Dy.CIT, Circle-16(3), Hyderabad V. M/s Pochampad Constructions Company Pvt Ltd., Hyderabad

ITA 296/HYD/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82515 (ITAT-HYDERABAD)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 25-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B RAMA KRISHNA
• Assessee Lawyers: SHRIT CHAITNYA KUMAR
• Keywords: Reopening of assessment; Depreciation; Non-deduction of tax; Tangible material; Difference of opinion; Change of opinion
• Section: 143(3); 194C; 147; 148; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 296/HYD/2014 ASSESSMENT YEAR : 2007-08 DY. COMMISSIONER OF INCOME- TAX, CIRCLE 16(3), HYDERABAD. M/S POCHAMPAD CONSTRUCTIONS COMPANY PVT. LTD., HYDERABAD PAN AADCP2767M (APPELLANT) (RESPONDENT) REVENUE BY SHRI B. RAMA KRISHNA ASSESSEE BY SHRIT. CHAITNYA KUMAR DATE OF HEARING 13-10-2014 DATE OF PRONOUNCEMENT -10-2014 O R D E R PER SAKTIJIT DEY, J.M.: THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE OR DER DATED 28/10/2013 OF THE CIT(A)-V, HYDERABAD FOR THE ASSES SMENT YEAR 2007-08. 2. THE EFFECTIVE GROUNDS RAISED BY THE DEPARTMENT A RE AS UNDER: II. THE CIT(A) NOT CORRECT IN HOLDING THE AO CANNOT REOPEN THE ASSESSMENT U/S 147 RELYING ON THE SAME BOOKS WHICH WERE REJECTED TO MAKE SPECIFIC DISALLOWANCES. III.THE CIT(A) OUGHT TO HAVE CONSIDERED THE FACT TH AT THE RECENTLY, THE BOARD VIDE ITS CIRCULAR NO. 10/DV/2013 (DEPARTM ENTAL VIEW) IN 2 ITA NO. 296/HYD/2014 M/S POCHAMPAD CONSTRUCTIONS PVT. LTD. F.NO. 279/MISC/M-61/2012-ITJ (VOL.II) DATED 16/12/2 013 HELD THAT IN CASE OF ACIT, CIRCLE-4(2), MUMBAI VS. RISHTI STO CK AND SHARES PVT. LTD. IN ITA NO. 112/MUM/2012, HONBLE ITAT, MU MBAI IN ITS ORDER DATED 2-8-2013 HELD THE DECISION IN FAVOUR OF DEPARTMENT. 3. BRIEFLY THE FACTS ARE, ASSESSEE A COMPANY IS ENG AGED IN EXECUTING CIVIL CONSTRUCTION WORKS. FOR THE AY UNDE R DISPUTE, ASSESSEE FILED ITS RETURN OF INCOME ON 15/11/2007 D ECLARING INCOME OF RS. 1,02,51,027. ASSESSMENT PROCEEDING IN CASE OF A SSESSEE WAS INITIATED BY AO BY ISSUING A NOTICE U/S 143(2) ON 1 9/09/08. AS MENTIONED BY AO IN THE ORIGINAL ASSESSMENT ORDER, A S ASSESSEE FAILED TO PRODUCE ITS BOOKS OF ACCOUNT ALONG WITH BILLS AN D VOUCHERS, AO PROPOSED TO REJECT BOOK RESULTS AND ESTIMATE THE PR OFIT. AS ASSESSEE AGREED TO SUCH PROPOSAL OF AO, AO PROCEEDED TO COMP LETE ASSESSMENT BY ESTIMATING THE NET PROFIT AT 5.5% ON GROSS RECEIPTS CLEAR OF DEPRECIATION AND OTHER EXPENSES. AS IT APP EARS FROM THE FACTS ON RECORD, ASSESSEE ACCEPTED THE INCOME DETERMINED BY AO. WHEN THE MATTER STOOD LIKE THIS, CIT IN EXERCISE OF POWE R U/S 