I Parvatha Vardhini, Hyd, Hyderabad V. ITO, Ward-15(3), Hyderabad, Hyderabad

ITA 590/HYD/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4399 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 24-08-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 08-05-2015
• Court: TRIBUNAL
• Department Lawyers: J SIRI KUMAR
• Assessee Lawyers: V RAGHAVENDRA RAO
• Keywords: Reopening of assessment; Capital asset; Cost of acquisition; Difference of opinion; Assessment record
• Section: 143(3); 147; 263; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 590/HYD/2015 ASSESSMENT YEAR: 2006-07 I. PARVATHA VARDHINI, SECUNDERABAD [PAN: AADPI6966N] VS THE INCOME TAX OFFICER, WARD-15(3), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI V. RAGHAVENDRA RAO, AR FOR REVENUE : SHRI J. SIRI KUMAR, CIT-DR DATE OF HEARING : 24-08-2016 DATE OF PRONOUNCEMENT : 31-08-2016 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF TH E PRINCIPAL COMMISSIONER OF INCOME TAX-7, HYDERABAD, DATED 23-02-2015 INVOKING THE PROVISIONS OF SECTION 263 OF THE INCOME TAX ACT [ACT] TO SET ASIDE THE ORDER OF THE ASSESSING O FFICER (AO). 2. IN THE COURSE OF PRESENT APPEAL, ASSESSEE HAS RAI SED ADDITIONAL GROUNDS OF APPEAL STATING THAT THE PROCEEDING S INITIATED I.T.A. NO. 590/HYD/2015 I. PARVATHA VARDHINI :- 2 -: U/S. 147 WHICH RESULTED IN AN ORDER U/S. 143(3) R.W .S. 147 DT. 21-01-2013 BEING ITSELF BAD IN LAW, CIT COULD NOT IN VOKE THE PROVISIONS OF SECTION 263. ASSESSEE HAS RAISED FIVE ADDITIONAL GROUNDS OF APPEAL ON THE ABOVE ISSUE AND ON PRODUCTI ON OF NECESSARY EVIDENCE FOR REOPENING OF ASSESSMENT AND APPROVAL AS PER THE AUTHORITIES BY THE DR, THE LD. COUNSEL WITHDREW THE GROUNDS. THEREFORE, THE ADDITIONAL GROUNDS SO RAISED ARE CONSIDERED AS WITHDRAWN . 3. THE REGULAR GROUNDS OF APPEAL ARE WITH REFERENC E TO PROCEEDINGS U/S. 263 AND ALL THE EIGHT GROUNDS PERTAIN TO THE SAME ISSUE. 4. BRIEFLY STATED, ASSESSEE, AN INDIVIDUAL HAD FILED HER RETURN OF INCOME ADMITTING AN INCOME OF RS. 40,640/- B ESIDES THE AGRICULTURAL INCOME OF RS. 95,000/-. PROCEEDINGS U /S. 147 WERE INITIATED, HAVING COME TO KNOW BY THE AO, THAT ASSESSEE H AD ENTERED INTO A DEVELOPMENT CUM GENERAL POWER OF ATTORN EY IN FAVOUR OF M/S. VERTEX HOMES PVT. LTD., ON 09-01-2006. IN ORDER TO BRING THE CAPITAL GAINS TO TAX, PROCEEDINGS U/S. 147 WE RE INITIATED AND IN THE COURSE OF SCRUTINY ASSESSMENT, THE AO EXAMI NED VARIOUS ISSUES AND DETERMINED THE SHORT TERM CAPITAL G AINS AT RS. 13,98,205/- AND LONG TERM CAPITAL GAINS AT RS. 53,75, 567/-. IN ARRIVING AT THE CAPITAL GAINS, AO HAS COMPUTED THE SAME AS UNDER: I.T.A. NO. 590/HYD/2015 I. PARVATHA VARDHINI :- 3 -: 