Elem Investments Pvt.Ltd.,Hyd, Hyderabad V. ACIT, Central Circle-8, Hyderabad, Hyderabad

ITA 273/HYD/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3121 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-A
• Next Hearing Date: 31-01-2019
• Assessment Year: 2001-2002
• Appeal Filed On: 19-03-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Difference of opinion; Change of opinion
• Section: 147; 148; 271(1)(c); 139; 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B ', HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN , ACCOUNTANT MEMBER S.NO. ITA NO. AY A PPELLANT RESPONDENT / CROSS OBJECTOR 1 &2 120/H/10 2001 - 02 M/S ELEM INVESTMENT S (P) LTD., HYDERABAD PAN - AAACE 4370L DY. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE 1, HYDERABAD. 2 273/H/15 2001 - 02 - DO - ASST. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE 8, HYDERABAD. 3 113/H/10 2001 - 02 HIGH GRACE INVESTMENTS PVT.LTD., HYDERABAD. PAN AAACH5018G DY. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE 1, HYDERABAD. 4 272/H/15 2001 - 02 - DO - ASST. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE 8, HYDERABAD. 5 118/H/10 2001 - 02 M/S FINCITY INVESTMENTS PVT. LTD., HYDERABAD PAN AACF 3011D DY. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE 1, HYDERABAD. 6 271/H/15 2001 - 02 - DO - ASST. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE 8, HYDERABAD. 7 111/H/10 2001 - 02 M/S VEEYES INVESTMENTS PVT. LTD., HYDERABAD PAN AABCV 6591K DY. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE 1, HYDERABAD. 8 274/H/15 2001 - 02 - DO - ASST. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE 8, HYDERABAD. I.T.A. NO. 120 / H/ 1 10 AND OTHERS M/S ELEM INVESTMENTS (P) LTD. AND OTHERS 2 ASSESSEE BY: SHRI K.C. DEVDAS REVENUE BY: SMT. MATTA PADMA DATE OF HEARING: 31/01/2019 DATE OF PRONOUNCEMENT: 28 / 0 2 /201 9 O R D E R PER BENCH : APPEA LS IN ITA NOS. 111, 113, 118 AND 120/HYD/2010 ARE DIRECTED AGAINST THE ORDERS OF LD. CIT(A) I, HYDERABAD, ALL DATED, 6 TH NOVEMBER, 2009 AND APPEALS IN ITA NOS. 271, 272, 273 & 274/HYD/2015 ARE DIRECTED A GAINST THE ORDERS OF LD. CIT(A), ALL DATED 29/01/2015 WHEREBY THE CIT(A) CONFIRMED THE ORDERS PASSED U/S 271(1)(C) OF THE INCOME - TAX ACT, 1961 (IN SHORT THE ACT). ALL APPEALS ARE PERTAINING TO AY 2001 - 02 IN THE GROUP CONCERN AND IDENTICAL ISSUES ARE INV OLVED IN ALL THESE APPEALS, THEY WERE CLUBBED AN D HEARD TOGETHER AND THEREFORE, A COMMON ORDER IS PASSED FOR THE SAKE OF CONVENIENCE. ITA NO S . 111, 113, 118 AND 120/HYD/2010 2. THE FACTS AS TAKEN FROM ITA NO. 120/HYD/2010 IN THE CASE OF M/S ELEM INVESTMENT (P) LTD., ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE A .Y.2001 - 02 ADMITTING A TAXABLE INCOME OF RS.15,62,110 / - . ASSESSMENT WAS ORIGINALLY COMPLETED U / S 143(3) DETERMINING THE INCOME AT RS.23,86, 500 / - . SUBSEQUENTLY THE ASSESSMENT WAS REOPENED U / S 147 OF THE ACT. DURING THE RE - ASSESSMENT PROCEEDING S, THE AO OBSERVED THAT THE ASSESSEE HAD ACQUIRED 2,80,000 SHARES OF M /S GLAND PHARMA LTD. AN UNLISTED COMPANY @ RS . 