263 OF THE ACT, ISSUED A NOTICE TO ASSESSEE ON 04/08/2011 DIRECTING IT TO SHOW CAUSE AS TO WHY ASSESSMENT ORDER SHOULD NOT BE SET ASIDE BEING ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVENUE AS AO W HILE COMPLETING THE ASSESSMENT U/S 143(3) OF THE ACT HAS FAILED TO DIS ALLOW AN AMOUNT OF RS. 3,88,33,495 U/S 40(A)(IA) AS TAX WAS NOT DEDUCT ED BY ASSESSEE WHILE MAKING SUCH PAYMENT TO TWO SUB-CONTRACTORS. IN RESPONSE TO THE SAID SHOW CAUSE NOTICE, ASSESSEE FILED A DETAIL ED REPLY BEFORE CIT ON 19/11/2011 OBJECTING TO INITIATION OF PROCEEDING U/S 263 OF THE ACT BY STATING THEREIN THAT WHEN THE ASSESSMENT WAS COM PLETED AFTER REJECTING THE BOOKS OF ACCOUNT AND ESTIMATING THE P ROFIT THERE IS NO OCCASION FOR MAKING SEPARATE STATUTORY DISALLOWANCE S U/S 40(A)(IA). WHEN THE MATTER WAS STILL PENDING BEFORE CIT, AO RE OPENED THE ASSESSMENT U/S 147 OF THE ACT BY ISSUING A NOTICE U /S 148 TO ASSESSEE ON 29/03/12 ON THE VERY SAME REASON ON WHI CH CIT INITIATED PROCEEDING U/S 263 OF THE ACT. THOUGH, ASSESSEE APP EARED AND OBJECTED TO PROPOSED DISALLOWANCE U/S 40(A)(IA) OF THE ACT ON THE 3 ITA NO. 296/HYD/2014 M/S POCHAMPAD CONSTRUCTIONS PVT. LTD. PAYMENTS OF RS. 3,88,33,495 TO SUB-CONTRACTORS, BUT , AO REJECTING SUBMISSIONS OF ASSESSEE, COMPLETED THE ASSESSMENT V IDE ORDER DATED 07/01/.2013 BY DISALLOWING THE AMOUNT OF RS. 3,88,3 3,495 U/S 40(A)(IA) OF THE ACT. BEING AGGRIEVED OF SUCH DISAL LOWANCE MADE BY AO, ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A) BY CHALLENGING THE ASSESSMENT ORDER BOTH ON THE ISSUE OF VALIDITY OF P ROCEEDING U/S 147 AS WELL AS ON THE MERITS OF THE DISALLOWANCE MADE U /S 40((A)(IA). 4. IN COURSE OF HEARING OF APPEAL, ASSESSEE CHALLEN GED THE VALIDITY OF PROCEEDING INITIATED U/S 147 AND SUBMITTED THAT THE ORIGINAL ASSESSMENT U/S 143(3) OF THE ACT WAS COMPLETED BY A O BY ESTIMATING THE NET PROFIT AFTER REJECTING BOOKS OF ACCOUNT WIT HOUT MAKING ANY DISALLOWANCE U/S 40(A)(IA) OF THE ACT. IT WAS SUBMI TTED THAT CIT THOUGH INITIATED PROCEEDING U/S 263 OF THE ACT FOR ALLEGED NON-CONSIDERATION OF DISALLOWANCE U/S 40(A)(IA) ON THE SUB-CONTRACT P AYMENTS BY AO, BUT, AFTER CONSIDERING SUBMISSIONS OF ASSESSEE, CIT DROPPED THE PROCEEDING U/S 263. THUS, IT WAS SUBMITTED BY ASSES SEE THAT THE HIGHER AUTHORITY I.E. CIT HAVING DROPPED THE PROCEE DING INITIATED U/S 263 ON THE VERY SAME ISSUE THE AO COULD NOT HAVE RE OPENED AND COMPLETED ASSESSMENT U/S 143(3) READ WITH SECTION 1 47. FURTHER, IT WAS SUBMITTED BY ASSESSEE WHEN AO HAS REJECTED THE BOOKS OF ACCOUNT AND ESTIMATED THE PROFIT NO SEPARATE STATUT ORY DISALLOWANCES