Dy. Commissioner of Income Tax , Central Circle-3(4), Hyderabad V. Orbit Venture, Hyderabad

ITA 53/Hyd/2020

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 8588 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-B
• Assessment Year: 2010-2011
• Appeal Filed On: 16-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Assessment record; TDS
• Section: 147; 131; 68; 148; 144; 142(1); 143(2); 13; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “B”: HYDERABAD (THROUGH VIRTUAL CONFERENCE) B EFORE SH RI SA TBEER SING H GODA RA, JU DI CIA L MEM BER AND SHR I L AXMI PR AS A D SAHU , AC COUNT ANT MEMBE R ITA No. 1608/H/2019 Assessment Year: 2010-11 Orbit Venture, Hyderabad. PAN – AAEF 08139J Vs. Asst. Commissioner of Income-tax, Ward – 3(1), Hyderabad. (Appellant) (Respondent) ITA No. 53/H/2020 Assessment Year: 2010-11 Dy. Commissioner of Income-tax, Ward – 3(4), Hyderabad. Vs. Orbit Venture, Hyderabad. PAN – AAEF 08139J (Appellant) (Respondent) ITA No. 1609/H/2019 Assessment Year: 2010-11 Ankaa Realtors, Hyderabad. PAN – ABFFA0287M Vs. Asst. Commissioner of Income-tax, Ward – 3(1), Hyderabad. (Appellant) (Respondent) ITA Nos. 1608/Hyd/2019 & 53/H/2020 and others M / s O r b i t V e n t u r e a n d a n o t h e r, H y d . :- 2 -: ITA No. 54/H/2020 Assessment Year: 2010-11 Dy. Commissioner of Income-tax, Ward – 3(4), Hyderabad. Vs. Ankaa Realtors, Hyderabad. PAN – ABFFA0287M (Appellant) (Respondent) Assessee by: Shri P. Murali Mohan Rao Revenue by: Shri Rohit Mujumdar Date of hearing: 05/10/2021 Date of pronouncement: 15/11/2021 O R D E R PER L.P. SAHU, A.M.: These are cross appeals filed by the Assessee as well as revenue are directed against CIT(A) - 11, Hyderabad’s order dated 30/08/2019 for AY 2010-11 involving proceedings u/s 144 r.w.s. 147 of the Income Tax Act, 1961 ; in short “the Act. As the facts and grounds are materially identical in all these appeals, we decided to dispose of these appeals by way of this common order for the sake of convenience. 2. To decide these appeals we refer to the facts from ITA No. 1608/Hyd/2019 in the case of Orbit Venture and hence, ITA Nos. 1608/Hyd/2019 & 53/H/2020 and others M / s O r b i t V e n t u r e a n d a n o t h e r, H y d . :- 3 -: the decision taken in this appeal mutatis-mutandis shall apply to other appeals as well. The grounds of appeal are as under:- “ 1. The order of the Ld. CIT(A) in which the order of the AO is partly upheld, is erroneous in law to the extent it is prejudicial to the interest of the appellant on the validity of the assessment order. 2. The Ld. CIT(A) erred in not holding that the assessment completed u/s 144 r.w.s. 147 of the Act is invalid ab initio since the new incumbent Assessing Officer has not issued a fresh notice u/s 143(2) of the Act after the case has been notified to him vide order is] s 127 of the Act dated 13.09.2017. 3. Without prejudice to above grounds, the Ld. CIT(A) ought to have appreciated that the assessment ujs 1~ r.w.s. 147 of the Act has been completed, there being no new tangible material in the Assessing Officer's possession and thus, the CIT(A) ought to have held the assessment orders invalid. 4. The Ld. CIT(A) ought to have appreciated that the assessee has not been provided with the reasons for issue of notice u/s 148 of the Act even though the assessee has sought for the reasons during the assessment proceedings vide its letter dated 23.12.2017. 5. The Ld. CIT(A) erred in not annulling the assessment even after observing in para no.5.2.4 of his order that the appellant has filed letter seeking reasons recorded, for issue of notice uls 148 of the Act vide its letter dated 23.12.2017. 6. The Ld. CIT(A) ought to have appreciated that the assessment is invalid abinitio since the Assessing Officer has not communicated the reasons for issue of notice u/s s 148 of the Act before completing the assessment. ITA Nos. 1608/Hyd/2019 & 53/H/2020 and others M / s O r b i t V e n t u r e a n d a n o t h e r, H y d . :- 4 -: 7. Without prejudice to other grounds, the Ld. CIT (A) ought to have appreciated the ratio laid down by the Apex Court in the case of G. K. N. Drive Shafts (India) Limited v. ITO [2003] 259 ITR 19 (S.C.) and ought to have annulled the assessment. 8. The Ld. CIT(A) erred in not holding that the AO had erred in not independently forming the belief that income has escaped the assessment and proceeded merely on the information passed on by the DDIT (Investigation) and that therefore, the order of assessment is bad in law. 9. The appellant may add or alter or amend or modify or substitute or delete and/ or rescind all or any of the Grounds of Appeal at any time before or at the time of hearing of the appeal.” 