3.2.1 COMPUTATION OF SHORT TERM CAPITAL GAINS FROM THE TR ANSFER OF LANDED PROPERTY ADMEASURING AC 1.39 GTS LOCATED IN SURVEY 77/B, HYDERNAGAR VILLAGE, BALANAGAR MANDAL. (A) COST OF ACQUISITION AS ON 09.01.2006: SALE CONSIDERATION RS. 50,000 ADD: STAMP DUTY & OTHER CHARGES 20,440 ----------------- TOTAL COST RS. 70,440 ----------------- ASSESSEES SHARE OF INVESTMENT 1/6X70,440= 11,74 0 ADD: COST OF IMPROVEMENT WORKED OUT AS PER THE ANNEXURE ENCLOSED (RS. 50,68,132 X 1593/7764 = 10,39,868) 10,39,86 8 ------------------- TOTAL COST OF ACQUISITION AS ON THE DATE OF TRANSFE R 10,51,608 =========== AS THE ASSESSEE HAS TRANSFERRED ONLY 57% OF THE LA NDED PROPERTY, THUS THE COST OF ACQUISITION OF THE SAME WORKS OUT TO RS. 5,99,417/-. (B) SALE CONSIDERATION: ASSESSEE SHARE OF LAND IN AC 1.39 GTS WHICH WORKS OUT TO 1593 SQ. YDS AND AS THE ASSESSEE TRANSFERRED ONLY 57% OF THE ABOVE STATED LAND FOR DEVELOPMENT PURPOSE, THE SALE CONSIDERATION OF THE SAME IS WORKED OUT AS UNDER BY ADOPTING THE MARKET VALUE AS ON THE DATE O F TRANSFER I.E. RS. 2,200/-. SALE CONSIDERATION (57% OF 1593 X RS. 2,200) = RS. 19,97,622/- THUS, THE SHORT TERM CAPITAL GAINS WORKS OUT TO RS. 13,98,205/- 3.2.2. COMPUTATION OF LONG TERM CAPITAL GAINS FROM THE TRANSFER OF LANDED PROPERTY ADMEASURING AC 1.11 GTS LOCATED IN SURVEY 77/B, HYDERNAGAR VILLAGE, BALANAGAR MANDAL. (A) COST OF ACQUISITION AS ON 15.02.2006 SALE CONSIDERATION RS. 32,000 ADD: STAMP DUTY & OTHER CHARGES 8,531 ----------------- TOTAL COST RS. 40,531 ----------------- INDEXED COST OF ACQUISITION (RS. 40,531 X 497/172) RS. 1,17,116 I.T.A. NO. 590/HYD/2015 I. PARVATHA VARDHINI :- 4 -: ADD: COST OF IMPROVEMENT WORKED OUT AS PER THE ANNEXURE ENCLOSED (RS. 50,68,132 X 6171 X 7764) 40,28,264 --------------------- 41,45,380 --------------------- PROPORTIONATE COST OF 57% OF TRANSFERRED LAND RS. 2 3,62,867 (B) SALE CONSIDERATION AS THE ASSESSEE TRANSFERRED ONLY 57% OF THE AC 1.11 GTS OF LAND FOR DEVELOPMENT PURPOSE, THE SALE CONSIDERATION OF THE SAME IS WORKED OUT AS UNDER BY ADOPTING THE MARKET VALUE AS ON THE DATE O F TRANSFER I.E. RS. 2,200/- SALE CONSIDERATION (57% OF 6171 X RS. 2,200) RS. 77 ,38,434 THUS, THE LONG TERM CAPITAL GAINS WORKS OUT TO RS. 53,75,567/- 4.1. ON EXAMINING THE RECORD, THE CIT WAS OF THE OPIN ION THAT THE COST OF IMPROVEMENTS CLAIMED BY ASSESSEE SHOUL D NOT HAVE BEEN ALLOWED WITHOUT VERIFICATION AND HAS ISSUED A SHO W CAUSE NOTICE AS UNDER( AS EXTRACTED IN THE ORDER AT PARA 4) : (1) ON PERUSAL OF ASSESSMENT RECORD, IT IS NOTICED THAT WHILE COMPUTING THE CAPITAL GAINS AN EXPENDITURE OF RS. 1 0 LAKHS; RS. 11.20 LAKHS; AND RS. 29.47 LAKHS WAS ALLOWED AS