Dy.Commissioner of Income Tax, Central Circle-4, Hyderabad V. M/s Fancy Silks, Hyderabad

ITA 440/HYD/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7707 (ITAT-HYDERABAD)
• Duration Of Justice: 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 14-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: BHAVESH R VITHLANI
• Keywords: Search and seizure; Assessment record; Documents seized
• Section: 143(3); 153A; 6; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA.NO. A.Y. APPELLANT RESPONDENT 439/H/2014 2004-05 DCIT, CENTRAL CIRCLE-4, HYDERABAD M/S. FANCY SILKS, HYDERABAD PAN AABFF1583C 440/H/2014 2005-06 441/H/2014 2006-07 442/H/2014 2007-08 443/H/2014 2008-09 444/H/2014 2009-10 ITA.NO. A.Y. APPELLANT RESPONDENT 445/H/2014 2004-05 DCIT, CENTRAL CIRCLE-4, HYDERABAD. M/S. FANCY CLOTHS, HYDERABAD. PAN AABFF1581A 446/H/2014 2005-06 447/H/2014 2006-07 448/H/2014 2007-08 449/H/2014 2008-09 450/H/2014 2009-10 FOR REVENUE : MR. RAJAT MITRA FOR ASSESSEE : MR. BHAVESH R. VITHLANI DATE OF HEARING : 08.12.2014 DATE OF PRONOUNCEMENT : 29.12.2014 ORDER PER B. RAMAKOTAIAH, A.M. THESE ARE 12 APPEALS EMANATING FROM THE ORDERS DATED 18.11.2013 BY LD. CIT(A) PASSED SEPARATELY IN CASE OF M/S. FANCY SILKS AND M/S. FANCY CLOTHS, HYDERABAD A RISING OUT OF ORDERS OF A.O. UNDER SECTION 143(3) READ WIT H SECTION 153C DATED 27.12.2010. 2 ITA.NOS.439 TO 444/HYD/2014 M/S. FANCY SILKS & ITA.NOS. 445 TO 450/HYD/2014 M/S. FANCY CLOTHS, HYDERABAD. 2. BRIEFLY STATED, ASSESSEE FIRMS ARE ENGAGED IN T HE BUSINESS OF TEXTILE DEALERSHIP AND THERE WERE SURVE Y OPERATIONS IN THIS CASE IN CONNECTION WITH SEARCH AND SEIZURE PROCEEDINGS CONDUCTED IN THE CASE OF PARTNERS MR. VIMAL KUMAR S ONTHALIA AND MR. ESWARLAL SONTHALIA AND COMPAQNY M/S. SUNDE R STEELS LTD WHERE THEY ARE DIRECTORS. A.O. INITIATE D PROCEEDINGS UNDER SECTION 153C ON BOTH THE FIRMS AND MADE VARIO US DISALLOWANCES AND MADE ADDITIONS BY ESTIMATING THE NET PROFIT AT 5%, AS AGAINST RETURNED INCOMES SHOWN BY ASSESSE E IN RESPECTIVE ASSESSMENT YEARS. THE REASON FOR REJECTI NG THE BOOKS OF ACCOUNTS WAS BY MERELY OBSERVING THAT THE STOCK DETAILS WERE NOT MAINTAINED AND EXPENSES WERE INFLA TED TO REDUCE THE PROFITS. ASSESSEE CONTESTED THE MATTERS BEFORE LD. CIT(A) NOT ONLY ON MERITS BUT ALSO ON JURISDICTION. IT WAS THE CONTENTION OF ASSESSEE THAT THERE WAS NO INCRIMINAT ING MATERIAL IN THE SEARCH CASES AND THEREFORE, PROCEED INGS UNDER SECTION 153C CANNOT BE INITIATED IN THESE CASES. LD . CIT(A) NOTICED THAT THERE WAS NO INCRIMINATING MATERIAL AT ALL AND THEREFORE, THE PROCEEDINGS INITIATED UNDER SECTION 153C ARE BAD IN LAW. HIS ORDER IN M/S FANCY SILKS FOR A.Y. 2004 -05 TO 2009- 2010 VIDE PARA 5.2 TO 5.3 ARE AS UNDER : 5.2. PERUSED THE OBSERVATIONS OF THE A.O. AND SUBMISSIONS OF THE APPELLANT. AS COULD BE SEEN FROM THE FACTS OF THE CASE, SEARCH PROCEEDINGS HAVE TAKEN PL ACE IN THE CASE OF PARTNERS OF THE APPELLANT FIRM NAMELY M R. VIMAL KUMAR SONTHALIA AND MR. ISWARLAL SONTHALIA AND SURV EY PROCEEDINGS IN THE CASE OF APPELLANT FIRM ON 29.01. 