3. Briefly the facts of the case are that the assessee filed its return of income for the Ay 2010-11 belatedly on 24/11/2016 admitting the income of Rs. 6,61,281/-. Subsequently, on the basis of information received from the O/o Dy. Director of Income-tax, Unit – 1(4), Hyderabad, notice u/s 148 of the Act was issued to the assessee on 31/03/2017 with prior approval of the Pr. CIT – 7, Hyd. In response to the said notice, 29/04/2017 the assessee reiterated the income declared earlier on 24/11/2016. Subsequently, the case was converted into scrutiny and accordingly statutory notices were issued to the assessee, against which the AR of the assessee filed the information. Later on the case was transferred to the ACIT, Central Circle-3(1) , Hyderabad vide order U/s 127 of the I.T. Act ITA Nos. 1608/Hyd/2019 & 53/H/2020 and others M / s O r b i t V e n t u r e a n d a n o t h e r, H y d . :- 5 -: passed by the Pr.CIT -7 Hyderabad in proceeding in F. No. Pr. CIT/-7Hyd/Order u/s 127/2017-18 dt. 13.09.2017 and the change of incumbency was informed to the assessee vide letter dated 15.12.2017 3.1 On 21.12.2017 a notice u/s 142(1) along with a show cause notice was issued to the assessee for complying on or before 26.12.2017 . The relevant part is as under:- “............................The assessee’s A.R. Sri Vasant Rao FCA , furnished certain details and after examination details filed. Summon u/s 131 was issued to the Managing Partner. Sri Amit Bansal on 15/12/2017 in order to record statement and to furnish the certain original documents relied upon by the assessee in support of sources for cash deposit made in the Bank account. The Managing Partner neither appeared on the specified date nor furnished information called for so far. Therefore, final show cause letter is hereby issued proposing to complete the assessment as under: On perusal of the bank statement and the information furnished by the assessee, it is seen that the assessee has deposited cash to the tune of Rs. 3,09,94,600/- on different dates starting from 02/12/2009 to 15/04/2010. The assessee’s AR in his letter filed on 13/11/2017 submitted regarding these cash transactions as under: “1. Originally, Sri Amit Bansal had entered into a Land Syndication Agreement dated 05.04.2006 with an investor of Delhi, Mis Sonic Battery India Pvt Ltd., who advanced funds for the Land Syndication activity. 2. Subsequently, Sri Amit Bansal had entered into a Land Syndication Agreement with Mr. Mohd. Afzal and ITA Nos. 1608/Hyd/2019 & 53/H/2020 and others M / s O r b i t V e n t u r e a n d a n o t h e r, H y d . :- 6 -: handed over the funds to him for procuring various Lands. 3. During the years 2008 and 2009, there was a real estate crash and the land Syndication activity could not progress much. As Mr. Mohd. Afzal could not make Much headway in the Land Syndication activity, Sri Amit Bansal cancelled the Land Syndication Agreement entered into with Mr. Mohd. Afzal vide cancellation deed dt. 13.10.2009. 4. Sri Amit Bansal had constituted a Partnership Firm by name Mis Orbit Ventures. With his representatives as Partners, vide Partnership deed dt. 01.04.2009. 5. Meanwhile Mr. Mohd. Afzal, started collecting back the funds given as advances for procuring lands and these funds were being deposited into the bank account of Mis Orbit ventures starting from F. Y. 2009-10. 6. The booklet containing the Lad Syndication Agreements, Partnership Deeds, etc. is enclosed. 7. During, the F. Y. 2009-10, the total funds collected back, out of advances given in earlier years, were Rs. 3,09,94,600/- which was deposited into Bank Account.” 3.2 On perusal of the bank statement furnished by the assessee, the AO noticed that the assessee had deposited cash to the tune of Rs. 3,09,94,600/- on different dates starting from 02/12/2009 to 15/04/02010. The AR in his letter filed on 13/11/2017 submitted the said cash transactions as under: “1, Originally. Sri Amil Bansal had entered into a Land syndication Agreement dated 05,04,2006 with an investor of Delhi. Mis Sonic Battery India Pvt Ltd who advanced funds for the Land Syndication activity. ITA Nos. 1608/Hyd/2019 & 53/H/2020 and others M / s O r b i t V e n t u r e a n d a n o t h e r, H y d . :- 7 -: 2. Subsequently, Sri Amit Bansal had entered into a Land syndication Agreement with Mr Mohd. Afzal and handed over the funds to him for procuring various Lands. 3. During the years 2008 and 2009, there was a real estate crash and the land Syndication activity could not progress much, As Mr. Mohd. Afzal could not make Much headway in the Land syndication activity, Sri Amit Bansal Cancelled the Land syndication Agreement entered into with Mr. Mohd. Afzal vide cancellation deed dt. 13.10.2009. 4. Sri Amit Bansal had constituted a Partnership Finn by name M/s Orbit ventures. With his representatives as partners, vide Partnership deed dt 01,04.2009. 