40/ - ( RS.10 / - FACE VALUE + PREMIUM R S.30 / - ) EACH FOR A TOTAL CONSIDERATION OF RS.1,12,00,000 / - AS 'INVESTMENT' AND NOT AS 'STOCK IN TRADE'. SUBSEQUENTLY THE A SSESSEE COMPANY I.T.A. NO. 120 / H/ 1 10 AND OTHERS M/S ELEM INVESTMENTS (P) LTD. AND OTHERS 3 CONVERTED THE SAID SHARES INTO STOCK IN TRADE AND VALUED THE SAME @ RS.10 / - EACH THOUGH THE ACQUISITION PRICE PER SHAR E WAS RS 40/ - EACH. BY DOING SO , THERE WAS A REDUCTION IN THE VALUE OF SHARES TO THE EXTENT OF RS.84,00,000 / - THUS AN ARTIFICIAL LOSS OF RS.84,00,000 / - WAS CREATED ON ACCOUNT OF CONVERSION OF THE SHARES INTO STOCK IN TRADE. THE ASSESSING OFFICER , AFTER CON SIDERING THE EXPLANATION OF THE A SSESSEE , CONCLUDED THAT THE TECHNIQUE ADOPTED BY THE ASSESSEE BY SHOWING THE 'INVESTMENTS' AS 'STOCK IN TRADE' AND THEREAFTER VALUING THE SAME IN CLOSING STOCK BELOW THE ACQUISITION PRICE WAS A COLOURABLE DEVICE WITH AN INT ENTION TO EVADE TAX. HE THEREFORE DENIED THE LOSS OF RS.84,00,000 / - ARTIFICIALLY CREATED BY UNDERVALUING THE CLOSING STOCK AND ADDED BACK THE SAME TO THE INCOME RETURNED. 3. BEING AGGRIEVED AGAINST THE DENIAL OF LOSS IN THE ASSESSMENT , THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE CIT(A). 4. THE ASSESSEE HAS RAISED OBJECTION TO REOPENING OF ASSESSMENT BEFORE THE CIT(A), WHICH WAS REJECTED BY HIM. 5. AS REGARDS ADDITION OF RS. 84,00,000/ - , IT WAS THE CONTENTION OF THE ASSESSEE THAT THE AO WAS NOT JUSTIFI ED IN CONCLUD ING THAT THERE WAS A CONVERSION FROM INVESTMENT TO STOCK IN TRADE MERELY BECAUSE THE INVESTMENT WAS TREATED AS INVENTORY FOR CONSIDERING THE DIMINUTION IN ITS VALUE IN BOOKS OF ACCOUNT. IN THE STATEMENT OF FACT, THE A SSESSEE SUBMITTED THAT IN COURSE OF ITS INVESTMENT ACTIVITY , THE APPELLANT HAD INVESTED AN AMOUNT OF RS.1,12,00,000/ - BY WAY OF SHARES OF GLAND PHARMA LTD. THE INVESTMENT WAS MADE FOR ACQUISITION OF 2,80,000 SHARES OF THE SAID COMPANY AT A PRICE OF RS.40/ - PER SH ARE. HOWEVER, ON THE BALANCE SHEET DATE I.E. 31 - 3 - 2001, THE I.T.A. NO. 120 / H/ 1 10 AND OTHERS M/S ELEM INVESTMENTS (P) LTD. AND OTHERS 4 A SSESSEE VALUED ITS INVESTMENT AT THEIR FACE VALUE (RS.10 EACH) AND TREATED THEM AS INVENTORY CONSIDERING THE DIMINUTION IN THE VALUE OF INVESTMENT. THE ASSESSEE STATED THAT WHILE DOING SO, THE AS SESSEE HAS FOLLOWED THE ACCOUNTING STANDARD ISSUED BY ICAI. 6. