Appeal details
Counselvise Citation
[2019] 112 COUNSELVISE.COM (IT) 1866 (ITAT-HYDERABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
4 year(s) 6 month(s) 24 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
06-12-2019
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
DB-A
Next Hearing Date
17-10-2019
Assessment Year
2005-2006
Appeal Filed On
12-05-2015
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A ', HYDERABAD BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER I TA NO S . 62 3 /HYD/2015 A SSESSMENT Y EAR : 20 0 5 - 0 6 ELEM INVESTMENTS PVT. LTD., HYDERABAD. PAN A AACE4370L VS. ASST, COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE 8 , HYDERABAD. APPELLANT RESPONDENT I TA NO . 62 8 /HYD/2015 A SSESSMENT Y EAR : 200 5 - 06 FINCITY INVESTMENTS PVT. LTD., HYDERABAD. PAN AAAF3011D VS. ASST, COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE 8, HYDERABAD. APPELLANT RESPONDENT I TA NO . 633/HYD/2015 A SSESSMENT Y EAR : 2005 - 06 HIGHGRACE INVESTMENTS PVT. LTD., HYDERABAD. PAN AAA CH 5018G VS. ASST, COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE 8, HYDERABAD. APPELLANT RESPONDENT ASSESSEE BY: S H RI K.C. DEVDAS REVENUE BY: S HRI R.S. ARVINDAKSHAN DATE OF HEARING: 1 6 / 1 0 / 201 9 DATE OF PRONOUNCEMENT: 06 / 1 2 /201 9 O R D E R PER V. DURGA RAO, J.M.: ALL THESE APPEALS FILED BY DIFFERENT ASSESSEES ARE DIRECTED AGAINST THE ORDERS OF CIT(A) 12, HYDERABAD FOR THE I.T.A. NO. 6 23 /H/15 AND OTHERS ELEM INVESTMENTS PVT. LTD. AND OTHERS. 2 AY 2005 - 06. AS IDENTICAL ISSUES ARE INVOLVED IN THESE APPEALS THE SAME WERE CLUBBED AND HEARD TOGETHER AND THEREFORE, A COMMON ORDER IS PASSED FOR THE SAKE OF CONVENIENCE. ITA NO. 623/HYD/2015 IN THE CASE OF ELEM INVESTMENTS PVT. LTD. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE COMPANY CARRYING ON TRADING IN THE SHARES FILED ITS RETURN OF INCOME FOR THE AY 2005 - 06 ON 30/10/2005 DECLARING TOTAL INCOME OF RS. 78,24,760/ - . THE AO AFTER FOLLOWING THE DUE PROCEDURE, COMPLETED THE ASSESSMENT U/ S 143(3) OF THE IT ACT 26/11/2007. 2.1 THE ELABORATE REASONS OF THE AO TO REOPEN THE ASSESSMENT U/S 147 ARE AS UNDER: 2.1 THE ASSESSEE COMPANY M/S ELEM INVESTMENTS PVT. LTD., IS A COMPANY INCORPORATED BY THE FAMILY MEMBERS OF THE PROMOTERS OF M / S SAT YAM COMPUTER SERVICES LIMITED. THE CHAIRMAN OF M / S SATYAM COMPUTER SERVICES LTD SRI B. RAMALINGA RAJU HAD SUO - MOTO MADE A CONFE SSIONAL STATEMENT ON 7TH JANUARY, 2009, IN HIS LETTER SENT TO THE BOARD OF DIRECTORS (WITH A COPY MARKE D T O SEB) THAT THE BOOKS OF ACCOUNTS OF SCSL HAVE BEEN FUDGED FOR THE LAST SEVERAL YEARS TO MANIPULATE THE BOOK RESULTS. HE FURTHER CONFESSED THAT THE RE VENUES AND PROFITS WERE MANIPULATED BY FALSIFICATION OF ACCOUNTS FOR THE LAST SEVERAL YEARS. THE RELEVANT EXTRACT OF THE CONFESSIONAL MAIL ISSUED BY SRI B. RAMALINGA RAJU IS REPRODUCED BELOW: IT IS WITH DEEP REGRET, AND TREMENDOUS BURDEN THAT I AM CARR YING ON MY CONSCIENCE, THAT I WOULD LIKE TO BRING THE FOLLOWING FACTS TO YOUR NOTICE: 1. THE BALANCE SHEET CARRIES AS OF SEPTEMBER 3 0 , 2008 A) INFLATED (NON - EXISTENT) CASH AND BANK BALANCE OF RS 5,040 CRORE (AS AGAINST RS 5361 CRORE REFLECTED IN THE BO OKS) I.T.A. NO. 6 23 /H/15 AND OTHERS ELEM INVESTMENTS PVT. LTD. AND OTHERS. 