5. Meanwhile Mr. Mohd. Afzal. started collecting back the funds given as advances for procuring lands and these funds were being deposited into the bank account of M/s orbit ventures starting from F.Y. 2009:10. 6. The booklet containing the Land syndication Agreements, partnership Deeds. Etc., is enclosed. 7, During the F.Y. 2009-10, the total funds collected back. out of advances given in earlier years, were Rs. 3,09,94,600/- which was deposited into Bank Account.” 3.3. The AO issued summons u/s 131 to Amil Bansal. Managing Partner on 15.12,2017. which was affixured on 18.12.2017 requiring the assessee to appear on 22. 12,2017 on 11,30am in connection with income Tax proceedings in the case of assessee to give evidence and to produce the following information: ITA Nos. 1608/Hyd/2019 & 53/H/2020 and others M / s O r b i t V e n t u r e a n d a n o t h e r, H y d . :- 8 -: “1) Produce books of account along with all invoices and vouchers 2) Present postal address of Mr. Mohd. Afzal and original agreements with Mr. Mohd. Afzal for vinification along with attested copy of agreements with Mr. Amit Bansal. 3) Produce original agreement along with attested copy of cancellation of land syndication agreement dt. 13.10.2009 for verification. 4) Produce original Land syndication agreements entered between Mr. Amil Bansal with partnership firm M/s Orbit ventures Of. 01.04.2009. 5) Original agreement with Mr. Amit Bansal with investor of Delhi on 05.04.2006. 6) Original Land syndication agreement between Mr. Amil Bansal with Mr. Mohd. Afzal dt. 12.03.2017 along with letters. 7) To record statement on Oath. 8) All the Bank statements.” 3.4 In response the AR of the assessee, the AR of the assessee appeared on 22.12.2017 submitted power of Attorney along with the submissions as under: a) Summons were issued to Sri Amit Bansal dated 15.12.2017. In this connection, it is submitted that Sri Amit Bansal is presently out of station and as such could not appear. ITA Nos. 1608/Hyd/2019 & 53/H/2020 and others M / s O r b i t V e n t u r e a n d a n o t h e r, H y d . :- 9 -: In the Annexure to the above Summons, the following original documents were required to be produced for verification copies of which were already submitted: 1. Land syndication Agreement dated 05 April, 2006 entered into by Sri Amit Bansal with MIs. Sonic Battery India Pvt Ltd., New Delhi; 2. Land syndication Agreement dated 12.03.2007 entered into by Sri Amit Bansal with Mr. Mohd Afzal; 3. Cancellation of Land syndication Agreement dated 13.10.2009 entered into by Sri Amit Bansal with Mr. Mohd. Afzal; 4. Land syndication Agreement dated 20.11.2009 entered into by Sri Amil Bansal and M/s. Ankaa Realtors, a Partnership Firm. b) Certificate issued by Stale Bank of Hyderabad, Tamaka Branch relating to TDS of Rs. 66,1311- made by them on interest Paid of Rs. 6,61,281/-. 3.5 After considering the above submissions and considering the facts of the case and information furnished by the assessee, the AO treated the entire cash deposits of Rs. 3,09,94,600/- made in the bank account as unexplained cash credits for the following reasons:- “a) The onus is on the assessee to prove identity, creditworthiness and genuineness of the credits in his books of account. But the assessee failed to discharge the onus put on him. b) The assessee had built a conceded story to give a color that the cash deposited in his bank account are out of advances made in earlier years for land acquisition. The assessee with the fear that he will be ITA Nos. 1608/Hyd/2019 & 53/H/2020 and others M / s O r b i t V e n t u r e a n d a n o t h e r, H y d . :- 10 -: exposed on examination, choose not to appear before Income Tax Authorities. c) No prudent business person will advance such huge sums for land without even knowing the locality of the land where it is situated.” 4. Aggrieved by the order of the AO, the assessee preferred an appeal before the CIT(A) . It challenged the reopening of the case and submitted details which have been incorporated by the CIT (A) in his order at para No. 5, it also challenged on merits of the case and submitted as under: "7.1 The A. O. made the addition u/s 68 for the assessment year under consideration on the ground 'that the assessee was not able to explain the sources of cash deposits made in the bank account of the appellant firm for the assessment year under consideration. 