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE CIT(A) OBSERVED THAT THE AO HAS DULY DEALT WITH THE ISSUE AND HAS REJECTED THE CONTENTION OF THE A SSESSEE ON THE GROUND THAT UNQUOTED SH ARES OF THE UNLISTED COMPANIES CANNOT BE TREATED AS STOCK IN TRADE AS THEY ARE NOT TRADABLE IN THE OPEN MARKET AND THAT T HE SAME SHOULD BE TREATED AS INVESTMENTS TO BE VALUED AT ACQUISITION PRICE. CIT(A) NOTED THAT T HE A O FURTHER OBSERVED THAT EVEN IF THE UNQUOTED SHARES ARE TREATED AS STOCK IN TRADE, THEY CANNOT BE VALUED AT THE FACE VALUE AT THE YEAR END. AS PER THE STANDARD METHOD OF ACCOUNTING THE STOCK IN TRADE HAS TO BE VALUED AT COST O R MARKET VALUE WHICHEVER IS LESS. SINCE THERE WAS NO MARKET PRICE FOR UNQUOTED SHARES, THE AO HELD THAT THE SAME HAS TO BE VALUED AT COST. ACCORDINGLY, REJECTING THE CONTENTION OF THE A SSESSEE THE A O HELD THAT THE ASSESSEE HAS ADOPTED A COLOURABLE DEVISE WITH THE INTENTION TO EVADE TAX BY CREATING AN ARTIFICIAL LOSS OF R S.84, 00,000 - BY UNDER - VALUING THE CLOSING STOCK. HE THEREFORE DENIED THE CLAIM OF LOSS. 6.1 WHILE UPHOLDING THE OBSERVATIONS OF THE AO AS ABOVE, T HE CIT(A), FOLLOWING THE DECISION OF THE HIS PREDECESSOR IN ASSESSEES OWN CASE FOR AY 2002 - 03, UPHELD THE A DDITION MADE BY THE AO. 7. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL, I.T.A. NO. 120 / H/ 1 10 AND OTHERS M/S ELEM INVESTMENTS (P) LTD. AND OTHERS 5 WHICH ARE COMMON IN ALL THE APPEALS UNDER CONSIDERATION, EXCEPT THE QUANTUM OF ADDITION: 1) THE ORDER OF THE C.I.T . (A) - II, IS CONFIRMING THE ASSESSMENT MADE BY THE DCIT, CENTRAL CIRCLE - I, HYDERABAD IS UNSUSTAINABLE BATH ON FACTS AND IN LAW. 2) THE LEARNED C.I.T. (A) - II, HYDERABAD FAILED TO NOTE THAT THE REASONS RECORDED FOR RE - OPENING THE ASSESSMENT U/S 147 HAD A BSOLUTELY NO NEXUS WITH THE INCOME ESCAPING ASSESSMENT AND THEREFORE OUGHT TO HAVE CLEARLY H EL D THAT THE ENTIRE RE - ASSESSMENT PROCEEDINGS AND THE ASSESSMENT MADE THEREON ARE INVALID; BAD IN LAW AND IS TO BE QUASHED. 3) THE LEARNED C.I.T. (A) - II FAILED TO NOTE THAT THE ORIGINAL ASSESSMENT WAS MADE U/S 143 (3) ON18.3.2004 AND THAT THERE WAS NO OMISSION OR FAILURE ON THE PART OF THE APPELLANT TO DISCLOSE ALL MATERIAL FACTS AND THER E FORE THE RE - OPENING OF ASSESSMENT AFT ER A PERIOD OF FOUR YEARS ON 5.5.2006 AND THE ASSESSMENT MADE THEREON IS INVALID BAD IN LAW AND THEREFORE MUST BE QUASHED. 4) THE ADDITION OF RS.84 LAKHS TO THE INCOME RETURNED HAS BEEN MADE ON A WRONG APPRECIATION OF FACTS ON RECORD AND THEREFORE MUST B E DELETED. 4)ANY OTHER GROUND (S) THAT MAY BE URGED AT THE TIME OF HEARING. 