3 B) AN ACCRUED INTEREST OF RS 376 CRORE WHICH IS NON - EXISTENT C) AN UNDERSTATED LIABILITY OF RS 1,230 CRORE ON ACCOUNT OF FUNDS ARRANGED BY ME D) AN OVER STATED DEBTOR POSITION OF RS 490 CRORE (AS AGAINST RS 2651 REFLECTED IN THE BOOKS) 2. FOR THE SEPTEMBER QUARTER (Q2) WE REPORTED A REVENUE OF RS 2,700 CRORE AND AN OPERATING MARGIN OF RS 649 CRORE (24 PER CENT OF REVENUES) AS AGAINST THE ACTUAL REVENUES OF RS 2,112 CRORE AND AN ACTUAL OPERATING MARGIN OF RS 61 CRORE (3 PER CENT OF REVENUE). THI S HAS RESULTED IN ARTIFICIAL CASH AND BANK BALANCES GOING UP BY RS 588 CRORE IN Q2 ALONE. THE GAP IN THE BALANCE SHEET HAS ARISEN PURELY ON ACCOUNT OF INFLATED PROFITS OVER A PERIOD OF LAST SEVERAL YEARS (LIMITED ONLY TO SAT YAM STANDALONE, BOOKS OF SUBS IDIARIES REFLECTING TRUE PERFORMANCE). WHAT STARTED AS A MARGINAL GAP BETWEEN ACTUAL OPERATING PROFIT AND THE ONE REFLECTED IN THE BOOKS OF ACCOUNTS CONTINUED TO GROW OVER THE YEARS. IT HAS ATTAINED UNMANAGEABLE PROPORTIONS AS THE SIZE OF THE COMPANY OPERA TIONS GREW SIGNIFICANTLY (ANNUALIZED REVENUE RUN RATE OF RS 11,276 CRORE IN THE SEPTEMBER QUARTER, 2008 AND OFFICIAL RESERVES OF RS 8.392 CRORE). THE DIFFERENTIAL IN THE REAL PROFITS AND THE ONE REFLECTED IN THE BOOKS WAS FURTHER ACCENTUATED BY THE FACT TH AT THE COMPANY HAD TO CARRY ADDITIONAL RESOURCES AND ASSETS TO JUSTIFY HIGHER LEVEL OF OPERATIONS - THEREBY SIGNIFICANTLY INCREASING THE COSTS.' 2.2 IN FACT, THERE IS A PRELUDE TO THE CONFESSION OF THE THEN CHAIRMAN OF MIS SCSL . ON DECEMBER 18,2008, SHRI KRISHNA PALEPU, AN INDEPENDENT DIRECTOR ON THE BOARD OF SCSL, RECEIVED AN E - MAIL FROM ONE SHRI JOSE ABRAHAM CLAIMING TO BE AN EX - EMPLOYEE OF SCSL IN HI S E - MAIL SHRI JOSE ABRAHAM ALLEGED THAT HE FOUND THAT RAJUS WERE PADDING THE GAP BETWEEN THE ACTUAL NUMBERS AND QUARTERLY RESULTS WITH FAKE BILLINGS TO THE COMPANIES SET UP BY THEM IN BVI, DUBAI AND ROUTING THE MONEY THROUGH HAWALA THERE AND GETTING THE SAME PAID THROUGH BOGUS COMPANIES. THE MONEY CAME FROM THE EXCESS PAYMENTS MADE TO THE 'CAMPUS BUILDING' COMPANIES. HE FURTHER INFORMED SHRL PALEPU TO CHECK THE DEPOSITS WITH THE BANKS DIRECTLY AS THE CASH AND CASH EQUIVALENT IS NOT I.T.A. NO. 6 23 /H/15 AND OTHERS ELEM INVESTMENTS PVT. LTD. AND OTHERS. 4 THERE. SHRI KRISHNA PA L EUP IN TURN FORWARDED THE MESSAGED RECEIVED FROM SHRI LOSE ABRAHAM TO SHRI M. RAMMOHAN RAO, THE CHAIRMAN OF THE AUDIT COMMITTEE OF SCSL SHRI M. RAMMOHAN RAO FORWARDED THE EMAIL TO SHRI T.R. PRASAD AND DR. V.S. RAJU SAYING THAT HE HAD FORWARDED THE SAME E - MAIL TO S HRI B. RAMALINGA RAJU REQUESTING HIM TO GIVE HIS RESPONSE TO THE AUDIT COMMITTEE AT ITS NEXT MEETING WHICH WAS TO BE HELD ON 29'' DECEMBER, 2008. HE ALSO TOLD THE AUDIT COMMITTEE THAT HE WOULD MAKE A PRESENTATION ON THIS ISSUE IN THE NEXT BOARD MEETING TO BE HELD ON DECEMBER 29, 2008 WHICH DID NOT TAKE PLACE. SHRI KRISHNA G. PALEPU EVEN AFTER RESIGNING HAD FOLLOWED UP THE ISSUE WITH THE AUDITOR AND HAD ASKED THE REMAINING DIRECTORS TO PURSUE THE ISSUE TO BRING IT TO A LOGICAL C ON CL USION. KNOWING THE SERIOUSNESS OF THE CASE AND CHANCES OF GETTING CAUGHT, IF THE BANK BALANCES WERE VERIFIED BY AN INDEPENDENT INVESTMENT BANKER, SNR! B. RAMALINGA RAJU THROUGH HIS CFO, SHRI V. SRINIVAS ASKED SHRI G. RAMAKRISHNA, THE FINANCE HEAD, TO ASCERTAIN THE AMOUN T OF FALSIFICATION. AND THEN FOLLOWED THE CONFESSIONAL MAIL OF THE THEN CHAIRMAN OF M/ S SCSL ON 7' OF JANUARY, 2009. 