7.2. We would like to submit that the AO has observed in the assessment order while making the huge addition towards the cash deposit, the relevant para of the assessment order reproduced as under ;- "In response to summon, Sri Amit Bansal did not appear. However, the AR appeared on 22.12.2017 submitted power of attorney along with the submission. The submission is reproduced as follows :- a. Summons were issued to Sri Amit Bansal dated 15.12.2017. In this connection, it is submitted that Sri Amit Bansal is presently out of station and as such could not appear. In the Annexure to the above Summons, the following original documents were required to be produced for verification copies of which were already submitted: ITA Nos. 1608/Hyd/2019 & 53/H/2020 and others M / s O r b i t V e n t u r e a n d a n o t h e r, H y d . :- 11 -: 1.Land Syndication Agreement dated 05 April, 2006 entered into by Sri Amit Bansal with M/s Sonic Battery India Pvt Ltd, New Delhi; 2.Land Syndication Agreement dated 12.03.2007 entered into by Sri Amit Bansal with Mr Mohd Afzal; 3.Cancellation of Land Syndication Agreement dated 13.10.2009 entered into by Sri Amit Bansal with Mr. Mohd. Afzal 4.Land Syndication Agreement dated 20.11.2009 entered into by Sri Amit Bansal and M/s Ankaa Realtors, a Partnership Firm. b)Certificate issued by State Bank of Hyderabad, Tarnaka Branch relating to TDS of Rs. 66,131/- made by them on interest paid of Rs. 6,61,281/-. The above explanation of the assessee pursued and after considering the facts of the case and information furnished by the assessee, the entire cash deposit or Rs. 3,09,94{600/- made in the bank account are treated as unexplained cash credits for the following reasons;- " As can be seen from the above that assessee has submitted all the relevant supporting documents at the time of assessment proceedings and without appreciating the same the AO has made addition in this regard. In connection to this we would like to submit our submission in this regard, which may please be considered in favour of assessee. 7.3. In connection to these as regarding the bank deposits, it is humbly submitted that above deposits were the amounts received back by the firm, advanced by it for procurement of Lands in the earlier years. It will be pertinent here to mention that during the year 2007, Mr. Amit Bansal had entered into a "Land ITA Nos. 1608/Hyd/2019 & 53/H/2020 and others M / s O r b i t V e n t u r e a n d a n o t h e r, H y d . :- 12 -: syndication agreement" with Mr. Mohd. Afzal for procurement of Landsand developing them into Commercial plots etc. vide agreement dated: 12-03- 2007. (Copy of Land syndication Agreement is enclosed vide Paperbook Page no.8-11).During the years 2008 and 2009 there was a huge real estate crash as a result of the Great Recession period, the land syndication activity couldn't progress much. As Mohd. Afzal couldn't make much headway in the land syndication activity; Amit Bansal cancelled the land syndication agreement entered into with Mohd. Afzal vide cancellation deed dated: 13-1-2009. (Copy of cancelation of Land syndication Agreement is enclosed vide Paperbook Page no.12-13). Here in it would be pertinent to mention that a Memorandum of Understanding dated 25.03.2008 was entered between Mr. Amit Bansal and M/s. Orbit Ventures. As per the terms of the agreement it was agreed between the above mentioned(supra) parties that the Land Syndication advances given to Mr. Afzal would be transferred to the appellant and the appellant firm will record the same in its books of account and reflect the same at the year end. As per the agreement, the appellant firm will have all the rights, responsibilities and obligation to deal with in case of modification of Land Syndication agreement, if any. (Copy of Memorandum of Understanding is enclosed vide paper book Page no. 17-19). Thus, as per the terms of agreement, the unexplained amounts as mentioned for every assessment year are nothing but the advances returned back which were given by the appellant firm for Land Syndication Activity and are out of opening balances. 7.4 The Opening Balance of Land Advances for Syndication receivable which was carried forward from the AY 2007-08 was Rs. 9,32,63,200/-. The advances got started returning back to the firm from A.Y. 2010-11 onwards and for subsequent assessment years. The Opening Balance for the AY 2010-11 for the Land Advances Syndication Receivable was Rs. 9,32,63,200/-. ITA Nos. 1608/Hyd/2019 & 53/H/2020 and others M / s O r b i t V e n t u r e a n d a n o t h e r, H y d . :- 13 -: The amount of advance which was returned back to the firm during the A Y 2010-11 was Rs. 3,09,94,600/- which were deposited in the bank account and the closing balance of land advances for syndication receivable was Rs. 6,22,68,600/-. Therefore, in view of the above, we request your good- selves not to make addition in respect of the above bank deposits for the assessment years under consideration. 