2009, AND SOME INCRIMINATING MATERIAL APPEARS TO HAVE BEE N FOUND AT THE SEARCH PREMISES, AS PER THE INFORMATION BROUGHT ON RECORD. HOWEVER, NEITHER THE DETAILS AND CONTENTS OF SUCH SEIZED MATERIAL WERE MADE KNOWN NOR, THEY ARE ESTABLISHED TO BE LINKED TO THE APPEL LANT, AS COULD BE SEEN FROM THE ASSESSMENT ORDER, THOUGH IT WAS OBSERVED THAT ASSESSING OFFICER WAS REFERRING T O 3 ITA.NOS.439 TO 444/HYD/2014 M/S. FANCY SILKS & ITA.NOS. 445 TO 450/HYD/2014 M/S. FANCY CLOTHS, HYDERABAD. THE EXAMINATION OF DETAILS FILED BY THE ASSESSEE WI TH REFERENCE TO INFORMATION GATHERED DURING COURSE OF SEARCH OPERATIONS. IT WAS ALSO OBSERVED THAT THE NO TICE U/S. 153C ISSUED IS NOT BASED ON THE INFORMATION BORNE OUT OF THE SEIZED MATERIAL, AS NO SUCH FINDIN G WAS GIVEN IN ASSESSMENT ORDER EXCEPT TO MENTION THA T NOTICE U/S. 153C WAS ISSUED TO VERIFY THE MATERIAL FOUND AT THE RESIDENCE OF MR. ISWARLAL SONTHALIA. I N THIS CONTEXT IT IS RELEVANT TO REFER TO THE PROVISIONS O F 153C OF THE ACT, WHICH READ AS UNDER: 153C. [(L)J NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 153, WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY MONEY, BULLION, JEWEL LERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCO UNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED T O IN SECTION 153A, THEN THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTH ER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESS OR REASSESS INCOME OF SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A:] [PROVIDED THAT IN CASE OF SUCH OTHER PERSON, THE REFERENCE TO THE DATE OF INITIATION OF THE SEARCH U NDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A IN THE SECOND PROVISO TO [SUB-SECTION (1) OF ] SECTION 153A SHALL BE CONSTRUED AS REFERENCE TO THE DATE OF RECEIVING THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON : ] [PROVIDED FURTHER THAT THE CENTRAL GOVERNMENT MAY BY RULES MADE BY IT AND PUBLISHED IN THE OFFICIAL GAZETTE, SPECIFY THE CLASS OR CLASSES OF C ASES IN RESPECT OF SUCH OTHER PERSON, IN WHICH THE ASSESSING OFFICER SHALL NOT BE REQUIRED TO ISSUE NOTICE FOR ASSESSING OR REASSESSING THE TOTAL INCOM E FOR SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED OR REQUISITION IS MADE 4 ITA.NOS.439 TO 444/HYD/2014 M/S. FANCY SILKS & ITA.NOS. 445 TO 450/HYD/2014 M/S. FANCY CLOTHS, HYDERABAD. EXCEPT IN CASES WHERE ANY ASSESSMENT OR REASSESSMENT HAS ABATED.] [(2) WHERE BOOKS OF ACCOUNTS OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED AS REFERRED TO IN SUB- SECTION (1) HAS OR HAVE BEEN RECEIVED. BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AFTER THE DUE DATE FOR FURNISHING THE RETURN OF INCOME FO R THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED UNDER SECTION 132 OR REQUISITION IS MADE UNDER SECTION 132A AND IN RESPECT OF SUCH ASSESSMENT YEAR- (A) NO RETURN OF INCOME HAS BEEN FURNISHED BY SUCH OTHER PERSON AND NO NOTICE UNDER SUB-SECTION (1) OF SECTION 142 HAS BEEN ISSUED TO HIM, OR (B) A RETURN OF INCOME HAS BEEN FURNISHED BY SUCH OTHER PERSON BUT NO NOTICE UNDER