CAN BE MADE BY RELYING UPON THE VERY SAME BOOKS OF ACCOUNT AS PER THE RATIO LAID DOWN BY THE HONBLE A.P. HIGH COURT IN CASE OF INDWELL CONSTRUCTIONS VS. CIT, 232 ITR 776. CIT(A) AFTER CO NSIDERING THE SUBMISSIONS OF ASSESSEE ACCEPTED ASSESSEES CONTENT IONS ON BOTH THE COUNTS. CIT(A) HELD THAT WHEN HIGHER AUTHORITY I.E. CIT HAS DROPPED THE PROCEEDING INITIATED U/S 263 ON THE VER Y SAME ISSUE OF CONSEQUENT DISALLOWANCE U/S 40(A)(IA) FOR NON-DEDUC TION OF TAX ON SUB-CONTRACT PAYMENTS, AO IS NOT JUSTIFIED IN REOPE NING THE ASSESSMENT U/.S 147. HE FURTHER HELD THAT WHEN AO H AS ESTIMATED THE PROFIT AFTER REJECTING BOOKS OF ACCOUNT, AO CANNOT REOPEN THE ASSESSMENT U/S 147 RELYING ON THE SAME BOOKS OF ACC OUNT FOR MAKING 4 ITA NO. 296/HYD/2014 M/S POCHAMPAD CONSTRUCTIONS PVT. LTD. SPECIFIC DISALLOWANCES. ACCORDINGLY, CIT(A) QUASHED THE ASSESSMENT ORDER PASSED U/S 143(3) READ WITH SECTION 147. SINC E THE ASSESSMENT ORDER PASSED U/S 143(3) READ WITH SECTION 147 WAS Q UASHED ON THE LEGAL ISSUE OF VALIDITY OF PROCEEDING U/S 147, CIT( A) DID NOT GO INTO THE MERITS OF DISALLOWANCE U/S 40(A)(IA) OF THE ACT . 5. THE LEARNED DR SUBMITTED BEFORE US THAT CIT(A) W AS NOT JUSTIFIED IN HOLDING THE ASSESSMENT ORDER TO BE INVALID. IT W AS SUBMITTED THAT EVEN THOUGH THE ORIGINAL ASSESSMENT WAS COMPLETED B Y ESTIMATING THE PROFIT, BUT, THE BOOKS OF ACCOUNT WERE NOT REJECTED AS THE ASSESSEE DID NOT PRODUCE THE BOOKS OF ACCOUNT. IT WAS SUBMIT TED THAT EVEN IN A CASE OF ESTIMATION OF PROFIT, AO CAN STILL MAKE STA TUTORY DISALLOWANCES AS OTHERWISE THERE WILL BE A CASCADING EFFECT DUE T O SUCH NON- DISALLOWANCE AS THERE IS A POSSIBILITY OF ASSESSEE CLAIMING THE DEDUCTION MORE THAN ONCE. LEARNED DR SUBMITTED, AS ISSUE OF APPLICABILITY OF SECTION 40(A)(IA) WAS NOT CONSIDER ED BY AO AT THE TIME OF COMPLETING THE ORIGINAL ASSESSMENT REOPENING OF ASSESSMENT U/S 147 IS JUSTIFIED. 6. THE LEARNED AR, ON THE OTHER HAND, MORE OR LESS REITERATING THE SUBMISSIONS MADE BEFORE THE CIT(A) SUBMITTED THAT T HERE IS NO FRESH/TANGIBLE MATERIAL AVAILABLE BEFORE THE AO WHI LE REOPENING ASSESSMENT U/S 147 OF THE ACT. IT WAS SUBMITTED THA T BY RELYING UPON THE VERY SAME MATERIAL, WHICH WAS CONSIDERED AT THE TIME OF ORIGINAL ASSESSMENT, THE AO HAS REOPENED THE ASSESSMENT. LEA RNED AR SUBMITTED THAT EVEN THOUGH THE ISSUE WAS ALSO CONSI DERED BY CIT WHILE INITIATING PROCEEDING U/S 263 OF THE ACT, HOW EVER, AFTER CONSIDERING THE ASSESSEES DETAILED EXPLANATION, CI T DROPPED THE PROCEEDING U/S 263 BY ACCEPTING ASSESSEES EXPLANAT ION. THUS, IT WAS SUBMITTED THAT WHEN A HIGHER AUTHORITY HAS DROPPED