8. LD. AR SUBMITTED THAT THE ASSESSMENT WAS REOPENED AFTER EXPIRY OF FOUR YEARS AND THE FIRST PROVISO IS APPLICABLE IN THIS CASE. AS PER THE PROVISO, AO HAS TO DEMONSTRATE THE REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ITS ASSESSMENT. HE BROUGHT TO OUR NOTICE THAT THE SUBJECT MATTER OF REOPENING WAS ALREADY CONSIDERED BY THE AO IN THE ORIGINAL ASSESSMENT. THE RELEV ANT QUERIES ABOUT THE INVESTMENT IN SHARES, VALUATION OF SHARES WERE RAISE D BY THE AO AND THE ASSESSEE HAS ALSO REPLIED AND SUBMITTED BEFORE THE AO. THE RELEVANT INFORMATION IS FILED AT PAGES 401 TO 424 OF PAPER BOOK II. HE SUBMITTED THAT ALL THE MATERIA L FACTS WERE DISCLOSED IN THE RETURN OF INCOME AND THERE IS NO FAILURE ON THE PART OF THE I.T.A. NO. 120 / H/ 1 10 AND OTHERS M/S ELEM INVESTMENTS (P) LTD. AND OTHERS 6 ASSESSEE. FOR THIS PROPOSITION, HE RELIED ON THE FOLLOWING CASE LAW: I) ANN E VENKATA VISHNU VARA PRASAD VS. ACIT , [2018] 405 ITR 491 (AP) II) TECUMSEH PRODUCTS I NDIA PVT. LTD. VS. ACIT, 361 ITR 429 9. LD. DR SUBMITTED THAT AO HAS FOLLOWED THE DUE PROCESS TO REOPEN THE ASSESSMENT, HE BROUGHT TO OUR NOTICE THE FINDINGS OF LD. CIT(A) IN PARA 4 OF HIS ORDER AND RELIED ON THE FOLLOWING CASES: I) GRUH FINANCE LT D. VS. JCIT, 123 TAXMAN 196 (GUJ.) II) ITO VS. TECH SPAN INDIA PVT. LTD & ANR., 255 TAXMAN 152 (SC) 10. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE NOTICE THAT THE ASSESSMENT WAS REOPENED BY ISSUE OF NOTICE U/S 148 ON 05/0 5/2006, WHICH WAS AFTER THE END OF FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR. THEREFORE, AO HAS TO FIRST DEAL WITH THE FIRST PROVISO OF SECTION 147 AS PER WHICH NO ACTION SHALL BE TAKEN UNLESS THERE IS A FAILURE ON THE PART OF THE ASSESSEE. IN TH E GIVEN CASE, LD. AR BROUGHT TO OUR NOTICE THAT IN THE ORIGINAL ASSESSMENT ITSELF, AO HAS DEALT WITH THIS ISSUE AND ALSO ALL THE MATERIAL FACTS WERE AVAILABLE IN THE RETURN OF INCOME ITSELF. WE REFERRED TO THE PAGES WHICH WERE SUBMITTED BEFORE US. THE ASSE SSEE HAS COLLECTED THIS INFORMATION FROM THE DEPARTMENT, WHICH WAS SUBMITTED BY THE ASSESSEE BEFORE THE AO AT THE TIME OF ORIGINAL ASSESSMENT. THE DOCUMENT CONTAINS : A) COMPUTATION OF INCOME B) INFORMATION SUBMITTED WITH REFERENCE TO THE NOTICE U/S 142(1) C) DETAILS OF STOCK IN TRADE AS PER BALANCE SHEET (PAGE 422 OF PAPER BOOK) D) DETAILS OF INVESTMENTS (PAGE 414 OF PAPER BOOK) E) DETAILS OF UNSECURED LOAN (PAGE 417 OF PAPER BO OK) F) DETAILS OF ADVANCES (PAGE 418 - 420 OF PAPER BOOK) I.T.A. NO. 120 / H/ 1 10 AND OTHERS M/S ELEM INVESTMENTS (P) LTD. AND OTHERS 7 G) DETAILS OF OUTSTANDING LIABILITY (PAGE 421 OF PAPER BOOK) H) DETAILS OF PURCHASE OF SHARES (PAGE 423 OF PAPER BOOK) I) DETAILS O F SALE OF SHARES (PAGE 424 OF PAPER BOOK) 10.1 FROM THE ABOVE, IT IS CLEAR THAT AO HAS CALLED FOR THE INFORMATION RELATING TO INVESTMENT IN SHARES AND VALUATION OF THE SAME. HE HAS APPLIED HIS MIND AND FORMED AN OPINION, BUT, HE HAS NOT DISCUSSED ELABORATELY IN HIS ORDER. LD. DR HAS REFERRED TO THE CASE OF TECH SPAN INDIA (P.) LTD., [2018] 92 TAXMANN.COM 361 (SC), IN WHICH, THE HONBLE SUPREME COURT HAS DEALT WITH THE SIMILAR SITUATION AND THE RELEVANT FINDINGS OF THE APEX COURT ARE REPRODUCED BELOW: 12. BEFORE INTERFERING WITH