SUB-SECTION (2) OF SECTION 143 HAS BEEN SERVED AND LIMITATION OF SERVING THE NOTICE UNDER SUB-SECTION (2) OF SECTION 143 HAS EXPIRED, OR (C) ASSESSMENT OR REASSESSMENT, IF ANY, HAS BEEN MADE, BEFORE THE DATE OF RECEIVING THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON, SUCH ASSESSING OFFICER SHALL ISSUE THE NOTICE AND ASSESS OR REASSESS TOTAL INCOME OF SUCH OTHER PERSON OF SUCH ASSESSMENT YEAR IN THE MANNER PROVIDED IN SECTION 153A.] 153A. [ (L) ] NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 153, IN THE CASE OF A PERSON WHERE A SEARCH IS INITIATED UNDER SECTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER SECTION 132A AFTER THE 31ST DAY OF MAY, 2003, THE ASSESSING OFFICER SHALL- (B) ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN 5 ITA.NOS.439 TO 444/HYD/2014 M/S. FANCY SILKS & ITA.NOS. 445 TO 450/HYD/2014 M/S. FANCY CLOTHS, HYDERABAD. WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE: PROVIDED THAT THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SUCH SIX ASSESSMENT YEARS: PROVIDED FURTHER THAT ASSESSMENT OR REASSESSMENT, IF ANY, RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX ASSESSMENT YEARS REFERRED TO IN THIS [SUB-SECTION] PENDING ON THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A, AS THE CASE MAY BE, SHALL ABATE: [PROVIDED ALSO THAT THE CENTRAL GOVERNMENT MAY BY RULES MADE BY IT AND PUBLISHED IN THE OFFICIAL GAZETTE (EXCEPT IN CASES WHERE ANY ASSESSMENT OR REASSESSMENT HAS ABATED UNDER THE SECOND PROVISO), SPECIFY THE CLASS OR CLASSES OF CASES IN WHICH THE ASSESSING OFFICER SHALL NOT BE REQUIRED T O ISSUE NOTICE FOR ASSESSING OR REASSESSING THE TOTAL INCOME FOR SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED OR REQUISITION IS MADE.] AS COULD BE SEEN FROM THE PROVISIONS OF SEC. 153A, THE A.O IS ENTITLED TO ASSESS OR RE-ASSESS THE TOTA L INCOME OF SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR, RELEVANT TO PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED U/S. 132 OR REQUISITION U/S. 132A WAS MADE. IN CASE OF PROVISIONS U/S. 153C, THE LANGUAGE IS SPECIFIC TO INDICATE THAT 'ANY MONEY, BULLION, THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESS OR REASSESS INCOME OF SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A' 6 ITA.NOS.439 TO 444/HYD/2014 M/S. FANCY SILKS & ITA.NOS. 445 TO 450/HYD/2014 M/S. FANCY CLOTHS, HYDERABAD. IN THE CASE UNDER REFERENCE, THERE IS NO MENTION OF SUCH DOCUMENTS OR VALUABLES RELATABLE TO THE ASSESSEE, TO INITIATE THE PROCEEDINGS AGAINST THE APPELLANT, AS SUCH RENDERING THE PROCEEDINGS INITIATED U/S. 153C, QUESTIONABLE. FURTHER, NO BASE OR INFORMATION RELATABLE TO FINDINGS OF SEARCH RELEVANT TO THE ASSESSEE WERE INDICATED IN ASSESSMENT ORDER FOR MAKING THE ADDITIONS. IN THIS CONTEXT, IS RELEVANT TO REFER TO THE DECISION OF IT AT, HYDERABAD IN THE CASE OF PRASAD & COMPANY PROJECT WORKS (ITA NO. 1419 & 1420/HYD/2010) ON SIMILAR ISSUE, WHERE IN THE HON'BLE ITAT HELD AS UNDER: 'LAW IS WELL SETTLED BY JUDICIAL PRONOUNCEMENTS THAT THE DETERMINATION OF