2.3 IT IS TO BE NOTED HERE THAT THE ABOVE CONFESSIONAL STATEMENT BY THE THEN CHAIRMAN OF M/ S SCSL , WAS NOT IN A WAY SUO - MOTO BUT HE WAS C OMPELLED TO DO SO, AS A CONSEQUENCE OF REVELATION OF SOME UGLY FACTS ABOUT THE FALSIFIED BOOKS OF ACCOUNTS, TO OTHER MEMBERS OF THE SAT YAM BOARD. IT IS THEREFORE DEAR THAT NEITHER THE COMPANY NOR THE THEN CHAIRMAN OR THE THEN MANAGING DIRECTOR OF THE COMP ANY, HAD EVER D I SCL OSED HITHERTO, THE MATERIAL FACTS RELATED TO FALSIFICATION AND MANIPULATION OF THE FINANCIAL STATEMENTS AND ACCOUNTS OF M/ S. SCSL FOR THE SUBJECT ASSESSMENT YEARS. 2.4 ACCORDINGLY , A SWORN STATEMENT OF SRI B. RAMALINGA RAJU WHICH WAS RECORDED BY THE ASSESSING OFFICER UNDER SEC.131 OF THE I. T. ACT, 1961 ON 21 - 02 - 2009, IN THE CENTRAL PRISON, C HANCHA L GUDA, HYDERABAD, HE HAS CONFIRMED AND REITERATED THE FACTS AND FIGURES THAT WERE MENTI ONED IN HIS MAIL/LETTER DATED 07 - 0 1 - 2009, WHICH WAS ADDRESSED TO THE BOARD OF DIRECTORS OF M/S SCSL. IT IS PERTINENT TO MENTION HERE THAT THE CHAIRMAN OF M / S SCSL SHRI B. RAMALINGA RAJU AND HIS BROTHER SRI B. RAMA RAJU, WERE FULLY CONVERSANT WITH THE ACTIVITIES AND FUNCTIONS OF SCSL AND OTHER INVESTMENT COMPANIES, ONE OF THEM BEING MIS ELEM INVESTMENTS PVT LTD. I.T.A. NO. 6 23 /H/15 AND OTHERS ELEM INVESTMENTS PVT. LTD. AND OTHERS. 5 2.5 THESE INVESTMENT COMPANIES WERE USED TO OFFLOAD THE SHARES OF M / S SCSL ON BEHALF OF THE FAMILY MEMBERS. THE FUNDS SO GENERATED WERE IN TU RN ROUTED THROUGH THESE FRONT COMPANIES OR AS ADVANCES TO SOME OTHER INTER - RELATED CONCERNS. THE ASSESSEE COMPANY IS ONE SUCH INVESTMENT COMPANY. IT IS FURTHER OBSERVED THAT MONIES HAVE ORI GINATED FROM THE FILMILY MEMBERS BY WAY OF SALE OF SHARES BY THIS COMPANY AND HAVE BEEN TRANSFERRED IN A CIRCUITOUS AND COMPLEX MANNER THROUGH THE FRONT COMPANIES WITH AN INTENTION TO PREVENT THE REVENUE AND THE REGULATOR{ AGENCIES TO TRACE THE ANTECEDENTS AND TO MASK THE ACTUAL SOURCES OF MONEY AND THE CONSEQUENT GENERATION OF INCOME FROM THESE TRANSACTIONS. THE PROCEEDS HAVE THUS FOUND ITS WAY INTO INVESTMENTS AND IN CREATION OF ASSETS IN THE SHAPE OF LARGE TRACTS OF LAND. 2.6 THERE IS FURTHER INFORMATI ON THAT SOME OF THE FUNDS ADVANCED TO M /S SCSL HAVE NOT BEEN RECORDED IN THE BOOKS OF SCSL AT THE BEHEST OF SHRI B. RA MALINGA RAJU THAT CE R TAIN TRANSACTIONS ENTERED IN THE BOOKS OF SCSL ARE NOT RECORDED IN THE ACCOUNTS OF THE GROUP COMPANIES . THE BOOKS OF SUCH INVESTMENT COMPANIES AND THEIR FINANCIAL STATEMENTS DO NOT REFLECT THE TRUE AND FAIR STATEMENT OF AFF AIRS OF THESE COMPANIES. 2.6 THE ASSESSMENT IN THIS CASE WAS COMPLETED UNDER SECTION 143(3) OF THE I .T. ACT AND A) THE REVELATIONS IN THE CONFESSI ONAL STATEMENT OF SRI RAMALINGA RAJ U , THE FACTS OF FUDGING OF ACCOUNTS; B) THE REAL AND EFFECTIVE CONTROL OVER THE INVESTMENT & FRONT COMPANIES OF SRI RAMALINGA RAJU AND HIS FAMILY MEMBERS; C) THAT THERE WERE VARIATIONS IN THE QUANTUM OF INCOME AND A A SSETS /LIAB LIITIES OF SCSL AND THE INVESTMENT AND FRONT COMPANIES AS REVEALED IN THE CONFESSIONAL STATEMENTS ETC. WHICH CAME TO LIGHT IN THE INVESTIGATIONS; WERE A L L NOT KNOWN TO THE ASSESSING OFFICER AT THE TIME OF MAKING THE ORIGINAL ASSESSMENTS U/S 143 (3). THE FRAUDULENT TRANSACTIONS REVEALED BY SRI RAMALINGA RAJU, APPARENTLY WILL HAVE A BEARING ON THE FINANCIAL AFFAIRS OF THE GROUP COMPANIES AND THEIR CONSEQUENT INCOME AND ASSETS POSITION IN VIEW OF THE COMPLEX AND CIRCUITOUS NATURE OF TRANSACTIONS BET WEEN THE GROUP ENTITIES. I.T.A. NO. 6 23 /H/15 AND OTHERS ELEM INVESTMENTS PVT. LTD. AND OTHERS. 