THE PROCEEDING ON THE VERY SAME ISSUE, AO COULD NOT HAVE REOPENED AND COMPLETED THE ASSESSMENT AGAIN ON THE SAME ISSUE. FURTHER, LE ARNED AR SUBMITTED THAT ONCE THE BOOKS OF ACCOUNT WERE REJEC TED AND 5 ITA NO. 296/HYD/2014 M/S POCHAMPAD CONSTRUCTIONS PVT. LTD. ASSESSMENT WAS COMPLETED BY ESTIMATING THE PROFIT, ALL THE STATUTORY DISALLOWANCES/DEDUCTIONS AS PROVIDED U/S 30 TO 43D IS DEEMED TO HAVE BEEN TAKEN CARE OF IN VIEW OF THE RATIO LAID D OWN IN THE DECISION OF INDWELL CONSTRUCTIONS VS. CIT (SUPRA). THEREFORE , IT WAS SUBMITTED, AO WAS NOT JUSTIFIED IN MAKING DISALLOWANCE U/S 40( A)(IA) WHEN PROFIT HAS BEEN ESTIMATED BY REJECTING BOOKS OF ACCOUNT. I N THIS CONTEXT, HE RELIED ON THE DECISION OF ITAT, HYDERABAD BENCH IN CASE OF TEJA CONSTRUCTIONS VS. ITO. 7. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS OT HER MATERIALS ON RECORD. WE HAVE ALSO EXAMINED THE DECISIONS RELIED UPON BY THE PARTIES BEFORE US. AS CAN BE SEEN FROM THE FACTS AN D MATERIALS ON RECORD, IN THE PRESENT CASE, THE ORIGINAL ASSESSMEN T WAS COMPLETED U/S 143(3) ON 24/09/09. AFTER COMPLETION OF THE ORI GINAL ASSESSMENT, CIT INITIATED PROCEEDING U/S 263 OF THE ACT BY ISSU ING SHOW CAUSE NOTICE TO ASSESSEE ON 04/08/11 FOR THE FOLLOWING RE ASONS: I) YOU HAD CLAIMED A SUM OF RS. 3,88,33,945/- TOWAR DS PAYMENT TO SUBCONTRACTORS AS PER SCHEDULE OF DIRECT TAXES (P&L ACCOUNT ON 31/03/2007). OUT OF THIS AMOUNT, YOU HAD PAID A SUM OF RS. 3,31,14,970 TO SHRI CH. VARA PRASAD RAO AND RS. 57,18,996/- TO SHRI L. SUDHAKAR RAO. AS PER SECTION 194C ANY PERSON RESPONSIBLE FOR PAYING ANY SUM TO ANY RESID ENT FOR CARRYING OUT ANY WORK IN PURSUANCE OF A CONTRACT BE TWEEN THE CONTRACTOR AND A SPECIFIED PERSON SHALL, AT THE TIM E OF CREDIT OF SUCH SUM TO THE ACCOUNT OF THE CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER, DEDUCT AN AMO UNT EQUAL TO ONE PER CENT WHERE THE PAYMENT IS BEING MADE OR CRE DIT IS BEING GIVEN TO AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY. HOWEVER, NO TAX WAS DEDUCTED U/S 194C OF THE ACT BY YOU ON THE PAYMENTS MADE TO SUB CONTRACTS FOR A SUM OF RS. 3,88,33,945/ -. FURTHER, THE AO OUGHT TO HAVE DISALLOWED THIS SUM U/S 40(A)( IA) AND THIS RESULTED IN UNDERASSESSMENT OF YOUR TOTAL INCOME. IN RESPONSE TO THE SAID NOTICE, ASSESSEE SUBMITTED A DETAILED REPLY BY TAKING A SPECIFIC PLEA THAT THE ASSESSMENT ORDER CA NNOT BE CONSIDERED TO BE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVENUE AS THE AO AFTER REJECTING THE BOOKS OF ACCOUNT HAS ESTIMATED INCOME AT 5.5% 6 ITA NO. 296/HYD/2014 M/S POCHAMPAD CONSTRUCTIONS PVT. LTD. AND AS SUCH NO SEPARATE