UNDISCLOSED INCOME CONSEQUENT TO SEARCH ACTION IS DIFFERENT FROM REGULAR ASSESSMENT AND IT IS NOT A SUBSTITUTE FOR REGULAR ASSESSMENT. IN CASE OF A SEARCH ASSESSMENT, THE AO HAS TO DETERMINE THE UNDISCLOSED INCOME ON THE BASIS OF INCRIMINATING MATERIAL FOUND AS A RESULT OF SEARCH AND SEIZURE OPERATION. THE AO CANNOT RELY UPON THE BOOKS OF ACCOUNTS MAINTAINED IN REGULAR COURSE OF BUSINESS AND WHICH WERE SUBJECT MATTER OF REGULAR ASSESSMENT FOR THE PURPOSE OF MAKING SEARCH ASSESSMENT UNLESS INCRIMINATING MATERIAL WERE FOUND AS A RESULT OF SEARCH WHICH DISCLOSED INCOME EARNED BY THE ASSESSEE WHICH WERE NOT REFLECTED IN THE BOOKS OF ACCOUNTS OR DECLARED BY THE ASSESSEE. IN THE CASE ON HAND, ON PERUSAL OF MATERIALS ON RECORD, IT IS CLEAR THAT THERE IS NO INCRIMINATING MATERIAL FOUND AS A RESULT OF SEARCH ON THE BASIS O F WHICH THE ADDITION HAS BEEN MADE. THE AO HAS CONSIDERED MATERIALS WHICH IS THE SUBJECT MATTER OF REGULAR ASSESSMENT. ON THE AFORESAID CIRCUMSTANCES, WE ARE OF THE VIEW THAT IN ABSENCE OF ANY INCRIMINATING MATERIAL FOUND AS A RESULT OF SEARCH, THE ADDITION MADE U/S 153A CANNOT BE SUSTAINED AND THE ASSESSMENT MADE IS ALSO UNSUSTAINABLE IN LAW. ' 5.3. ON FACTS THERE IS NO EVIDENCE TO INDICATE THAT THE SEIZED MATERIAL FOUND EITHER AT THE RESIDE NCE OF MR. VIMAL KUMAR SONTHALIA OR MR. ISWARLAL SONTHALIA, IS RELATABLE TO THE FIRM AND FORMED BASI S FOR INITIATING THE PROCEEDINGS U/S. 153C, AS PER THE 7 ITA.NOS.439 TO 444/HYD/2014 M/S. FANCY SILKS & ITA.NOS. 445 TO 450/HYD/2014 M/S. FANCY CLOTHS, HYDERABAD. CONDITIONS STIPULATED IN THE RELEVANT PROVISIONS. I N THIS CASE ADDITIONS WERE MADE FOR EACH YEAR BY ESTIMATING THE NET PROFIT @ 5 % , AS AGAINST NET PROFITS OF 0.57 0 /0, 0.59%, 0.54%, 0.64%, 0.73% AND 0.94% FOR AY 2004-05, 05-06, 06-07, 07-08, 08-09 AND 09- 10 RESPECTIVELY, SHOWN BY THE APPELLANT IN BOOKS, B Y MERELY OBSERVING THAT STOCK DETAILS ARE NOT MAINTAINED AND EXPENSES WERE INFLATED TO REDUCE PROFITS, AND ESTIMATION WAS MADE WITHOUT EXPRESSLY REJECTING THE BOOKS OF ACCOUNT. EVEN IF IT IS ASSUM ED THAT BOOKS OF ACCOUNT WERE REJECTED BY IMPLIED REASONS, THERE WAS A RESPONSIBILITY CAST ON THE ASSESSING OFFICER TO ARRIVE AT THE BASIS FOR ADOPTI NG THE REASONABLE RATE OF NET PROFIT, EITHER BASED ON THE FACTS OF APPELLANT'S OWN CASE OR ON THE BASIS OF INFORMATION RELATABLE TO OTHER ASSESSES IN SIMILAR TRADE/BUSINESS. THUS, THE BASIS ADOPTED BY THE ASSESSING OFFICER IN THIS CASE, IS NEITHER SUPPORTE D BY FACTS NOR THE JUDICIAL DECISIONS. FURTHER, THERE WAS NO INDICATION THROUGH THE FINDINGS OF SEARCH IN CASE OF PARTNERS OF FIRM OR THE SURVEY PROCEEDINGS IN CASE OF APPELLANT FIRM, TO INDICATE THAT THE EXPENS ES WERE INFLATED TO REDUCE THE PROFIT, AS OBSERVED BY THE ASSESSING OFFICER. UNDER THE CIRCUMSTANCES, IT IS H ELD THAT THE ADDITIONS AS RESORTED BY THE ASSESSING OFFICER HAVE NO LEGS TO STAND, SINCE SUCH ADDITIONS WERE MADE NEITHER ON BASIS OF THE FACTS OF THE APPELLANT'S OWN CASE NOR IN COMPARATIVE CASES. THER E WERE NO ADDITIONAL FINDINGS TO THIS EXTENT THOUGH SEARCH/SURVEY