6 2. 2. IN VIEW OF THE ABOVE BACKGROUND, THE AO OBSERVED THAT THE ASSESSMENT IS REOPENED UNDER SECTION 147 WITH THE APPROVAL OF THE CIT (CENTRAL) , HYDERABAD AND NOTICE UNDER SECTION 148 WAS ISSUED ON 02.04.2009. VIDE THIS OFFICE LETTER DATED 21.07.2010 A DETAILED QUESTIONNAIRE CALLING FOR CERTAIN INFORMATION WAS ISSUED. IN RESPONSE TO THE SAID NOTICES U/SEC.143(2) OF THE I .T. ACT, 1961, THE ASSESSE E'S AUTHORIZED REPRESENTATIVE SRI B. VIJAYAPRASAD, FCA ATTENDED ON 23.09.2010 AND THE CASE WAS DISCUSSED AND THE A.R. OF THE ASSESSEE - COMPANY WAS ASKED TO FURNISH CERTAIN INFORMATION AS PER THE ORDER SHEET NOTINGS MENTIONED THEREIN. 2. 3 THE CORRECT PIC TURE OF THE COMPANY CAME TO THE LIGHT OF THE AO ONLY AFTER THE STATEMENT GIVEN BY SHRI B. RAMALINGA RAJU ON 07/01/2009 AND ALSO ANOTHER STATEMENT RECORDED U/S 131 OF THE ACT ON 21/02/09. THESE ASPECTS WERE NOT CONSIDERED BY THE AO U/S 143(3) OF THE ACT. TH EREFORE, WHEN IT CAME TO THE NOTICE OF THE AO THAT THE ASSESSEE COMPANY WAS USED BY SCSL AS FRONT COMPANY THAT THERE ARE MANIPULATION IN THE BOOKS OF ACCOUNT, THE AO WAS OF THE OPINION THAT THERE IS AN ESCAPEMENT OF THE INCOME AND ISSUED NOTICE U/S 148 OF THE ACT ON 2/08/2010 AND ASSESSMENT WAS COMPLETED ACCORDINGLY U/S 143(3) RWS 147 OF THE ACT ON 04/08/2011 DETERMINING THE TAXABLE INCOME OF THE ASSESSEE AT RS. 33,28,90,875/ - BY MAKING THE FOLLOWING ADDITIONS: 1. UNEXPLAINED ADVANCES RS. 20,00,00,000 2. DEEMED DIVIDEND U/S 2(22(E) RS. 12,41,03,588 3. DISALLOWANCE U/S 14A RS. 42,92,125 4. AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). I.T.A. NO. 6 23 /H/15 AND OTHERS ELEM INVESTMENTS PVT. LTD. AND OTHERS. 7 5. THE CIT(A ) UPHELD THE ACTION OF THE AO IN REOPENING THE ASSESSMENT U/S 147 OF THE ACT BY OBSERVING AS UNDER: 1 . THE STATEMENT DATED 07/01/2009 OF THE CHAIRMAN/PROMOTER OF THE ICONIC COMPANY OF ANDHRA PRADESH, M/S SAT YAM COMPUTERS HAD CREATED TURMOIL IN ALL CIRCLES A ND OPENED A PANDORA BOX. IN THIS STATEMENT, APART FROM THE DOINGS IN THE CO, M/S SAT YAM COMPUTERS LTD, HE HAD ALSO MENTIONED ABOUT 33 SPECIFIC COMPANIES THAT HAD GIVEN AMOUNTS TO M/S SAT YAM COMPUTERS LTD. A SEPARATE STATEMENT WAS ALSO RECORDED ON 21/2/20 09 IN THE JAIL FROM HIM, WHEREIN THE STATEMENT DT 7/1/09 WAS CONFIRMED BY HIM APART FROM THE OTHER MISDOINGS LIKE 'FUDGING' OF BOOKS OF ACCOUNTS. CONSEQUENTLY, ALL THE COMPANIES AND ENTITIES WITH WHOM HE WAS ASSOCIATED HAD A QUESTION MARK OVER THEIR TRANSA CTIONS. WHETHER THE AO HAD EXPLICITLY MENTIONED THIS ASPECT OR NOT, THIS COMING OF ALL THE RELATED COMPANIES UNDER THE CLOUD, IS A FACT THAT CANNOT BE BRUSHED UNDER THE CARPET AND THE LEGALITY OF REOPENING CANNOT BE EXAMINED IN I SOL A T I ON OF THIS VITAL BACK GROUND. FURTHER, AS SEEN FROM THE ADDITION OF AN AMOUNT OF RS.20 CRORES NARRATED AT PARA 2.2.3, IT IS A FACT THAT THE BOOKS OF THE APPELLANT AS WELL AS M/S SCSL DID NOT DISCLOSE THIS TRANSACTION. 