THE PROPOSED RE - OPENING OF THE ASS ESSMENT ON THE GROUND THAT THE SAME IS BASED ONLY ON A CHANGE IN OPINION, THE COURT OUGHT TO VERIFY WHETHER THE ASSESSMENT EARLIER MADE HAS EITHER EXPRESSLY OR BY NECESSARY IMPLICATION EXPRESSED AN OPINION ON A MATTER WHICH IS THE BASIS OF THE ALLEGED ESCA PEMENT OF INCOME THAT WAS TAXABLE. IF THE ASSESSMENT ORDER IS NON - SPEAKING, CRYPTIC OR PERFUNCTORY IN NATURE, IT MAY BE DIFFICULT TO ATTRIBUTE TO THE ASSESSING OFFICER ANY OPINION ON THE QUESTIONS THAT ARE RAISED IN THE PROPOSED RE - ASSESSMENT PROCEEDINGS. EVERY ATTEMPT TO BRING TO TAX, INCOME THAT HAS ESCAPED ASSESSMENT, CANNOT BE ABSORBED BY JUDICIAL INTERVENTION ON AN ASSUMED CHANGE OF OPINION EVEN IN CASES WHERE THE ORDER OF ASSESSMENT DOES NOT ADDRESS ITSELF TO A GIVEN ASPECT SOUGHT TO BE EXAMINED IN TH E RE - ASSESSMENT PROCEEDINGS. 10.2 THEREFORE, THE MATERIAL SUBMITTED BEFORE US BY LD. AR SUGGEST THAT AO HAS ALREADY APPLIED HIS MIND AND FORMED AN OPINION. BY APPLYING THE ABOVE RATIO, IT CAN BE CONSTRUED AS CHANGE OF OPINION. IT IS SETTLED PRECEDENT THAT AO CANNOT REOPEN THE ASSESSMENT MERELY ON CHANGE OF HIS OPINION. FURTHER, WE NOTICE THAT AO RECORDED THE REASONS FOR REOPENING, IN WHICH, HE HAS NOT RECORDED ANYWHERE THAT THERE IS FAILURE ON THE PART OF THE ASSESSEE. SINCE, THE ASSESSMENT WAS REOPENE D AFTER FOUR YEARS, IT IS THE DUTY OF THE AO TO BRING I.T.A. NO. 120 / H/ 1 10 AND OTHERS M/S ELEM INVESTMENTS (P) LTD. AND OTHERS 8 ON RECORD THE FAILURE ON THE PART OF THE ASSESSEE, AS HELD BY THE HONBLE AP HIGH COURT IN THE CASE OF TECUMSEH PRODUCTS INDIA PVT. LTD. VS. ACIT AND ANR., [2014] 361 ITR 429 (AP). IN THE SAID CASE THE HONBLE COURT HAS HELD AS UNDER: BEFORE ANY NOTICE IS ISSUED AFTER EXPIRY OF FOUR YEARS, THE OFFICER CONCERNED MUST BE SATISFIED THAT THERE HAS BEEN AN ESCAPEMENT IN ASSESSMENT OF INCOME, WHICH IS CHARGEABLE TO TAX AND THAT THIS IS BECAUSE OF FAILURE ON PART OF THE ASSESSEE TO MAKE A RETURN U/S 139 OF THE INCOME - TAX ACT, 1961 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB - SECTION (1) OF SECTION 142 OR SECTION 148 FOR NOT DISCLOSING MATERIAL FACTS. THESE CONDITIONS MUST BE REFLECTED IN THE NOTICE ITSELF. IN ABSENCE OF THE CONDITIONS, EXERCISE OF JURISDICTION IN ISSUANCE OF NOTICE UNDER THE PROVISION IS PATENTLY ILLEGAL. 10.3 BY APPLYING THE ABOVE RATIO, WE NOTICE THAT AO HAS NOT RECORDED ANY REASONS OF FAILURE ON THE PART OF THE ASSESSEE. HENCE, THE REOPENING ITSELF IS ILLEGAL. THEREFORE, IN OUR CONSIDERED VIEW, THE REOPENING WAS BAD IN LAW AND THERE FORE, THE SAME IS HEREBY QUASHED. ACCORDINGLY, WE ALLOW THE GROUNDS RAISED BY THE ASSESSEE IN THIS REGARD. 