A D EDUCTIONS TOWARDS IMPROVEMENT AS THE SAME ARE NOT ALLOWABLE E XPENDITURE. IN VIEW OF THIS, SHORT COMPUTATION OF SHORT TERM CA PITAL GAINS AND AS WELL AS LONG TERM CAPITAL GAINS. THE SAME WAS E SCAPED ONE. 5. IT WAS SUBMITTED BY ASSESSEE, IN THE COURSE OF PROCEEDINGS BEFORE CIT, THAT THESE AMOUNTS WERE EXPLAI NED TO THE AO IN THE COURSE OF ASSESSMENT PROCEEDINGS AND THESE ARE CONSIDERED AS COST OF IMPROVEMENT WHILE CALCULATING THE CAPITAL GAINS. IT WAS FURTHER SUBMITTED THAT THE AMOUNTS ARE AS UNDER: I.T.A. NO. 590/HYD/2015 I. PARVATHA VARDHINI :- 5 -: EXPENSES DETAILS OF I P VARDHINI FY. 2006-07 - JOINT NAME ASSESS. SHARE OF EXP. TOTAL COST OF EXP. A) CANCELLATION OF DEV. AGREEMENT WITH DPR DIVYA SAI CONSTRUCTIONS AGR. DATED 28-5-2003 (20-10) (2003-04) 10,00,000 20,00,000 B) LAND VACATION EXPENSES PAID TO VVS MURTHY ON 17-01-2006 (2005-06) 82,974 3,00,000 C) LAND VACATION EXPENSES PAID TO VV SUBBA RAMA SASTRY (2005-06) 5,53,161 20,00,000 D) LAND VACATION EXPENSES PAID TO MV RAMA RAJU (2005-06) MV RAMA RAJU (2006-07) 3,22,677 1,61,343 11,66,667 5,83,350 E) AMOUNT PAID TO K KRISHNA AND K GNANESHWAR FOR LAND COMPRISE ON 04- 01-2006 (2005-06) 29,47,977 1,00,00,000 TOTAL 50,68,133 1,60,50,017 6. LD. CIT, HOWEVER, DID NOT AGREE AND BY OBSERVING AS UNDER, SET ASIDE THE ASSESSMENT ORDER WITH THE DIRECTIO N TO RE-DO THE ASSESSMENT AS PER THE OBSERVATIONS STATED. HIS ORDER IN PARA 6 IS AS UNDER: 6. I HAVE CAREFULLY CONSIDERED THE FACTS RULING IN THIS CASE AND THE SUBMISSIONS MADE BY THE ASSESSEE. AS PER T HE ASSESSMENT RECORD THE ASSESSEE EXECUTED A DEVELOPMENT AGREEMEN T ALONG WITH 5 OTHER INDIVIDUALS ON 09.01.2006 IN FVOUR OF M/S. VERTEX HOMES PVT LTD IN RESPECT OF PROPERTY AT HYDERNAGAR VILLAGE. THE ASSESSEE ALSO EXECUTED ANOTHER DEVELOPMENT AGREEMENT WITH M/S. VE RTEX HOMES PVT LTD ON 15.02.2006 IN RESPECT OF ANOTHER PROPERT Y AT HYDERNAGAR VILLAGE. WHILE CALCULATING THE SHORT TERM CAPITAL GAINS AND LONG TERM CAPITAL GAINS, THE AO ALLOWED COST OF IMPROVEM ENTS OF RS. 10,39,868/- AND RS. 40,28,264/- RESPECTIVELY. 'COST OF IMPROVEMENTS' INCLUDES I) CANCELLATION OF DEVELOPME NT AGREEMENT WITH GPR DIVYA SAI CONSTRUCTIONS DATED 28.05.2003 R S. 10,00,000/- II) EXPENSES PAID TO LOOK AFTER THE PRO PERTY RS. I.T.A. NO. 590/HYD/2015 I. PARVATHA VARDHINI :- 6 -: 11,20,155/- III) AMOUNT PAID TO K. KRISHNA & K GNAN ESWAR FOR LAND COMPROMISE ON 04.01.2006 RS, 29,47,977/- . 