5.2 AT THE STAGE OF ISSU E OF NOTICE U/S 147, AS PER LAW, A LL THAT WAS REQUIRED WAS A BONAFIDE BELIEF OR A REASON TO BELIEVE ABOUT ESCAPEMENT OF INCOME. THIS BELIEF AND ITS BONAFIDE WERE CERTAINLY THERE IN THE BACKGROUND. THUS, THE ISSUE OF NOTICE IS THEREFORE UPHELD. 5.1 AS REGARDS THE ADDITION OF RS. 12.59 CRORES ON ACCOUNT OF DEEMED DIVIDEND U/S 2(22)(E), THE CIT(A) DELETED THE SAME. 5.2 AS REGARDS REMAINING ADDITIONS ON ACCOUNT OF UNEXPLAINED LOANS AND ADVANCES OF RS. 20 CRORES AND WITH REGARD TO SEPARATION OF INTER EST INCOME, HE OBSERVED AS UNDER: 8.1.1 THE BACK GROUND AND THE REASONS FOR MAKING THE ADDITION WERE NARRATED BRIEFLY IN PARA 2.2.3. TO RECAPITULATE THE FORENSIC AUDIT IN THE CASE OF SATYAM COMPUTERS HAS COME ACROSS CREDITS OF FOUR HIGH VALUE CHEQUES TO TALLING RS.20 CRORES IN THE CITY BANK ACCOUNT. THE AMOUNT OF RS.20 CRORES HAD COME FROM THREE RELATED I.T.A. NO. 6 23 /H/15 AND OTHERS ELEM INVESTMENTS PVT. LTD. AND OTHERS. 8 COMPANIES NAMELY - ELEM INVESTMENTS, FINCITY INVESTMENTS AND THE ASSESSEE APPELLANT MIS HIGH GRACE INVESTMENTS. HOWEVER, THE FORENSIC REPORT DID NOT GIVE T HE BREAKUP OF THE RECEIPT OF 20 CRORES SO THAT WE DO NOT REALLY KNOW HOW MUCH WAS ACTUALLY GIVEN BY ELEM/FINCITY/HIGH GRACE. THERE WAS ALSO NO ATTEMPT ALSO TO TRACE FROM THE AVAILABLE CHEQUE NO. AND TRANSACTION DETAILS MENTIONED IN THE ASST. ORDER ITSELF S O AS TO ARRIVE AT THIS BREAK UP. THE FORENSIC REPORT FURTHER STATED THAT THE AMOUNT OF RS.20 CRORES WAS ALSO SUBSEQUENTLY REPAID BY WAY OF 11 CHEQUES. AGAIN IT IS SILENT ON WHO ACTUALLY RECEIVED THESE 11 CHEQUES AND WHETHER THE APPELLANT ITSELF GOT BACK TH E AMOUNT IT LENT OR WHETHER THE MONEY WAS GIVEN TO SOME OTHER RELATED CONCERNS/PEOPLE. 8.1.2 THE SOURCES FOR PAYMENT OF THIS AMOUNT IS WHAT THE A O SHOULD HAVE SEEN. NEITHER THE A O NOR THE APPELLANT COULD QUANTIFY THE EXACT AMOUNT AND SOURCES THEREOF. TH E ADDITION WAS MADE BECAUSE NO DETAILS WERE FURNISHED AND IT IS THE SUBMISSION OF THE APPELLANT THAT THE DETAILS COULD NOT BE FURNISHED BECAUSE THE RECORDS WERE NOT AVAILABLE AT THAT POINT OF TIME. 8.1.3 IN VIEW OF THIS IMPASSE AND ALSO THE FACT THAT TH E A O M ADE AN ADDITION OF RS.60 CRORES (TOTA L AMOUNT OF ADDITION IN THE ASSESSMENTS OF THE THREE COMPANIES) AS AGAINST A TOTAL ADVANCE OF RS.20 CRORES, THE FOLLOWING FINDINGS AND DIRECTIONS ARE GIVEN: 8.1.4 IN VIEW OF THE FORENSIC REPORT, BASICALLY THE A O HAD TO SEE WHETHER THE COMPANY HAD SOURCES TO LEND A PORTION OF THIS RS,20 CRORES. SINCE THERE WERE FOUR CHEQUES OF RS.7.5 CRORES, 5 CRORES, 4.75 CRORES AND 2.75 CRORES AND THREE PARTIES WHICH GAVE THESE CHEQUES, AT MOST ONE COMPANY COULD HAVE GIVEN TWO C HEQUES AND EVEN IF THESE CHEQUES WERE THE HIGHEST TWO VALUE CHEQUES NAMELY RS.7.5 CRORES AND RS.5 CRORES, THE APPELLANT COMPANY COULD HAVE GIVEN RS.12.5 CRORES AT MOST AND NOT BEYOND THAT. THUS, AT MOST WE WOULD HAVE AN AMOUNT OF RS.12.5 CRORES AS AN ADVAN CE GIVEN BY COMPANY A, RSA.75 CRORES AS AN ADVANCE GIVEN BY COMPANY BAND RS.2.75 CRORES GIVEN BY COMPANY C. NOW WHETHER IT IS THE APPELLANT, MIS FINCITY INVESTMENTS WHICH IS COMPANY A OR B OR C IS NOT CERTAIN. 