Dy. Commissioner of Income Tax , Circle-1(2), Hyderabad V. Coastal Projects Private Limited , Hyderabad

ITA 497/Hyd/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 5899 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-A
• Assessment Year: 2010-2011
• Appeal Filed On: 04-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Reason to believe; TDS
• Section: 68; 69; 148; 139; 143(3); 153A; 274; 207; 73; 13; 153

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “A”: HYDERABAD BEFORE SH RI SAT B EER S INGH GO DA RA , JU DI CIA L MEMBE R AND SHR I L AXMI PR AS A D SAHU , AC COUNT ANT MEMBE R ITA No. 497/Hyd/2019 and CO No. 16/Hyd/2019 Assessment Year: 2010-11 Dy. Commissioner of Income-tax, Circle – 1(2), Hyderabad. Vs. Coastal Projects Pvt. Ltd., Hyderabad. PAN – AABCC 1907E (Appellant) (Respondent) Revenue by: Shri Rajendra Kumar Assessee by: Shri H. Srinivasulu Date of hearing: 17/03/2022 Date of pronouncement: /03/2022 O R D E R PER L.P. SAHU, A.M.: This appeal filed by the Revenue is directed against CIT(A) – 1, Hyderabad’s order dated 08/01/2019 for AY 2010-11 involving proceedings u/s 143(3) r.w.s. 147 of the Income Tax Act, 1961 ; in short “the Act. The assessee also filed C.O. against the said order of the CIT(A). 2. First we dispose of the C.O wherein the assessee has raised the following cross objections: ITA No.. 497/Hyd/2019 and CO 16/H/2019 Coastal Projects Pvt. Ltd., Hyd. :- 2 -: “1. Learned CIT(A) has erred on facts and in law while passing her appellate order. 2. (a) Learned CIT (A) is not justified in ignoring the several objections along with case law raised against the reopening of assessment made u/s. 143(3) r.w.s. 153A more than four years after the end of the Assessment Year. (b) Learned CIT(A) is not justified in not accepting the applicability of the judgment of jurisdictional High Court of Telangana & Andhra Pradesh in the case of CIT Vs. Quality Care India Ltd [20161 74 taxmann.com 45(AP) according to which assessment made uj s. 143(3) r.w.s 153A in search case cannot in law be reopened u/s. 147 of the I.T. Act. 3. Standard Operating Procedure (SOP) laying down successive steps by CBDT for reopening assessment has not been followed at all. 4. A.O had no belief u/s. 147 at the time of recording the reasons u/s. 148(2) which is clear from the order sheet entry recorded after issue of notice u/s. 148(2) forwarding letter to the Investigation Wing for reasons to reopen the assessment. 5. A.O recorded the alleged transaction of the assessee with one Trishul Vinimay Ltd as reason for reopening the assessment, while completing assessment A.O has not referred to any transaction with Trishul Vinimay Ltd. Reopening cannot be justified on any other reason than the one on the basis of which, reasons are recorded u/s. 148(2) of the I.T. Act. 6. The belief entertained is not the A.O’s own belief but borrowed belief of the Investigation Wing Kolkata. The proceedings of reopening are invalid in law. ITA No.. 497/Hyd/2019 and CO 16/H/2019 Coastal Projects Pvt. Ltd., Hyd. :- 3 -: 7. The grounds of appeal raised by the A.O do not arise either from the assessment order or from the Appellate Order. Addition has been made u/ s. 68 of the LT. Act. 8. Learned CIT(A) allowed the appeal because the money received from Safeco Projects Pvt Ltd was passed on to Brightmoon constructions Pvt Ltd and Aravali Infra power Ltd and that in any case the assessee admitted profit on the same @ 12.5%. 9. Even otherwise, there is absolutely no evidence to show that assessee is the beneficiary of the entry because the funds were not shown to have been paid in cash to safeco Projects Pvt Ltd or received back in cash from Safeco Projects Pvt Ltd. 10. Statement of Akash Agarwal was not furnished to the assessee on the sole basis of which addition is made u/ s. 68 of the I.T. Act.” 3. Briefly the facts of the case are that the appellant filed his return of income for the AY 2010-11 on 31.0.2011 declaring total income at Rs.1,77,62,71,250/-. In response to notice u/s.153A, the appellant filed return of income on 17.12.2012 declaring total income at Rs.1,85,75,05,030/-. The assessment was completed u/s.143(3) r.w.s.153A on 31.03.2014 by assessing the total income at Rs.1,86,97,32,733/-. An information received from the Investigation wing, Kolkata that it is found that the bank account of the companies got credited by way of RTGS transfer through various intermediaries and the amount got debited by transfer of funds through RTGS/cheque clearing to various firms/related intermediary companies for ITA No.. 497/Hyd/2019 and CO 16/H/2019 Coastal Projects Pvt. Ltd., Hyd. :- 4 -: layering purpose and sometimes directly to ultimate beneficiary. As per the list, M/s. Coastal Projects Pvt. Ltd is one of the beneficiary company and transferred Rs. 7,50,00,000/- into the appellant account during FY 2009-10 through Axis bank. To verify this, the Assessing Officer reopened the case u/s.147 by issuing notice u/s.148 on 31.03.2017. Accordingly, the assessment u/s.143(3) r.w.s. 153A r.w.s. 147 was completed on 10.11.2017 by making addition of Rs. 7,65,30,644/ - and assessed the total income at Rs.1, 94,62,63,377/-. 4. When the assessee preferred an appeal before the CIT(A), the CIT(A) dismissed the ground regarding the validation of section 147 of the Act and directed the AO to delete the addition made of Rs. 7,65,30,644/- made by the AO u/s 69 of the Act as unexplained income. 5. Aggrieved by the order of CIT(A), the revenue is in appeal before the ITAT against the action of the CIT(A) in deleting the addition made u/s 69 of the Act and the assessee filed C.O. against the action of the CIT(A) in confirm the action of the AO in reopening the assessment u/s 147 of the Act. ITA No.. 497/Hyd/2019 and CO 16/H/2019 Coastal Projects Pvt. Ltd., Hyd. :- 5 -: 6. With regard to the reopening of the assessment u/s 147 of the Act, the assessee has filed the written submissions, which are as under: “7.1 The assessment completed u/s 143 (3) r.w.s. 153 A on 31-3-2014 cannot be reopened u/s 147 because section 147 is excluded from its applications to search assessments completed u/s 153A. Section 153 A is a special provision and starts with non-obstante clause with the expression "Not with standing anything contained in section 139, section 147, section 148, section 149, section 151 and section 153 . Therefore, an assessment completed u/s 143 (3) r.w.s. 153 A cannot fall in the ambit of section 147 and 148. A special provision prevails over the general provision. Section 153A specially excludes the operation of section 147 and the assessment cannot be reopened. Thus, the action of the A.O in reopening of the search assessment completed u/s 153 A is not in accordance with the provisions of the Act. The appellant relies on the following decisions for the proposition that that the search assessment completed u/s143(3) r.w.s. 153 A cannot be reopened u/s 147- proviso.( PB- Caselaws-Vol.1- Pages 1 to 58) (i) CIT Quality Care India Ltd. 74 Taxmann.com 45(AP) (ii) Rajbhushan Om Prakash Dixit 416 ITR 89(Bom) (iii) Audhut Timblo and another 420 ITR 62(Bom) (iv) Smt.Mira Ananta Naik -183 Taxmann 40(Bom) PB-l to 58 (Caselaws) (v) Sunill