6.1 AS PER THE PROVISIONS OF SECTION 55(1)(B)(2)(II ) OF THE I.T.ACT, COST OF IMPROVEMENTS MEANS ALL EXPENDITURE OF A CAP ITAL NATURE INCURRED IN MAKING ANY ADDITIONS OR ALTERNATIONS TO THE CAPITAL ASSET ITSELF BY THE ASSESSEE. BUT IMPROVING THE OWNER'S T ITLE TO THE ASSET IS DIFFERENT FROM IMPROVING THE ASSET ITSELF. THEREFOR E, THE AMOUNT PAID AS AND BY WAY OF SETTLEMENT OF A CLAIM TO THE PERSO N WHO DISPUTED THE TITLE OF THE ASSESSEE CANNOT BE SAID TO BE AN E XPENDITURE BY WAY OF ANY IMPROVEMENT TO THE ASSET AS SUCH. IN THE PRE SENT, CASE, THE ASSESSE ALONG WITH THE CO-OWNERS ENTERED MEMORANC.U M OF COMPROMISE ON 04.01.2006 WITH K KRISHNA AND K GNANE SWAR (WHO FILE SUIT IN THE COURT) AND PAID RS. 29,47,977/-. R EGARDING LAND VACATION EXPENSES, THE ASSESSEE PAID RS 11,20,155/- TO THE DWELLERS TO LOOK AFTER THE PROPERTY AND THE DWELLER S THEMSELVES VACATED THE PREMISES BUT NOT DUE TO OWNER'S PRESSUR E. THE EXPENSES OF RS. 10,00,000/- INCURRED TOWARDS CANCELLATION OF DEED IS A CAPITAL LOSS AND NOT AN IMPROVEMENT TO THE ASSET. HENCE, TH E EXPENSES CLAIMED BY THE ASSESSEE UNDER 'COST OF IMPROVEMENTS ' NEEDS TO BE EXAMINED IN ITS ALLOWABILITY UNDER THE LAW. WITHOUT APPRECIATING THE NATURE OF EXPENSES CLAIMED, THE AO PROCEEDED TO ALL OW THE SAME FROM CAPITAL GAINS. 7. REFERRING TO THE SUBMISSIONS MADE BEFORE THE AO, SUBMISSIONS MADE BEFORE THE CIT AND THE ORDER OF THE C IT, IT WAS SUBMISSION THAT ASSESSEE HAS CLAIMED CORRECTLY THE PROP ORTIONATE AMOUNT OUT OF THE SUMS SPENT FOR : A. CANCELLATION OF THE EARLIER AGREEMENT; B. VACATION OF TENANTS; AND C. COMPROMISE AMOUNTS PAID TO VARIOUS PEOPLE WHICH WAS EVIDENCED BY RESPECTIVE RECEIPTS/AGREEMENTS OF SALE/CANCELLATION OF DEEDS WHICH WERE ALL FURNISHED TO THE AO; 7.1. IT WAS THE SUBMISSION THAT LD. CIT WRONGLY CONS IDERED THAT AO HAS NOT ENQUIRED, WHEN AO HAS ENQUIRED AND ALL OWED THE I.T.A. NO. 590/HYD/2015 I. PARVATHA VARDHINI :- 7 -: PROPORTIONATE AMOUNT WHILE DETERMINING THE COMPUTATION OF INCOME. LD. COUNSEL RELIED ON THE FOLLOWING CASE LA W TO SUBMIT THAT ALL THE AMOUNTS ARE TO BE CONSIDERED AS COST OF IMPROVEMENT AND THE OBSERVATIONS OF CIT ARE NOT CORRECT. I. CIT VS. MISS PIROJA C. PATEL [242 ITR 582] (BOM); II. CIT VS. SHAKUNTALA KANTILAL [190 ITR 56] (BOM); III. HARDIALLIA CHEMICALS LTD., VS. CIT [218 ITR 598] (BO M); IV. CIT, TAMIL NADU-II VS. A. VENKATARAMAN AND OTHERS [13 7 ITR 846] (MAD); V. K.P. VARGHESE VS. ITO [131 ITR 597] (SC); VI. CIT VS. SHAKUNTALA KANTILAL [190 ITR 56] (BOM); VII. CIT, DELHI VIII VS. SHAKUNTALA RAJESHWAR [160 ITR 84 0] (DEL); VIII. MISS DHUN DADABHOY KAPADIA VS. CIT, BOMBAY [63 ITR 651] (SC); 8. LD. DR RELIED ON THE ORDER OF THE CIT. 9. