DCIT, Circle-2(1), Hyd, Hyderabad V. IWM Constructions (P) Limited, Sec'bad, Secunderabad

ITA 317/HYD/2015

• Counselvise Citation: 31722514 RSA 2015
• Duration Of Justice: 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2015
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 13-11-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 30-03-2015
• Court: TRIBUNAL
• Department Lawyers: E SUNIL BABU
• Keywords: Reopening of assessment; Reassessment proceedings
• Section: 147; 144

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. 317/HYD/2015 ASSESSMENT YEAR: 2005-06 DEPU T Y COMMISSIONER OF INCOME TAX, CIRCLE-2(1), HYDERABAD VS M/S. IWM CONSTRUCTIONS PRIVATE LIMITED, SECUNDERABAD [PAN: AAACI8728C] (APPELLANT) (RESPONDENT) C.O. NO. 22/HYD/2015 (IN ITA NO. 317/HYD/15) ASSESSMENT YEAR: 2005-06 M/S. IWM CONSTRUCTIONS PRIVATE LIMITED, SECUNDERABAD [PAN: AAACI8728C] VS DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2(1), HYDERABAD ( CROSS - OBJECTOR ) (RESPONDENT) FOR REVENUE : S HRI E. SUNIL BABU, DR FOR ASSESSEE : S HRI RAVI BHAR A DWAJ, AR DATE OF HEARING : 1 3 - 11 - 201 5 DATE OF PRONOUNCEMENT : 20 - 1 1 - 2015 O R D E R PER B. RAMAKOTAIAH, A.M. : REVENUE HAS PREFERRED AN APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-2, HYDERABAD D ATED 27-01-2015, IN WHICH LD. CIT(A) ACCEPTED ASSESSEES CONTENTIONS I.T.A. NO. 317/HYD/15 C.O. NO. 22/HYD/15 IWM CONSTRUCTIONS PVT. LTD., :- 2 -: THAT REOPENING OF ASSESSMENT AND INITIATION OF PROC EEDINGS U/S. 147 OF THE INCOME TAX ACT [ACT] IS TO BE TREATED AS BAD IN LAW. HE QUASHED THE REASSESSMENT PROCEEDINGS AS RAISED IN G ROUND NOS. 1, 2 & 3 BEFORE HIM AND OTHER GROUNDS ON MERITS WERE T REATED AS ACADEMIC IN NATURE AND WERE NOT ADJUDICATED UPON AS THE JURISDICTION ON REASSESSMENT U/S. 147 WAS NOT SUSTA INED. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS IN RESPONSE TO THE ORDER OF THE CIT(A): 1. THE ORDER OF THE CIT(A) IN HOLDING THAT THE AO REJECTED THE BOOKS OF ACCOUNT CONTRARY TO THE FACTS AVAILABL E ON RECORD. THE ASSESSEE NEVER PRODUCED THE BOOKS OF ACCOUNT AN D THE ASSESSMENT WAS COMPLETED BY THE A.O U/S. 144 OF I.T . ACT BY ESTIMATING INCOME @ 12.5%. HENCE, THE DIRECTIONS O F CIT(A) ESTIMATING THE INCOME @ 8% IS NOT IN ORDER. 2. THE DECISION OF THE CIT(A) IS CONTRARY TO THE FA CTS OF THE CASE LAW RELIED UPON IN THE CASE OF (I) M/S. KNR CO NSTRUCTIONS (ITA NO.9/HYD/07, DT. 30.11.2009) AND (II) M/S. TEJ A CONSTRUCTIONS (129 TTJ (HYD) (UO) 57). IN THESE CA SES, THE ASSESSEE APPEARED BEFORE THE A.O AND PRODUCED THE B OOKS OF ACCOUNT WHICH WERE REJECTED BY THE ASSESSING OFFICE R. 3. THE DECISION OF THE CIT(A) IN DIRECTING THE A.O. , TO ASSESSEE THE INCOME @ 8% ON GROSS RECEIPTS IS NOT A CCEPTABLE AS THE ASSESSEE NEVER PRODUCED THE BOOKS OF ACCOUNT . 3. AS SEEN FROM THE ASSESSMENT ORDER, THE ONLY ISSU E ON WHICH ASSESSMENT WAS REOPENED WAS THAT INTEREST INCOME OF RS. 1,70,154/- WAS NOT OFFERED TO INCOME, WHICH WAS ONL Y ADDITION MADE IN THE ASSESSMENT ORDER. THUS, THE GROUNDS RA ISED ARE NOT AT ALL CONNECTED TO THE ISSUE EITHER RAISED IN THE ASS ESSMENT ORDER OR THE ISSUE DECIDED BY THE LD. CIT(A) IN THE APPELLAT E ORDER. I.T.A. NO. 317/HYD/15 C.O. NO. 22/HYD/15 IWM CONSTRUCTIONS PVT. LTD., :- 3 -: 4. IT IS ALSO NOTICED THAT REVENUE APPEAL HAS FILED WITHOUT FORM 35 ENCLOSURES. 