8.1.5 THE A O IS THEREFORE DIRECTED TO CALL F OR THE BANK ACCOUNT COPY OF THE APPELLANT AS WELL AS THE OTHER T WO COMPANIES AND WITH REFERENCE TO THE CITY BANK ACCOUNT OF MIS SCSL, ESTABLISH AS TO H OW MUCH HAS COME FROM I.T.A. NO. 6 23 /H/15 AND OTHERS ELEM INVESTMENTS PVT. LTD. AND OTHERS. 9 APPELLANT COMPANY AND OTHER TWO COMPANIES SPECIFICALLY . THE APPELLANT IS ALSO GIVEN A TIME UP TO 15TH APRIL, 2015, TO GATHER THE DETAILS AND ESTABLISH CLEARLY THE AMOUNT ACTUALLY ADVANCED BY IT. IT IS FURTHER DIRECTED THAT IF NO DETAILS ARE FILED AND IF IT IS STILL NOT POSSIBLE TO ASCERTAIN THE ACTUAL BREAK UP OF THIS AMOUNT OF RS.20 CRO RES, THEN THE A O IS DIRECTED TO ASSESS RS.12.5 CRORES AS AGAINST RS.20 CRORES IN THE HANDS OF M/ S HIGH GRACE INVESTMENTS PVT LTD AND AN AMOUNT OF RS 4 .75 CRORES IN THE HANDS OF M / S ELEM INVESTMENTS AND RS.2.75 CRORES IN THE HANDS OF FINCITY INVESTMENTS . 9.0 FINDINGS REGARDING SEPARATION OF INTEREST INCOME AND ASSESSING IT AS INCOME FROM OTHER SOURCES AND TREATING THE INCOME FROM TRADING IN SHARES AS SPECULATION INCOME. 9.1 PRIMA - FACIE, FROM THE ASST. ORDER, IT APPEARS THAT THE AO IS TREATING THE ACTIVIT Y OF TRADING IN SHARES AS SPECULATIVE TRANSACTION. THIS IS INCORRECT AS BY THIS DEFINITION OF THE AO, THERE CANNOT BE ANY TRADING IN SHARES BY ANY ASSESSEE OTHER THAN DOING SPECULATIVE TRANSACTIONS. THE AO REFERRED TO SECTION 73 AND EXPLANATION TO SECTION 28 IN ISOLATION. SECTION 43(5) DEFINES SPECULATION. IT IS BASICALLY A CONTRACT SETTLED OTHERWISE BY ACTUAL DELIVERY OR TRANSFER OF THE COMMODITY OR SCRIPS. IN FACT, EVEN THIS DEFINITION HAS BEEN LIBERALIZED W.E. F . AY 2006 - 07 TO PROVIDE FOR HEDGING, JOBBING OR ARBITRAGE TRANSACTIONS AND THE TRADING IN DERIVATIVES IF CARRIED IN A RECOGNIZED STOCK EXCHANGE. IT IS THE LOSS FROM SUCH SPECULATIVE TRANSACTION WHICH IS NOT ALLOWED TO BE SET OFF U/S 73. IN FACT, IF THERE IS NO LOSS ARISING FROM SUCH TRANSACTIONS, IT REALLY DOES NOT MATTER WHETHER YOU TREAT IT AS INCOME FROM SPECULATION OR INCOME FROM NORMAL TRADING IN SHARES. THE AO SHOULD FIRST ANALYSE AND COLLATE TRANSACTIONS WHICH CAN BE CALLED AS SPECULATIVE BEFORE DOING ANY ALTERATION IN THE COMPUTATION MADE BY THE APPELLANT. 1 DO NOT FIND ANY SUCH FINDING IN THE ASST. ORDER AS TO WHAT TRANSACTIONS THE AO HAD IDENTIFIED AS SPECULATIVE TRANSACTIONS WHICH WERE SETTLED WITHOUT ACTUAL DELIVERY OF SHARE SCRIPS. IN THE RELEVANT ASST. YEAR 1 FIND THAT THE AO COMPUTED BUSINESS INCOME ON SPECULATION ON A PROFIT OF RS.6,89,795/ - AND HAD ALSO SET OFF THE BROUGHT FORWARD SPECULATION LOSSES OF EARLIER YEARS TOTALLING RS.51 , 30,914/ - THUS, BY ACTUALLY HOLDING THESE AS BUSINESS INCOME ON S P EC UL ATION, THE AO ENDED UP SETTING OFF OF BROUGHT I.T.A. NO. 6 23 /H/15 AND OTHERS ELEM INVESTMENTS PVT. LTD. AND OTHERS. 10 FORWARD SPECULATION LOSSES AND MAKING THE CURRENT BUSINESS INCOME OF RS.51.30 LAKHS ASSESSED BY HIM AS NIL. THIS IS SO BECAUSE IF HE HAD TREATED THE CURRENT YEAR INCOME AS NORMAL BUSINESS INCOME THE EARLIER AS SESSED LOSSES FROM SPECULATION BUSINESS BROUGHT FORWARD FROM AY 2003 - 04 AND 2004 - 05 WOULD HAVE CONTINUED TO BE CARRIED FORWARD TO NEXT YEAR TO BE SET OFF AGAINST INCOME FROM SPECULATION BUSINESS ONLY. IN ABSENCE OF ANY SUCH FINDING OF SPECIFIC SPECULATIV E TRANSACTIONS, THE COMPUTATION SO MADE IS INCORRECT SINCE THE APPELLANT CO. WAS CONSISTENTLY STATING THAT IT IS AN INVESTMENT COMPANY AND THE LOSSES AROSE IN NORMAL COURSE AND THAT THE APPELLANT COMPANY'S BUSINESS INCLUDES PURCHASE AND SALE OF SHARES AS S UBMITTED BY IT BEFORE THE AO AND BEFORE ME AND AS CAN BE VERIFIED FROM THE MEMORANDUM AND ARTICLES OF ASSOCIATION. 