT A CLOSING BALANCE OF RS. 64,20,526. THE SAME AMOUNT WAS CARRIED OVER FROM 01-04-2007 TO 31-03-2008. TH ESE WERE AS PER LEDGER ACCOUNT COPIES FILED BEFORE US IN THE PAP ER BOOK AT PAGE 1 TO 3. HOWEVER, AS SEEN FROM THE BALANCE SHEET AS ON 31-03- 2008, THE OUTSTANDING BALANCE UNDER THE HEAD PRODUCT DEVELOPMENT EXPENSES IN SCHEDULE-5 OF THE BALANCE S HEET UNDER THE HEAD MISCELLANEOUS EXPENDITURE NOT WRITTEN OFF WE RE SHOWN AT RS. 63,10,207/-. HOW A DIFFERENT FIGURE IS FIGURING IN THE BALANCE SHEET, WHEN LEDGER ACCOUNT SHOWS A HIGHER AMOUNT IS N OT EXPLAINED. NOT ONLY THAT, AS SEEN FROM THE P&L A/C, S CHEDULE-12 EVEN THOUGH ASSESSEE HAS WRITTEN OFF AN AMOUNT OF RS.6 4,20,526/- DURING THIS YEAR, THERE WAS A SIMILAR WRITE-OFF OF R S. 7,01,134/- AS ON 31-03-2007, THE SAME OF WHICH IS NOT REFLECTED IN THE LEDGER ACCOUNT. THE LEDGER ACCOUNT ONLY SHOWS A DEBIT OF RS. 4,50,000/- OF SALARIES PAYABLE FROM APRIL TO AUGUST IN YEAR 200 6-07 IN THE ACCOUNT, THEREBY INCREASING THE EARLIER BALANCE OF R S. 59,70,526/- TO RS. 64,20,526/-. HOW THE AMOUNT OF RS. 7,01,134/- WAS I.T.A. NO. 272/HYD/2016 KLR INDUSTRIES LTD., :- 7 -: WRITTEN-OFF FROM THE PRODUCT DEVELOPMENT EXPENSES ALSO C OULD NOT BE EXPLAINED. ASSESSEES CONTENTION WAS THAT THIS EXPE NDITURE WAS INCURRED IN THE ACTIVITY OF PRODUCT DEVELOPMENT WING OF MANUFACTURE OF DRILLING RIGS, ACCESSORIES AND TOOLS IN EARLIER YEARS BUT IT WAS DEFERRED. BUT THE LEDGER ACCOUNT COPIES PLA CED ON RECORD DOES NOT CORRELATE WITH ANNUAL ACCOUNTS. IT IND ICATES THAT AO HAS NOT EXAMINED THE ISSUE AT ALL. 6.2. IT WAS SUBMITTED THAT THE DEVELOPMENTAL ACTIVITY IN A PARTICULAR LINE UNDERTAKEN NEED NOT BE CONTINUED AND TH EREFORE, ENTIRE OUTSTANDING AMOUNT WAS WRITTEN-OFF, WHICH SHOULD B E ALLOWED EITHER U/S. 35 OR U/S. 37. SINCE THE ACCOUNT S FURNISHED BEFORE US DOES NOT TALLY AND SINCE LD. COUNSEL COULD NOT EXPLAIN THE DISCREPANCIES, WE ARE OF THE OPINION THAT THAT THESE MATTERS REQUIRE A THOROUGH EXAMINATION OF ASSESSEES ENTRIES I N THE BOOKS OF ACCOUNT AS WELL AS THE NECESSITY OF EXPENDITURE HA VING BEEN INCURRED FOR THE PURPOSE OF BUSINESS FOR WRITE-OFF DU RING THE YEAR. 6.3. THEREFORE, MODIFYING THE DIRECTIONS OF THE LD. CIT, WE HEREBY SET ASIDE THE ISSUE TO THE FILE OF THE AO TO RE- EXAMINE THE ENTIRE CLAIM AND DECIDE WHETHER THE AMOUNT CAN BE ALLOW ED IN THE YEAR OR NOT? IN CASE, THE EXPENDITURE WAS INCURRED IN EARLIER YEAR AND ASSESSEE WAS CLAIMING EXPENDITURE OF SIMILAR NA TURE IN AN EARLIER YEAR, AS SEEN FROM THE SCHEDULES FOR THE YEAR ENDING 31-03- 2007, THEN, AO HAS TO EXAMINE WHETHER THE EXPENDITURE I NCURRED IN AN EARLIER YEAR CAN BE ALLOWED DURING THE YEAR OR NOT? FOR THIS PURPOSE, THE ORDERS OF THE CIT ARE PARTIALLY MODIFIED AND THE ISSUE OF EXAMINATION OF PRODUCT DEVELOPMENT EXPENDITURE WRITTEN -OFF IS RESTORED TO THE FILE OF THE AO. AO IS DIRECTED TO EXAMIN E THE FACTS I.T.A. NO. 272/HYD/2016 KLR INDUSTRIES LTD., :- 8 -: AND DECIDE THE ISSUE ON LEGAL PRINCIPLES. THE ORDER OF THE CIT TO THAT EXTENT IS MODIFIED, WHILE UPHOLDING THE EXERCISE OF JURISDICTION U/S. 263. THE GROUNDS RAISED BY ASSESSEE FROM 1 TO 5 ON THIS ISSUE ARE PARTIALLY ALLOWED. 7. IN THE RESULT, APPEAL OF ASSESSEE IS PARTLY ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 19 TH AUGUST, 2016 SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMB ER HYDERABAD, DATED 19 TH AUGUST, 2016 TNMM COPY TO : 1. KLR INDUSTRIES LTD., HYDERABAD. C/O. SRI S. RA MA RAO, ADVOCATE, FLAT NO. 102, SHRIYAS ELEGANCE, 3-6-643, STREET NO. 9, HIMAYATNAGAR, HYDERABAD. 2. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2(1), HYDERABAD. 3. PR.CIT-2, HYDERABAD. 4. D.R. ITAT, HYDERABAD. 5. GUARD FILE.