STATUTORY DISALLOWANCE U/S 40(A)(IA) CAN BE MADE IN VIEW OF DECISION OF HONBLE AP HIGH COURT IN CASE OF INDWELL CONSTRUCTIONS VS. CIT (SUPRA). WHEN THE REVISION PR OCEEDING WAS PENDING BEFORE THE CIT, AO REOPENED THE ASSESSMENT U/S 147 OF THE ACT. THE REASONS RECORDED FOR REOPENING OF THE ASSE SSMENT AS COMMUNICATED TO ASSESSEE VIDE LETTER DATED 16/07/12 ARE AS UNDER: IT IS OBSERVED THAT AN AMOUNT OF RS. 3,88,33,945/- WAS DEBITED TO P&L ACCOUNT TOWARDS PAYMENT TO SUB-CONTRACTORS. OUT OF THIS, AN AMOUNT OF RS. 3,31,14,977/- WAS PAID TO SHRI L. SUDARSHAN RAO (SUB-CONTRACTOR) AND TDS NEEDS TO BE DEDUCTED. THE DETAILS OF DEDUCTION AND REMITTANCE TO GOVERNMENT ACCOUNT A RE NOT FORTHCOMING FROM THE LEDGER ACCOUNT ENCLOSED WITH T HE RETURN. FOR FAILURE TO DEDUCT TAX U/S 194C OF IT ACT THE ENTIRE EXPENDITURE WAS REQUIRED TO BE DISALLOWED U/S 40(A)(IA) OF IT A CT, 1961. AS CAN BE SEEN FROM THE REASONS RECORDED, THE ISSUE RELATING TO REOPENING OF ASSESSMENT IS SAME AS THE ISSUE ON WHI CH REVISION PROCEEDING WAS INITIATED BY CIT. IT FURTHER TRANSPI RES FROM RECORD THAT CIT AFTER CONSIDERING THE SUBMISSIONS OF ASSESSEE I N REPLY DATED 19/09/11 TO THE SHOW CAUSE NOTICE ISSUED U/S 263, D ROPPED THE PROCEEDING INITIATED U/S 263, WHICH WAS COMMUNICATE D TO ASSESSEE VIDE LETTER DATED 19/02/13, A COPY OF WHICH IS PLAC ED AT PAGE 1 OF ASSESSEES PAPER BOOK. THEREFORE, WHEN CIT HAS DROP PED THE PROCEEDINGS U/S 263 ON THE VERY SAME ISSUE ON WHICH REOPENING OF ASSESSMENT WAS MADE, AO WAS NOT CORRECT IN EITHER I NITIATING PROCEEDING U/S 147 OR COMPLETING THE ASSESSMENT BY MAKING DISALLOWANCE U/S 40(A)(IA) ON SUBCONTRACT PAYMENTS. FURTHERMORE, ON A PERUSAL OF THE REASONS RECORDED, EXTRACTED HER EINABOVE, IT IS TO BE NOTED THAT AO HAS REOPENED THE ASSESSMENT ON THE BASIS OF P&L ACCOUNT, AND LEDGER ACCOUNT COPIES ENCLOSED ALONG WITH RETURN OF INCOME, WHICH NOT ONLY FORMED PART OF THE RECORD AT THE TIME OF ORIGINAL ASSESSMENT BUT WERE ALSO EXAMINED BY AO WH ILE COMPLETING ORIGINAL ASSESSMENT. FROM THE AFORESAID FACTS, IT I S CLEAR THAT NO FRESH AND TANGIBLE MATERIAL HAS COME TO THE POSSESS ION OF AO AFTER COMPLETION OF ORIGINAL ASSESSMENT ON THE BASIS OF W HICH AO HAS COME TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. FRO M THE REASONS 7 ITA NO. 296/HYD/2014 M/S POCHAMPAD CONSTRUCTIONS PVT. LTD. RECORDED IT IS PATENT AND OBVIOUS THAT ON THE BASIS OF THE VERY SAME MATERIALS WHICH WAS AVAILABLE AT THE TIME OF ORIGIN AL ASSESSMENT CONSIDERING WHICH ORIGINAL ASSESSMENT WAS COMPLETED , AO HAS REOPENED THE ASSESSMENT U/S 147 OF THE ACT. THEREF ORE, THERE BEING