9.2 FURTHER, AS SEEN FROM THE ARTICLES OF ASSOCIATION AND MQU, THE APPELLANT IS AN INVESTMENT COMPANY AND THE FIRST OBJECTIVE OF THE COMPAN Y IN THE MOA READS AS UNDER: ' TO CARRY ON THE BUSINESS OF PORTFOLIO INVESTMENTS IN ALL KINDS OF SECURITIES INCLUDING SHARES, STOCKS, DEBENTURES, DEPOSITS, UNITS, GOVERNMENT SECURITIES INCLUDING PROMISSORY NOTES, LOANS, BONDS, NATIONAL SAVINGS SCHEMES AN D CARRY ON THE BUSINESS AS UNDERWRITERS AND BROKERS OF STOCKS, SHARES AND OTHER SECURITIES AND TO PROVIDE INVESTMENT AND MERCHANT BANKING SERVICES INCLUDING MANAGING THE ISSUE OF CAPITAL OR RAISING OF RESOURCES PROVIDING REGISTER OR TRANSFER AGENCY SERVICE S AND DARA PROCESSING FACILITIES AND SUPPORTING AND RELATED SERVICES AND UNDERTAKING AND EXECUTING ANY CONTRACT INVOLVING COMPUTER BASED INFORMATION SYSTEM, FEASIBILITY STUDY, SOFTWARE DEVELOPMENT, SYSTEMS AND PROGRAMMING, DATA ANALYSIS AND RESEARCH AND D EVELOPMENT AND PROVIDING COUNSELLING, ADVISORY OR CONSULTANCY SERVICES. ' THUS, EARNING OF INTEREST INCOME IS PART OF ITS BUSINESS INCOME AND SUCH INCOME CANNOT BE SEPARATELY TREATED AS INCOME FROM OTHER SOURCES. THE AO IS THEREFORE DIRECTED TO COMPUTE T HE INCOME ACCORDINGLY, SUBJECT TO QUANTIFICATION OF ACTUAL ADVANCE GIVEN TO MIS SCSL OUTSIDE THE BOOKS WHILE GIVING EFFECT TO THIS APPEAL ORDER. I.T.A. NO. 6 23 /H/15 AND OTHERS ELEM INVESTMENTS PVT. LTD. AND OTHERS. 11 6. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APP EAL: GROUNDS OF APPEAL 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 12, HYDERABAD [CIT(A)] IN SUSTAINING THE ASSESSMENT MADE U/S.143 R.W.147 OF THE IT ACT, 1961 IS UNSUSTAINABLE BOTH ON FACTS AND IN LAW. (I) THE LEARNED CIT(A) FAILED TO N OTE THAT THE OPINION FORMED BY THE INCOME TAX OFFICER AND THE RECORDING OF REASONS BEFORE THE ISSUE OF NOTICE U/S.148 HAD ABSOLUTELY NO NEXUS WITH THE ISSUE OF THE REOPENING OF THE ASSESSMENT AND FRAMING OF THE ASSESSMENT AND THEREFORE THE ISSUE OF NOTICE U/S.148 AND THE ASSESSMENT MADE THEREON IS INVALID, WITHOUT JURISDICTION, UNSUSTAINABLE AND NEEDS TO BE QUASHED. (II) THE LEARNED CIT(A), ERRED IN HOLDING THAT THE ASSESSING OFFICER HAD VALID REASONS TO REOPEN THE ASSESSMENT OF THE APPELLANT COMPANY TO E XAMINE THE VERACITIES AND FINANCIAL IMPLICATION BETWEEN THE APPELLANT COMPANY AND M/S. SAT Y AM COMPUTERS SERVICES LTD. (III) THE LEARNED CIT(A), FAILED TO NOTE THAT AN ASSESSMENT MADE U/S.143(3) CANNOT BE REOPENED U/S.148 BEYOND A PERIOD OF FOUR YEARS AS THERE IS NO FAILURE ON THE PART OF THE APPELLANT TO DISCLOSE FULLY AND TRULY ALL THE MATERIAL FACTS RELEVANT FOR THE ASS ESSMENT MADE ORIGINALLY AND THEREFORE OUGHT TO HAVE QUASHED THE REASSESSMENT PROCEEDINGS. (IV) THE LEARNED CIT(A), FAILED TO NOTE THAT THE ASSESSING OFFICER HAD NO TANGIBLE MATERIAL TO COME TO THE CONCLUSION THAT THERE WAS ESCAPEMENT OF INCOME FROM THE O RIGINAL ASSESSMENT AND THEREFORE THE ISSUE OF NOTICE U/S.148 AND THE ASSESSMENT MADE THEREON IS INVALID, WITHOUT JURISDICTION AND THEREFORE MUST BE QUASHED. 