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUS ED THE ORDER OF THE AO AND CIT. THERE IS NO DOUBT THAT AS SESSEE HAS CLAIMED THE EXPENDITURE AS PART OF COST OF IMPROVEMENT AND THE PROPORTIONATE EXPENDITURE WAS EXAMINED BY THE AO AND ALLOWED. THEREFORE, THE OBSERVATION OF THE CIT THAT AO HAS NOT VE RIFIED ALL THE DETAILS CANNOT BE SUSTAINED. MOREOVER, WE ARE UNAB LE TO UNDERSTAND THE VIEW OF CIT THAT THE EXPENDITURES ARE NO T ALLOWABLE UNDER THE PROVISIONS OF SECTION 55(1)(B)(2) OF THE ACT . AS FAR AS CANCELLATION OF DEVELOPMENT AGREEMENT WITH M/S. GPR DIV YA SAI CONSTRUCTIONS IS CONCERNED, LD. CITS OBSERVATION THAT IT IS A I.T.A. NO. 590/HYD/2015 I. PARVATHA VARDHINI :- 8 -: CAPITAL LOSS AND CANNOT BE ALLOWED IS SURPRISING. IF IT IS A CAPITAL LOSS, THEN WHILE COMPUTING THE CAPITAL GAINS, SUCH LOS S IS CERTAINLY ALLOWABLE AND SO, NO PREJUDICE IS CAUSED TO THE REVEN UE. AS SUBMITTED BEFORE THE AUTHORITIES, ASSESSEE HAD ENTERED I NTO AN EARLIER AGREEMENT AND BY VIRTUE OF AGREEMENT DT. 28-05 -2013, THE DEVELOPMENT AGREEMENT WITH EARLIER BUILDER WAS CANCELL ED, FOR WHICH THERE WAS A COST, WHICH WAS PROPORTIONATELY AP PORTIONED TO ASSESSEE AS PER THE TABLE EXTRACTED ABOVE. THIS EXPEN DITURE WAS PART OF THE TRANSACTION FOR NEW DEVELOPMENT AND CERTAINLY TAKES THE NATURE OF IMPROVEMENT TO THE ASSET. LIKEWISE, LAND VAC ATION EXPENSES PAID TO SRI V.V.S. MURTHY, V.V. SUBBA RAMA SASTRY AND SRI M. V. RAMA RAJU ARE ALSO SIMILARLY ALLOWABLE, A S VARIOUS COURTS HAVE ALREADY HELD THAT THE AMOUNT IS PART OF COST OF I MPROVEMENT. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. MISS PIROJA C. PATEL [242 ITR 582] (BOM) HAS CONSIDERED THAT EXPENDITURE INCURRED FOR REMOVING HUTMENT DWELLERS WAS COST OF IMP ROVEMENT U/S. 48. IT WAS HELD THAT BY EVICTION OF HUTMENT DWELLE RS, THE VALUE OF THE LAND INCREASES. THEREFORE, THE EXPENDITURE INC URRED FOR VACATING THE LANDS CERTAINLY AMOUNTED TO COST OF IMPROVE MENT. ACCORDINGLY, THE EXPENDITURE INCURRED ON PAYMENT OF CO MPENSATION WAS AN ALLOWABLE DEDUCTION. BY THE TIME THE AO COMPLET ED THE ASSESSMENT, THIS JUDGMENT OF HON'BLE CIT VS. MISS PIRO JA C. PATEL [242 ITR 582] (BOM) (SUPRA) WAS AVAILABLE WHEREIN TH E HON'BLE BOMBAY HIGH COURT HAS FOLLOWED EARLIER TWO DECISIONS IN THE CASE OF CIT VS. SHAKUNTALA KANTILAL [190 ITR 56] (BOM) AN D HARDIALLIA CHEMICALS LTD., VS. CIT [218 ITR 598] (BOM). LIKE-W ISE, THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT, TAMIL N ADU-II VS. A. VENKATARAMAN AND OTHERS [137 ITR 846] (MAD] HAS CONSIDERED THE PAYMENT MADE TO TENANTS TO OBTAIN VACANT POSSESSION, A S AN I.T.A. NO. 590/HYD/2015 I. PARVATHA VARDHINI :- 9 -: EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN CONNE CTION WITH THE AGREEMENT OF SALE AS IT PRECEDED THE TRANSFER AND IN F ULFILLMENT OF A CONDITION OF SALE. THEREFORE, THE AMOUNT PAID WAS D EDUCTIBLE AS AN