7.5 Therefore, the above amounts of deposits are nothing but amount given as advance for the purpose of Land acquisition as mentioned earlier on the basis of agreement and due to non crystallization of Land Syndication agreement, the amounts were deposited in the assessee's bank account and M/s. Ankaa Realtors during the relevant assessment year under consideration. Thereafter, as the assessee and M/s. Ankaa Realtors were unable to pay back the same, Mr. Bansal joined as a partner in both the firms for securing the interest of his debts owned by the firm and became the Managing Partner in Mis Orbit Venture and M/s. Ankaa Realtors.(Enclosed vide Paper Book Page No. 19-25). Thus, these deposits found in bank account of appellant is nothing but the amounts received by them as advance and the same is also reflected in the Financials of the appellant and also a ledger copy of Land Advances for Syndication is enclosed for your kind perusal. (Enclosed vide Paper Book Page No. 14-16) • In connection to these we strongly rely on the judgement of Hon'ble Hyderabad ITAT in the case of Lokesh Agarwal Vs ITO in ITA No.1021/H/2013. • In connection to these we strongly rely on the judgement of Hon'ble Chennai ITAT in the case of A CIT Vs N. Sasikala 151 TAXMAN 42 [2006]. 7.6. Without Prejudice to the above, it is further submitted that as the appellant was in the initial years ITA Nos. 1608/Hyd/2019 & 53/H/2020 and others M / s O r b i t V e n t u r e a n d a n o t h e r, H y d . :- 14 -: of it operations of business and no activities were carried out in the firm during the earlier years of formation. There fore, as no business operations were carried out no cash flows could be generated and even if generated it would be in nominal values and don't run in crores. It is also a settled law that no business can generate money which is unexplained at the very early years of its operation. Thus, the action of A. O. in not considering the same is bad and not justified in law. 7.7 Therefore, in view of the above facts and circumstances of the case it is prayed to delete the addition on factual front before your good selves. 5. After considering the submissions of the assessee on merits of the case, the CIT(A) deleted the addition made by the AO by observing as under: “6.2 I have considered the assessment order, submissions of the appellant and the material placed before me. It is seen that the appellant submitted copies of land syndication agreements between Mr. Amit Bansal and M/s. Sonic Battery India P Ltd, dt.05.04.2006 whereby sum of Rs.19Cr is advanced to Mr. Amit Bansal. The AO has not brought anything on record to disprove the above transactions nor the same has been doubted in the order. The appellant also produced copy of land syndication agreement dt.12.03.2007 between Mr. Amit Bansal and Mr. Mohd. Afzal. The same also has not been disputed nor any adverse comment is made by AO on the above. The appellant has produced copy of cancellation deed of above land syndication agreement, dt.13.10.2009 between Mr. Amit Bansal and Mohd. Afzal and the further land syndication agreement between the appellant firm and Mr. Amit Bansal dt.20.11.2009. The source of amounts deposited in the bank account is explained as the amounts received back from Mohd.Afzal/Amit Bansal in terms of cancellation deed. ITA Nos. 1608/Hyd/2019 & 53/H/2020 and others M / s O r b i t V e n t u r e a n d a n o t h e r, H y d . :- 15 -: The initial source of money has not been doubled/disputed nor the AO has brought on record any material as to otherwise utilization or investment made with the above amounts. No evidence as to any land syndication activity carried on is brought on record by the AO. The addition made by the AO is on the basis of suspicion and assumptions and not based on any material evidence. Further, it is seen that Mohd.Afzal who originally was to make land syndication and to whom the money was supposedly paid has expired on 28.01.2016, which is before the date of search of initiation of assessment proceedings by the AO. As the main person is no more and not available for examination, the documentary evidences produced becomes important and relevant which cannot be ignored in the absence of evidence to the contrary. The time lag between the original advances to Mr. Mohd. Afzal and the eventual return to the appellant is less than 3 years. In this regard the decision of Hon'ble ITAT, Mumbai Bench in ITA No.2231/Mum/2013 in the case of Mr. Chirag J Mehta VS ACIT, Hon'ble ITAT Hyderabad Bench in the case of ITO Vs Mr. M. Prabhakar in ITA No.1727/Hyd/2014, Hon'ble ITAT Mumbai in ITA No.277M/2012 in case of Mr. Vikram Deokisan Sarda are relied Upon to conclude that where the source of cash is available and there is no evidence to show that the cash is otherwise utilized, no addition can be made. The time lag of 2-3 years between transaction of advancing and return of the same can not be considered unusual or unreasonable. Having regard to the facts of the case and the legal position brought out above and relied on by the appellant, the addition is not warranted and the same is deleted. The appellant succeeds on the grounds raised above.” 