5. ON 29-10-2015, WHEN THE CASE WAS TAKEN UP, LD. D R WAS PRESENT AND IT WAS SPECIFICALLY NOTED ON THE RECORD SHEET AS UNDER: DESPITE POINTING OUT THE DEFECT IT WAS NOT RECTIFI ED SO FAR. LD. COUNSEL SUBMITS THAT GROUNDS ARE NOT EMANATING FROM APPEAL ORDER. LD. DR SEEKS TIME TO FILE REVISED GR OUNDS. IN FACT, HE SUBMITTED THAT REVISED GROUNDS ARE ALREADY FILED IN THE REGISTRY. HOWEVER, COPY WAS NOT PLACED IN THE FILE . THE BENCH ALSO DIRECTED THE DR TO CLARIFY AS TO WHETHER THE C OMMISSIONER IN EXERCISE OF POWERS U/S. 253(2) NEEDS TO DIRECT T HE AO TO FILE AN APPEAL OR TO APPROVE THE GROUNDS OF APPEAL ALSO. AS LAST CHANCE POSTED ON 13-11-2015. BOTH THE PARTIES INFO RMED IN THE OPEN COURT. 6. THIS CASE WAS TAKEN UP TODAY AND IN THE CAUSE LI ST IT WAS SPECIFICALLY MENTIONED THAT CASE WAS POSTED FOR DI SMISSAL FOR DEFECTS. IN SPITE OF THAT, LD. DR SOUGHT ADJOURNM ENT STATING THAT THE REVISED GROUNDS OF APPEAL ARE NOT YET RECEIVED FROM AO CONCERNED. HE HAS NOT ADDRESSED THE BENCH AS POWER S OF CIT U/S. 253(2), WHETHER CIT HAS TO SIMPLY OR MECHANICALLY A PPROVE FILING OF APPEAL OR HE HAS TO APPROVE THE GROUNDS THAT ARE BE ING RAISED BEFORE THE ITAT ALSO. SINCE SPECIFIC CHANCE WAS GI VEN ON 29-10- 2015, POSTING THE CASE ON 13-11-2015, WE ARE NOT IN A POSITION TO CONSIDER THE REQUEST FOR ADJOURNMENT. MOREOVER APPE AL FILE IS DEFECTIVE AND NOT PROPER. IN FACT, LD. DR FAIRLY C ONCEDED THAT THERE WAS NO NOTING ON HIS FILE ABOUT THE DIRECTIONS GIVE N BY THE BENCH ON EARLIER OCCASION. NO PURPOSE WOULD BE SERVED IF WE GIVE TIME FOR THE REVENUE, WHEN APPEAL ITSELF IS FILED MECHANICAL LY AND WITHOUT ANY APPLICATION OF MIND. THEREFORE, WE ARE OF THE OPINION THAT THIS APPEAL FILED BY THE REVENUE SHOULD BE DISMISSED. I F REVENUE STILL INTENDS TO PURSUE PROPER APPEAL, IT IS FOR THE CIT, TO APPROVE THE I.T.A. NO. 317/HYD/15 C.O. NO. 22/HYD/15 IWM CONSTRUCTIONS PVT. LTD., :- 4 -: NECESSARY GROUNDS AND FILE AFRESH APPEAL, SEEKING C ONDONATION IF ANY AS REQUIRED. SINCE THE GROUNDS RAISED IN THIS A PPEAL ARE NOT AT ALL CONNECTED TO THE ISSUE INVOLVED, THERE IS NO NE ED FOR ANY ADJUDICATION ON THE GROUNDS AS FILED BY REVENUE. H ENCE, GROUNDS RAISED ARE REJECTED AND APPEAL IS DISMISSED. 7. CROSS OBJECTION IS IN SUPPORT OF ACTION OF THE C IT(A), THAT BECOMES ACADEMIC IN NATURE. SINCE WE DISMISSED RE VENUES APPEAL, CROSS OBJECTION IS ALSO TREATED AS DISMISSE D. 8. IN THE RESULT, BOTH REVENUES APPEAL AND C.O. AR E DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH NOVEMBER, 2015 SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMBE R HYDERABAD, DATED 20 TH NOVEMBER, 2015 TNMM I.T.A. NO. 317/HYD/15 C.O. NO. 22/HYD/15 IWM CONSTRUCTIONS PVT. LTD., :- 5 -: COPY TO : 1. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2(1), 8 TH FLOOR, B - BLOCK, I.T. TOWERS, A.C. GUARDS, HYDERABAD. 2. M/S. IWM CONSTRUCTIONS (P) LIMITED, 201, C/O. CHAKRADHAR & NANDAN, S D ROAD, SRINATH RESIDENTIAL COMPLEX, SECUNDERABAD. 3. CIT (APPEALS)-2, HYDERABAD. 4. CIT-2, HYDERABAD. 5 . D.R. ITAT, HYDERABAD. 6 . GUARD FILE.