EXPENDITURE U/S. 48(I). THE HON'BLE MADRAS HIGH COU RT FOLLOWED THE PRINCIPLES LAID DOWN BY THE HON'BLE SUPREME COUR T IN THE CASE OF K.P. VARGHESE VS. ITO [131 ITR 597] (SC). THUS, THE EXPENDITURE INCURRED FOR REMOVAL OF ENCROACHMENT/LESSEES ARE TO B E ALLOWED AS A DEDUCTION, WHICH THE LD.AO HAS ALLOWED AFTER DUE EX AMINATION. THEREFORE, THE OPINION OF THE CIT ON THIS ISSUE CANNO T BE SUSTAINED. 9.1. COMING TO THE ISSUE OF COMPENSATION PAID TO K. KRISHNA AND K. GNANESWAR , THERE WAS A MEMORANDUM OF COMPRO MISE DT. 04-01-2006 WHEREIN, BOTH THE PARTIES ARE CLAIMING ABSO LUTE OWNERSHIP OF THE IMPUGNED LANDS AND PERPETUAL INJUNCTI ON IN O.S. NO. 68/198 ON THE FILE OF PR. SENIOR CIVIL JUDGE, R R DISTRICT WAS OBTAINED AGAINST THOSE PARTIES. THERE WAS A COMPROMISE TO SETTLE THE DISPUTE AMICABLY AND AS A PART OF THAT RS. 1 CRORE W AS PAID BY WAY OF CHEQUES, AS DETAILED IN THE MEMORANDUM OF COMP ROMISE. THEREFORE, THE EXPENDITURE INCURRED TO IMPROVE THE TITLE OF THE PROPERTY SHOULD ALSO BE ALLOWED AS A DEDUCTION IN CO MPUTATION OF CAPITAL GAINS, AS HELD BY THE HON'BLE BOMBAY HIGH COU RT IN THE CASE OF CIT VS. ABRAR ALVI [247 ITR 312] (BOM). IN VIEW OF THIS, SINCE LD. AOS ORDER IS ACCORDING TO THE PROVISIONS OF THE ACT, AS WELL AS PRINCIPLES LAID DOWN IN VARIOUS CASES ON SI MILAR NATURE OF EXPENDITURE, WE ARE OF THE OPINION THAT THERE IS NO ERRO R IN THE ORDER PASSED BY THE AO. IN VIEW OF THAT, WE HAVE NO HESITATION IN CANCELLING THE PROCEEDINGS U/S. 263 BY THE LD. CIT A S WE FIND THAT THE ORDER OF THE AO IS NOT ERRONEOUS. MOREOVER, THE CO MPLETE DETAILS HAVE BEEN FILED AND AO AFTER DUE EXAMINATION H AS ALLOWED I.T.A. NO. 590/HYD/2015 I. PARVATHA VARDHINI :- 10 -: THE AMOUNTS PROPORTIONATE TO ASSESSEES CLAIM, AS CAN BE SEEN FROM THE DETAILED ORDER PASSED AND THE COMPUTATION OF CAPITAL GAINS AS EXTRACTED IN THE FIRST PART OF THE ORDER HEREIN ABOVE. THEREFORE, ANY OTHER OPINION BY THE LD. CIT HAS TO BE CONSIDERED AS A DIFFERENCE OF OPINION, WHICH CAN NOT BE SUBSTITUTED IN PROCEEDINGS U/S 263 . IN VIEW OF THAT, WE SET ASIDE THE ORDER OF THE CIT U/S. 263 . ORDER OF AO IS THEREFORE RESTORED. 10. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST AUGUST, 2016 SD/- SD/- (P. MADHAVI DEVI) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT ME MBER HYDERABAD, DATED 31 ST AUGUST, 2016 TNMM I.T.A. NO. 590/HYD/2015 I. PARVATHA VARDHINI :- 11 -: COPY TO : 1. I. PARVATHA VARDHINI, SECUNDERABAD. C/O. P.R. D ATLA & CO., CHARTERED ACCOUNTANTS, 6-3-788/A/9, FIRST FLOO R, DURGA NAGAR, AMEER PET, HYDERABAD. 2. THE INCOME TAX OFFICER, WARD-15(3), HYDERABAD. 3. PR.CIT-7, HYDERABAD. 4. D.R. ITAT, HYDERABAD. 5. GUARD FILE.