6. Aggrieved by the order of the CIT(A), both the assessee as well as revenue are in appeals before the ITAT. ITA Nos. 1608/Hyd/2019 & 53/H/2020 and others M / s O r b i t V e n t u r e a n d a n o t h e r, H y d . :- 16 -: 7. The assessee in its appeal, has raised 9 grounds of appeal, the sum and substance of which is against the action of CIT(A) in upholding the reopening of assessment u/s 147 of the Act. Before us, the assessee reiterated the submissions made before the CIT (A). The AR of the assessee has filed the paper book containing page no. 1-26 and has also relied on the following judgements: 1. GKN Driveshafts (India) Ltd. Vs. ITO, 125 Taxmann 963 (SC) 2. CIT Vs. Kelvinator of India Ltd., 123 Taxmann 433 (HC – Delhi) 3. N. Surya Prakash Rao Vs. DCIT, ITA No. 300/hyd/2013. 8. The CIT(A) rejected the said issue by observing as under: “5.1 I have considered the assessment order, submissions of the appellant and perused the assessment record. The facts emanating from the record are that the appellant has not filed Return of income within time either u/s.139(1) or 139(4). The return filed by the appellant on 24.11.2016 is not est. The AO has issued notice vi] s 148 of the IT Act, 1961 on 31-03- 2017 after recording the reasons and obtaining approval of the competent Authority. The same was served on 31.03.2017. The acknowledgement for the same is on record. The appellant filed return of income in response to the above on 29.04.2017 showing total income of Rs.6,61,281/-. Notice u/s.143(2) was issued. After change of jurisdiction the ACIT, Central Circle- 3(1), Hyderabad gave opportunity to the appellant vide letter dt.15.12.2017. The AO also issued notice ujs.142(1), dt.21.12.2017 seeking certain documents/ information. Thereafter the assessment was completed u/ s.144 r.w.s 147, dt.28.12.2017. ITA Nos. 1608/Hyd/2019 & 53/H/2020 and others M / s O r b i t V e n t u r e a n d a n o t h e r, H y d . :- 17 -: 5.2.1 The Ground no.2 raised by the appellant is not tenable as there was no valid return filed by the appellant. The return filed on 24.11.2016 is beyond the time limits prescribed, the same is non-est. In view of the above, the contention of the appellant that time was available to AO to issue notice u/s.143(2) instead of notice u/ s.148 is incorrect and is liable to be rejected. Accordingly, the ground raised is rejected. 5.2.2 The ground no.3 raised by the appellant is that when there is change in jurisdiction notice ix] s.143(2) is to be issued and as the same is not issued the proceedings are vitiated. The requirement in law in case of change in jurisdiction or incumbency is that opportunity needs to be given to appellant to appear and explain their case. The same is complied with by the new AO. Sec. 127(4) clearly stipulates that the case can be transferred at any stage and it does not render it necessary to re-issue any notices already issued. In view of the above, there is no merit in contention of the appellant and the same is liable to be rejected. The ground raised is accordingly rejected. 5.2.3 The ground no.4 and 5 raised the issue of availability of tangible material and basis of forming belief by AO. On perusal of material and from the facts of the case, it is seen that the appellant has himself admitted income by way of return filed on 24.11.2016 (non-est return) which has escaped assessment. The information received by AO also constituted valid material basis for forming an opinion by AO as to escapement of income from assessment. The reasons are duly recorded by the AO and approval of competent Authority has been obtained before issue of notice u/s.148. Accordingly, there is no merit in appellant's contentions and the same are liable to be rejected. The grounds raised are rejected. ITA Nos. 1608/Hyd/2019 & 53/H/2020 and others M / s O r b i t V e n t u r e a n d a n o t h e r, H y d . :- 18 -: 5.2.4 The ground no.6 raised the contentions that reasons recorded were not communicated to the appellant and the proceedings are invalid in terms of decision in case of M/s. GKN Drive Shafts(India) Ltd Vs ITD 259 ITR 19(5C). From the record it is seen that the appellant has not sought reasons recorded after filing the return in response to notice is] s.148. The appellant filed return in response to notice u/s 148 on 29.04.2017 in response to notice u/s.148, dt.31.03.2017. The appellant participated in the assessment proceedings thereafter. The AO, thereafter has passed the order on 28.12.2017. The appellant never sought the reasons recorded from the AO and accordingly, cannot accuse AO of not furnishing the reasons recorded. The ratio laid down case law relied on by the appellant is of no help to the appellant as they have not sought reasons recorded from the AO. The ground raised is rejected.” 