Asst. CIT, Circle-13(1), Hyderabad V. M/s Padmalaya Tele Films Ltd., Hyderabad

ITA 277/HYD/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82381 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 24-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P SOMASEKHAR REDDY
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Depreciation; Assessment record; Revised return
• Section: 143(3); 133A; 263; 63

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA.NO.277/HYD/2014 ASSESSMENT YEAR 2003-04 THE ACIT, CIRCLE 13(1), HYDERABAD. VS. M/S. PADMALAYA TELE FILMS LTD., HYDERABAD. PAN AABCP9095Q (APPELLANT) (RESPONDENT) FOR REVENUE : MR. P. SOMASEKHAR REDDY FOR ASSESSEE : MR. P. MURALIMOHAN RAO DATE OF HEARING : 01.10.2014 DATE OF PRONOUNCEMENT : 01.10.2014 ORDER PER SMT. P. MADHAVI DEVI, J.M. THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-V, HYDERABAD DATED 31.10.20 13 FOR THE A.Y. 2003-2004 DIRECTING THE A.O. TO ADOPT THE TOTA L INCOME ARRIVED AT BY HIM VIDE HIS ORDER DATED 31.12.2009 P ASSED UNDER SECTION 143(3) READ WITH SECTION 254 OF THE I .T. ACT, 1961 PRIOR TO PASSING OF THE CONSEQUENTIAL TO THE ORDER UNDER SECTION 263 OF THE I.T. ACT, 1961. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A COMPANY ENGAGED IN THE BUSINESS OF PRODUCTION, SALE AND TELECAST OF TELE FILMS, FILMS, 2D, 3D AND ANIMATION WORKS ETC., THERE WAS A SURVEY ACTION UNDER SECTION 133A OF THE I.T. ACT ON THE PREMISES OF ASSESSEE ON 22.08.2003 PURSUANT TO WHICH, 2 ITA.NO.277/HYD/2014 M/S. PADMALAYA TELE FILMS LTD., HYDERABAD. CERTAIN INCRIMINATING MATERIAL WAS FOUND AND IMPOUN DED. SUBSEQUENT TO THE SEARCH, ASSESSEE FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.1,53,62,011. DURING TH E ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) OF THE I.T. ACT, THE TOTAL INCOME OF THE ASSESSEE COMPANY WAS DETERM INED AT RS.20,49,50,000. 3. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A) AND THE LD. CIT(A) VIDE HIS ORDER DATED 20.0 3.2007 DISMISSED THE APPEAL AND ON FURTHER APPEAL BY ASSES SEE, THE ITAT IN ITA.NO.783 AND 784/HYD/2007 DATED 11.07.200 8 PASSED A CONSOLIDATED ORDER FOR THE A.YS. 2003-04 A ND 2004- 05 DIRECTING THE A.O. TO COMPLETE THE ASSESSMENT AF RESH, AFTER CONSIDERING THE ALLOWABILITY OF DEPRECIATION @ 100% ON LIBRARY AND APPLICABILITY OF THE PROVISIONS OF RULE 9A/9D O F THE I.T. RULES, 1962 AND ALSO ON ADHOC DISALLOWANCE OUT OF P RODUCTION EXPENSES. THE ITAT HAS ALSO DIRECTED THE A.O. TO CO NSIDER THE REVISED RETURN FILED BY ASSESSEE ON 29.03.2006. A.O . COMPLETED THE ASSESSMENT UNDER SECTION 143(3) READ WITH SECTI ON 254 OF THE I.T. ACT DETERMINING THE TOTAL INCOME AT RS.17, 03,19,832. 4. SUBSEQUENTLY, THE LD. CIT, PERUSED THE ASSESSMENT RECORDS UNDER SECTION 263 OF THE I.T. AC T AND DIRECTED THE A.O. TO DISALLOW CERTAIN CLAIMS OF ASS ESSEE. A.O. GAVE EFFECT TO THE ORDER OF LD. CIT UNDER SECTION 2 63 BY ADDING THE AMOUNTS MENTIONED IN THE ORDER UNDER SECTION 26 3 AND DETERMINED THE TOTAL INCOME AT RS.22,01,13,585. AGA INST THIS ORDER OF THE A.O. ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) CONSIDERED THE FACT THAT AS SESSEE HAD PREFERRED APPEAL BEFORE THE TRIBUNAL AGAINST THE OR DER OF LD. CIT PASSED UNDER SECTION 263 OF THE ACT AND THE ITA T IN ITA.NO.584/HYD/2012 HAS SET ASIDE THE ORDER OF LD. CIT UNDER 3 ITA.NO.277/HYD/2014 M/S. PADMALAYA TELE FILMS LTD., HYDERABAD. SECTION 263 OF THE ACT. THE LD. CIT(A), THEREFORE, HELD THAT THE ORDER OF LD. CIT UNDER SECTION 263 HAVING BEEN CANC ELLED BY ITAT, THE TOTAL INCOME ARRIVED AT BY A.O. UNDER SEC TION 143(3) READ WITH SECTION 254 OF THE I.T. ACT, DATED 31.12. 2009 AT RS.17,03,19,830 ARRIVED AT PRIOR TO PASSING OF THE CONSEQUENTIAL ORDER UNDER SECTION 263 OF THE ACT, S HOULD BE ADOPTED. AGAINST THIS ORDER OF LD. CIT(A), REVENUE IS IN APPEAL BEFORE US. 5. HAVING HEARD BOTH THE PARTIES AND HAVING PERUSE D THE MATERIAL ON RECORD, WE FIND THAT THE BASIS FOR THE A.O. TO ARRIVE AT THE TOTAL INCOME OF RS.22,01,13,585 IS TH E ORDER OF LD. CIT UNDER SECTION 263 OF THE I.T. ACT. ON CHALLENGE BY THE ASSESSEE, THE ITAT HAS SET ASIDE THE ORDER OF LD. C IT UNDER SECTION 263. THEREFORE, THE VERY BASIS FOR PASSING OF THE CONSEQUENTIAL ORDER BY A.O. HAS BEEN KNOCKED DOWN. IN SUCH CIRCUMSTANCES, THE APPEAL AGAINST SUCH ORDER TO THE LD. CIT(A) AND THEREAFTER TO ITAT HAVE BECOME INFRUCTUOUS AND THEREFORE, NOT MAINTAINABLE. IN VIEW OF THE SAME, WE SEE NO RE ASON TO INTERFERE WITH THE ORDER OF LD. CIT(A) ON THIS ISSU E. REVENUES GROUND IS ACCORDINGLY DISMISSED. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 01.10.2014. SD/- SD/- (P.M. JAGTAP) (SMT. P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 01 ST OCTOBER, 2014. VBP/- 4 ITA.NO.277/HYD/2014 M/S. PADMALAYA TELE FILMS LTD., HYDERABAD. COPY TO 1. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE 13( 1), 2 ND FLOOR, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD. 2. M/S. PADMALAYA TELE FILMS LTD., H.NO.8-3-222/1/1 23, PLOT NO.138, MADHURANAGAR, HYDERABAD. 3. CIT(A)-V, HYDERABAD. 4. CIT-I, HYDERABAD. 5. D.R. ITAT A BENCH, HYDERABAD