PROCEEDINGS TOOK PLACE IN THIS GROUP. HENCE, THE ADDITIONS ARE HELD TO BE MADE ON SURMISES AND PROBABILITIES, AND WITHOUT ANY BASIS. CATENA OF JUDICIAL DECISIONS SUPPORT THE VIEW THAT THE ASSESSING OFFICER IS NOT EMPOWERED TO MAKE ADDITIONS ON SURMISES AND SUCH ADDITIONS WILL NOT HAVE ANY LEGS TO STAND. THIS FINDING HAS MORE RELEVANCE, FOR THE SEARCH BASED ASSESSMENTS, AS IN THE INSTANT CASE. THUS, BASED ON THE FACTS, I AM OF THE CONSIDERED OPINION THAT THERE IS NO BASIS FOR T HE ASSESSING OFFICER FOR MAKING THE ADDITIONS TO THE T OTAL INCOMES WITHOUT REJECTING THE BOOKS AND WITHOUT POINTING OUT ANY SPECIFIC DEFECTS. ACCORDINGLY, THE ASSESSMENT OF TOTAL INCOMES OF RS. 7,72,985/-, RS. 8,20,898/-, RS. 9,33,963/-, RS. 10,31,326/- AND RS. 9,87,908/- FOR THE ASSESSMENT YEARS 2004-05, 2005-06, 2006-07, 2007-08 AND 8 ITA.NOS.439 TO 444/HYD/2014 M/S. FANCY SILKS & ITA.NOS. 445 TO 450/HYD/2014 M/S. FANCY CLOTHS, HYDERABAD. 2008-09, RESPECTIVELY, MADE ON ESTIMATION BASIS, STAND NULLIFIED FOR LACK OF JURISDICTION AS WELL AS THE BASIS FOR MAKING ADDITIONS AND THE RETURNED/ADMITTED INCOMES, AS PER THE RETURNS OF INCOMES FILED BY THE APPELLANT, STAND RESTORED. SIMILARLY, THE ADDITION OF RS. 6,64,382/- MADE FOR THE AY 2009-10 IS ORDERED TO BE DELETED, BASED ON FACTS AND FOR WANT OF BASIS. 6.0 IN THE RESULT, THE APPEALS ARE ALLOWED . 3. REVENUE IS AGGRIEVED. IN THE COURSE OF PRESENT PROCEEDINGS, LEARNED D.R. WAS ASKED TO FURNISH THE EVIDENCE IF ANY, OF INCRIMINATING MATERIAL RELATING TO ASSESSEE S SO THAT PROCEEDINGS UNDER SECTION 153C COULD BE INITIATED. LEARNED D.R. HOWEVER, PRODUCED THE ASSESSMENT RECORDS AND C OPY OF THE APPRAISAL REPORT FOR PERUSAL OF THE BENCH BEING CONFIDENTIAL IN NATURE. AFTER SEEING THE ASSESSMENT RECORDS/ORDE R SHEETS AND COPY OF THE APPRAISAL REPORT PRESENTED BEFORE U S, WE CONFIRM THE FINDING OF LD. CIT(A) THAT THERE IS NO INCRIMINATING MATERIAL AT ALL IN THESE CASES FOR INITIATING THE P ROCEEDINGS UNDER SECTION 153C AGAINST THE ASSESSEES. CONSEQUEN TLY, WITHOUT GOING INTO THE LEGAL PRINCIPLES WITH WHICH WE ALSO AGREE, WE HOLD THAT PROCEEDINGS INITIATED BY A.O. A RE AB INITIO VOID FOR LACK OF JURISDICTION. MOREOVER, EVEN FOR MAKIN G ADDITIONS TO THE RETURN OF INCOME ON ESTIMATED BASI S, THERE IS NO BASIS AT ALL. IN VIEW OF THIS, WE FIND THAT THER E IS NO MERIT IN REVENUE APPEALS. ACCORDINGLY, GROUNDS RAISED IN RES PECTIVE YEARS ARE HEREBY DISMISSED. 4. IN THE RESULT, APPEALS OF THE REVENUE ARE DISMISSED. 9 ITA.NOS.439 TO 444/HYD/2014 M/S. FANCY SILKS & ITA.NOS. 445 TO 450/HYD/2014 M/S. FANCY CLOTHS, HYDERABAD. ORDER PRONOUNCED IN THE OPEN COURT ON 29.12.2014. SD/- SD/- (SAKTIJIT DEY) (B.RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 29 TH DECEMBER, 2014 VBP/- COPY TO 1. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-4, HYDERABAD. 2. M/S. FANCY CLOTHS, 21-2-28, URDUGALLI, PATHERGATTI, HYDERABAD. 3. M/S. FANCY SILKS, 4-1-970/C/17, AHUJA ESTATE, ABIDS , HYDERABAD. 3. CIT(A)-VI, HYDERABAD 4. CIT (CENTRAL), HYDERABAD 5. D.R. ITAT B BENCH, HYDERABAD.