9. After considering the submissions of both the parties and perusing the material on record as well as the orders of revenue authorities, we are of the view that the CIT(A) has addressed elaborately against the contentions/grievances raised by the assessee quoted supra. The assessee has never sought for the copy of reasons recorded from the assessing officer and return filed belatedly on 24.11.2016 is non-est in the eye of law, therefore, there was an escapement of income. The assessing officer has rightly initiated the proceedings on the basis of information received from the O/o Dy. Director of Income Tax Unit-1(4), Hyderabad. A similar case has been decided by the Co- ordinate bench “A” of ITAT Mumbai in favor of the revenue in the case of Deputy Commissioner of Income Tax, Circle 15(1)(2), Mumbai Vs. Leena Power Tech Engineers (P.) Ltd. ITA Nos. 1608/Hyd/2019 & 53/H/2020 and others M / s O r b i t V e n t u r e a n d a n o t h e r, H y d . :- 19 -: reported in [2021] 130 taxmann.com 341 ( Mumbai- Trib.) in ITA NO. 1313/Mum/ 2020. In this case, certain information received from the investigation wing by the Assessing Officer that the assessee had received monies, in the form of share application money and the case was reopened u/s 147/148 by the Assessing Officer accordingly. Therefore, we do not find any infirmity in the order of the CIT(A) and upholding the same, we dismiss the grounds raised by the assessee on this count. The case law relied upon by the ld. AR of the assessee are not applicable to the case of the assessee. Our decision is supported by the decision relied on by the ld. DR in the case of Home Finders Housing Ltd., [2018] 94 taxmann.com 84 (SC). 10. In the result, appeal of the assessee on legal grounds is dismissed, in above terms. 11. The facts and grounds are similar in ITA No. 1609/Hyd/2019 to that of ITA No. 1608/Hyd/2019, following the decision in ITA No. 1608/Hyd/2019, we dismiss this appeal. 12. In both the appeals of the Revenue in ITA Nos. 53 & 54/Hyd/2020, the revenue has raised 9 grounds of appeal which relate to the action of the CIT(A) in deleting the addition made by the AO u/s 68 of the Act. ITA Nos. 1608/Hyd/2019 & 53/H/2020 and others M / s O r b i t V e n t u r e a n d a n o t h e r, H y d . :- 20 -: 13. The ld. DR besides relying on the order of AO, submitted that the ld. CIT(A) failed to appreciate the fact that the copies of land syndication agreement purportedly entered by Sr. Amit Bansal with M/s sonic Battery India Ltd. are unregistered and stated to be entered in Hyderabad though M/s Sonic Battery India Ltd. is located in Delhi, which is beyond prudent practice of any investor. He further submitted that summons were issued to the Managing Partner Shri Amit Bansal and u/s 131, but, he failed to appear. Had he appeared, the correct facts would have been revealed by him. He also submitted that the CIT(A) failed to appreciate the fact that there is no proof on account to prove that the funds were received through banking channels. 14. The ld. AR, on the other hand relied on the order of CIT(A) and reiterated the submissions made before the CIT(A). He further submitted that the amounts of deposits are nothing but amounts given as advance for the purpose of Land acquisition on the basis of agreement and due to non- crystallization of Land Syndication agreement, the amounts were deposited in the assessee's bank account and M/s. Ankaa Realtors during the relevant assessment year under consideration. He submitted that the amounts were shown as advances in the financial statements of the assessee as on 31/03/2009 and 2010 respectively, which are placed at pages 4 & 5 of the paper book and these ITA Nos. 1608/Hyd/2019 & 53/H/2020 and others M / s O r b i t V e n t u r e a n d a n o t h e r, H y d . :- 21 -: documents were also submitted before the lower authorities. The disputed amounts shown in the financial statements are the opening balances as 01/04/2009 for the impugned AY and the opening balance cannot be added in the impugned AY. Thereafter, as the assessee and M/s. Ankaa Realtors were unable to pay back the same, Mr. Bansal joined as a partner in both the firms for securing the interest of his debts owned by the firm and became the Managing Partner in M/s Orbit Venture and M/s. Ankaa Realtors. Thus, these deposits found in bank account of appellant is nothing but the amounts received by them as advance and the same is also reflected in the Financials of the appellant and also a ledger copy of Land Advances for Syndication is enclosed for your kind perusal. He further submitted that as the appellant was in the initial years of its operations of business and no activities were