11. AS FACTS AND GROUNDS IN ITA NOS. 113, 118, 111/HYD/2010 ARE MATERIALLY IDENTICAL TO THAT OF ITA NO. 120/HYD/2010, FOLLOWING THE CONCLUSIONS DRAWN THEREIN , WE QUASH THE REOPENING OF ASSESSMENTS AND ALLOW THE GROUNDS RAISED IN THESE APPEALS. ITA NOS. 271 TO 274/HYD/2015 1 2 . IN THESE APPEALS, THE FOLLOWING COMMON GROUNDS ARE RAISED BY THE ASSESSEES, EXCEPT THE QUANTUM OF PENALTY: 1. THE ORDER OF THE CIT (A) - 12, HYDERABAD IN CONFIRMING THE LEVY OF PENALTY LEVIED U/S 271 ( 1 )(C) OF THE IT ACT, 1961 OF RS. 30,15,873 IS UNSUSTAINABLE BOTH ON LAW AND IN FACTS. 2. THE LEARNED CIT(A) FAILED TO NOTE THAT THE APPELLANT HAD NOT CONCEALED THE PARTICULARS OF INCOM E NOR FURNISHED INACCURATE PARTICULARS AS THE ACIT DREW THE NECESSARY INFERENCES AGAINST THE APPELLANT ON THE BASIS I.T.A. NO. 120 / H/ 1 10 AND OTHERS M/S ELEM INVESTMENTS (P) LTD. AND OTHERS 9 OF FULL DISCLOSURE OF MATERIAL FACTS IN THE P & L A / C AND BALANCE SHEET AS ON 31.03.2001 RELEVANT TO THE AY 2001 - 2002. 3. THE LEARNED CIT( A) FAILED TO NOTE THAT THERE WAS NO DELIBERATE ACT TO EVADE TAX LIABILITY AND FULL DISCLOSURE WAS MADE IN RELATION TO THE TRANSACTIONS AND ALSO THE VALUATION OF SHARES WHICH REPRESENTED THE CLOSING STOCK OF THE APPELLANT BEING THE TRADER IN SHARES. THE LEV Y OF PENALTY IS QUASHED. 4. THE LEARNED CIT(A) ERRED IN HOLDING THAT THE APPELLANT WAS NOT CORRECT IN VALUING THE SHARES OF GLAND PHARMA AT NET REALISABLE VALUE. 5. THE LEARNED CIT(A) ERRED IN UPHOLDING THE ACTION OF ASSESSING OFFICER TO STATE THAT THE EXPLANATION TO SECTION 73 OF THE IT ACT, 1961 WOULD APPLY. 6. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT THE PRINCIPLE OF VALUATION ADOPTED BY THE APPELLANT BEING IN LINE WITH THE GENERALLY ACCEPTED PRINCIPLES OF ACCOUNTING AND THE ACCOUNTING STA NDARDS, THE SAME CANNOT BE CONSTRUED AS CONCEALMENT OF INCOME AND / OR FURNISHING OF INACCURATE PARTICULARS. 1 3 . AS THE REOPENING OF ASSESSMENTS MADE BY THE AO U/S 147 OF THE ACT WERE QUASHED BY US IN THESE APPEALS, PENALTY LEVIED U/S 271(1) ON SUCH ASSESSMENTS WERE NULL AND AVOID, THEREFORE, ALL THESE APPEALS FILED BY THE ASSESSEES BECOME INFRUCTUOUS AND THE SAME ARE DISMISSED AS INFRUCTUOUS. 1 4 . IN THE RES ULT, APPEALS IN ITA NOS. 120, 113, 118 & 111/HYD/2010 ARE ALLOWED AND THE APPEALS IN ITA NOS. 271 TO 274/HYD/2015 ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 28 TH FEBRUARY , 201 9 . SD/ - ( P. MADHAVI DEVI ) JUDICIAL MEMBER SD/ - ( S. RIFAUR RAHMAN ) ACCOUNTANT MEMBER HYDERABAD, DATED 28 TH FEBRUARY , 201 9 I.T.A. NO. 120 / H/ 1 10 AND OTHERS M/S ELEM INVESTMENTS (P) LTD. AND OTHERS 10 KV COPY FORWARDED TO: 1. M/S ELEM INVESTMENTS (P) LTD., 2 . M/S HIGH GRACE INVESTMENTS PVT. LTD. 3 . M/S FINCITY INVESTMENTS P. LTD. 4 M/S VEEYES INVESTMENTS PVT. LTD., 5 . DCIT, CENTRAL CIRCLE 1, HYDERABAD 6. ACIT, CENTRAL CIRCLE 8, HYDERABAD 7 CIT(A) 1 , HYDERABAD 8 CIT(A) 12, HYD . 9 CIT (CENTRAL) , HYDERABAD 10 THE DR, ITAT, HYDERABAD 11 . GUARD FILE