NO FRESH AND TANGIBLE MATERIAL BEFORE AO TO REOPEN ASSESSMENT, INITIATION OF PROCEEDING U/S 147 OF THE ACT ON REAP PRAISAL OF SAME FACTS AND MATERIALS CONSIDERED IN ORIGINAL ASSESSME NT AMOUNTS TO CHANGE OF OPINION AND THEREFORE IS INVALID. IN THIS CONTEXT, WE REFER TO THE DECISION OF THE HONBLE SUPREME COURT IN CASE O F CIT V KELVINATOR OF INDIA LTD., 320 ITR 561 SC WHEREIN IT WAS HELD THAT THE AO SHOULD HAVE COME INTO POSSESSION FRESH MATERIAL, SOMETHING TANGIBLE WHICH HAS LIVE NEXUS WITH THE IN COME ESCAPING ASSESSMENT. THOUGH THE DR HAS SUBMITTED BE FORE US THAT BOOKS OF ACCOUNT WERE NOT REJECTED AS ASSESSEE HAS NEVER PRODUCED BOOKS OF ACCOUNT, IN OUR VIEW, SUCH CONTENTION OF THE LEARNED DR IS DEVOID OF MERIT. A BARE PERUSAL OF THE ORIGINAL ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT, MAKES IT CLEAR THAT ONLY BECAUSE BOOKS OF ACCOUNT, BILLS AND VOUCHERS ARE NOT AVAILABLE, AO PROPOSED T O REJECT THE BOOK RESULT AND ESTIMATE THE PROFIT AND ACCOR DINGLY ASSESSMENT WAS COMPLETED BY ESTIMATING THE PROFIT A T 5.5% CLEAR OF DEDUCTIONS AND EXPENSES. THEREFORE, IT CA NNOT BE SAID THAT BOOKS OF ACCOUNT OF ASSESSEE WERE NOT REJ ECTED. THAT BEING THE CASE, LEARNED CIT(A), IN OUR VIEW, W AS CORRECT IN HOLDING THAT ONCE BOOKS OF ACCOUNT ARE REJECTED, THE AO CANNOT REOPEN THE ASSESSMENT FOR MAKING SPECIFIC DISALLOWANCES RELYING UPON THE SAME BOOKS OF ACCOUN T. FOR COMING TO SUCH CONCLUSION, WE PLACE RELIANCE ON THE DECISIONS OF THE HONBLE JURISDICTIONAL HIGH COURT IN CASE OF INDWELL CONSTRUCTIONS VS. CIT (SUPRA) AND OF ITAT, KOLKATA SPECIAL BENCH IN CASE OF ITO VS. KENARAM SAHA & SUBHASH SAH A, 301 8 ITA NO. 296/HYD/2014 M/S POCHAMPAD CONSTRUCTIONS PVT. LTD. ITR 171 (AT). CONSIDERING TOTALITY OF FACTS AND CI RCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT INITIATION OF PROCEEDING U/S 147 OF THE ACT, IN THE PRESENT CASE IS NOT VALI D. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE OR DER OF LEARNED CIT(A) IN QUASHING THE ASSESSMENT. GROUNDS RAISED BY REVENUE ARE DISMISSED. AS THE PROCEEDING INITIA TED U/S 147 IS HELD TO BE INVALID, MERITS OF THE DISALLOWAN CE MADE U/S 40(A)(IA) IS OF MERE ACADEMIC INTEREST, HENCE, NOT REQUIRED TO BE ADJUDICATED. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON 29 TH OCTOBER14. SD/- SD/- (P.M. JAGTAP) (S AKTIJIT DEY) ACCOUNTANT MEMBER JU DICIAL MEMBER HYDERABAD, DATED: 29 TH OCTOBER, 2014 KV COPY TO:- 1) DCIT, CIRCLE 16(3), HYDERABAD. 2) M/S PCHAMPAD CONSTRUCTIONS CO. PVT. LTD. 3) CIT(A)-V, HYDERABAD 4) CIT-IV, HYDERABAD 5)THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDER ABAD.