carried out in the firm during the earlier years of formation. Therefore, as no business operations were carried out, no cash flows could be generated and even if generated it would be in nominal values and don't run in crores. It is also a settled law that no business can generate money which is unexplained at the very early years of its operation. Thus, the action of A. O. in not considering the same is bad and not justified in law and the CIT(A) considering the facts on record, deleted the addition made by the AO, which may be upheld. He relied on the following judgements. ITA Nos. 1608/Hyd/2019 & 53/H/2020 and others M / s O r b i t V e n t u r e a n d a n o t h e r, H y d . :- 22 -: 1. Lokesh Agarwal, Hyd. Vs. ITO, ITA No. 1021/Hyd/2013. 2. CIT Vs. Usha Stud Agricultural Farms Ltd. [2009] 183 Taxmann 277 (Delhi) 3. ACIT Vs. Smt. N. Sasikala, [2006] 151 Taxmann 42 4. ACIT Vs. Chirag Jayant Mehta , ITA No. 8548/Mum/2011 5. ITO Vs. Shri M. Prabhakar, IT No. 1727/Hyd/2014 6. Shri Vikram Deokisan Sarda Vs. ACIT, ITA No. 277/Mum/2012. 15. We have considered the rival submissions and perused the material on record as well as gone through the orders of revenue authorities. We have also perused the paper book filed by the assessee consisting of pages 1 to 26, in which, copies of financial statements, land syndication agreement with Mr. Amit Bansal and Mr. Mohd. Afzal, ledger extracts of land advances for syndication account in the books of assessee, copy of memorandum of understanding between Amit Bansal and assessee and copy of partnership deed between Amit Bansal and Orbit Venture. 15.1 The categorical findings of the CIT(A) before deleting the addition are that the addition made by the AO is based on suspicion and assumptions and not based on any material evidence. We observe from the show cause notice issued by the AO in which the AO asked the assessee for the source of cash deposit made in the Bank account, to which the AR of the assessee appeared before the AO on 22/12/2017 and submitted the documents, which have not ITA Nos. 1608/Hyd/2019 & 53/H/2020 and others M / s O r b i t V e n t u r e a n d a n o t h e r, H y d . :- 23 -: been disputed by the AO, as quoted supra, which established that the cash received is genuine. Further, we also observe that at page No. 4 of the paper book, which is a balance sheet as on 31/03/2009 in which the assessee has shown as “land advances for syndication”, which cannot be added in this AY. It clearly shows that the amount was received by the assessee before 01/04/2009 and still it was appearing in the balance sheet for the year ended 31/03/2010. Further, it is seen that Mohd. Afzal who originally was to make land syndication and to whom the money was supposedly paid has expired on 28.01.2016, which is before the date of initiation of assessment proceedings by the AO. As the main person is no more and not available for examination, the documentary evidences produced becomes important and relevant which cannot be ignored in the absence of evidence to the contrary. 15.2 We find that the decision of the CIT(A) is in consonance with the decisions of the ITAT Mumbai and Hyderabad Benches. On totality of the facts and circumstances of the case, we do not find any infirmity in the order of CIT(A) in deleting the addition made u/s 68 of the Act and upholding the same, we dismiss the grounds raised by the revenue on this count. 16. In the result, both the appeals in ITA Nos. 53 & 54/Hyd/2020 of the revenue are dismissed. ITA Nos. 1608/Hyd/2019 & 53/H/2020 and others M / s O r b i t V e n t u r e a n d a n o t h e r, H y d . :- 24 -: 17. To sum up, appeals of the assessee in ITA Nos. 1608 & 1609/Hyd/2019 as well as the appeals of the revenue in ITA Nos. 53 & 54/Hyd/2020 are dismissed in above terms. A copy of this common be placed in the respective case files. Pronounced in the open court on 15 th November, 2021. Sd/- Sd/- (S.S. GODARA) (L. P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, Dated: 15 th November, 2021. kv Copy to : 1 2. M/s Orbit Venture, M/s Ankaa Realtors, C/o P. Murali & Co., CAs, 6-3-655/2/3, 1 st Floor, Somajiguda, Hyderabad – 82 2 ACIT, Central Circle – 3(1), Hyderabad. 3 DCIT, Central Circle – 3(4), Hyderabad. 3 CIT(A) -11, Hyderabad 4. Pr. CIT (Central), Hyderabad. 4 ITAT, DR, Hyderabad. 5 Guard File. ITA Nos. 1608/Hyd/2019 & 53/H/2020 and others M / s O r b i t V e n t u r e a n d a n o t h e r, H y d . :- 25 -: S.No. Details Date 1 Draft dictated on 2 Draft placed before author 3 Draft proposed & placed before the Second Member 4 Draft discussed/approved by Second Member 5 Approved Draft comes to the Sr. PS/PS 6 Kept for pronouncement 7 File sent to Bench Clerk 8 Date on which the file goes to Head Clerk 9 Date on which file goes to A.R. 10 Date of Dispatch of order