3. THE LEARNED CIT(A), HAVING FAILED TO NOTE THAT THERE WAS NO APPLICATION OF MIND BY THE ASSESSI NG OFFICER TO THE REASONS RECORDED, OUGHT TO HAVE NOTICED FROM THE RECORDS THAT THE ENTIRE REOPENING OF THE ASSESSMENT WAS UNDER THE DIRECTION OF SUPERIOR OFFICERS AND THEREFORE THE ENTIRE ASSESSMENT SUFFERS FROM LEGAL INFIRMITY AND IS TOTALLY CONTRARY TO THE STATUTORY PROVISIONS AND HENCE MUST BE QUASHED. I.T.A. NO. 6 23 /H/15 AND OTHERS ELEM INVESTMENTS PVT. LTD. AND OTHERS. 12 4. THE LEARNED CIT(A), FAILED TO NOTE THAT THE ASSESSING OFFICER WAS FULLY AWARE OF THE EXISTENCE OF THE COMPANIES WHICH WERE NOT FICTITIOUS AND NEITHER THEIR EXISTENCE NOR THEIR IDENTITY WAS UNDER DISP UTE AND THEREFORE ON THE MERE STATEMENT OF SRI B.RAMALINGA RAJU, EX.CHAIRMAN OF M/S.SCSL, CANNOT BE THE BASIS TO REOPEN WITHOUT THERE BEING ANY MATERIAL OR ANY INFORMATION HAVING A DIRECT LINK TO THE APPELLANT COMPANY AND THEREFORE THE ISSUE OF NOTICE U/S. 148 AND THE ASSESSMENT MADE THEREON IS INVALID, WITHOUT JURISDICTION AND THEREFORE MUST BE QUASHED. 5. THE LEARNED CIT(A) FAILED TO NOTE THAT THERE WAS NO RATIONAL AND INTELLIGIBLE NEXUS BETWEEN THE REASONS AND THE BELIEF AND THE INESCAPABLE CONCLUSION I S THAT THE ITO DID NOT HAVE REASON TO BELIEVE THAT ANY PART OF THE INCOME HAD ESCAPED ASSESSMENT AND SUCH ESCAPEMENT WAS BY REASON OF THE OMISSION OR THE FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS AND THEREFORE THE N OTICE ISSUED U/S.148 TO REASSESS THE APPELLANT'S IS TO BE STRUCK DOWN AS INVALID AND MUCH SO THE REASSESSMENT . 6.,.. WITHOUT PREJUDICE TO ANY OF THE AFORESAID GROUNDS THE LEARNED CIT(A) HAVING FOUND THAT NO SPECIFIC ADDITIONS WERE MADE ON THE BASIS OF R EASONS RECORDED OUGHT TO HAVE HELD THAT THE ADDITION OF UNEXPLAINED ADVANCES AT R S .20 CRORES, DEEMED DIVIDEND AT RS.12,41,03,588 AND DISALLOWANCE U/S 14 - A AT RS.42,92,125 COULD NOT BE MADE AND MUCH LESS THE RECASTING OF COMPUTATION OF INCOME STATEMENT AND CONSIDERATION OF INCOME FROM OTHER SOURCES SEPARATELY AND BUSINESS INCOME AS INCOME FROM SPECULATION. THE ORDER OF THE CIT(A) AT PARAGRAPH 8.1.5 IN GIVING A DIRECTION TO ASSESS A SUM OF RSA.75 CRORES IN THE HANDS OF THE APPELLANT AS UNEXPLAINED LOANS AND ADVANCES IS TOTALLY CONTRARY TO THE FACTS AND EVIDENCES ON RECORD AND IS THEREFORE UNSUSTAINABLE. 8. WITHOUT PREJUDICE TO ANY OF THE AFORESAID GROUNDS THE LEARNED CIT(A) HAVING FOUND AS THE MATTER OF FACT THAT THERE WAS NO SPECIFIC FINDING THAT THE APPE LLANT CARRIED ON SPECULATIVE BUSINESS AND FURTHER HAVING HELD THAT THE COMPUTATION MADE BY THE ASSESS ING OFFICER WAS INCORRECT AND THE ENTIRE EXERCISE WAS UNNECESSARY ERRED IN GIVING THE DIRECTION TO RECOMPUTE THE INCOME OF THE APPELLANT WHILE GIVING EFFECT TO HIS APPELLATE ORDER. I.T.A. NO. 6 23 /H/15 AND OTHERS ELEM INVESTMENTS PVT. LTD. AND OTHERS. 13 9. THE LEARNED CIT(A) OUGHT TO HAVE CLEARLY HELD THAT THE INTEREST INCOME WAS ASSESSABLE AS 'BUSINESS INCOME' AND COULD NOT BE ASSESSED UNDER THE HEAD 'INCOME FROM THE OTHER SOURCES' AS HELD BY THE ASSESSING OFFICER. 10. THE LEARNED C1T(A) OUGHT TO HAVE GIVEN A CLEAR FINDING THAT THE INCOME FROM TRADING ACTIVITY IN SHARES WAS BUSINESS INCOME AND NOT SPECULATIVE IN NATURE. 11. THE LEARNED C1T(A) OUGHT TO HAVE CLEARLY HELD THAT THE INCOME ON CAPITAL GAINS AT RS.53,29,598 OUGHT TO HAVE ) BEEN ASSESSED UNDER THE HEAD 'BUSINESS INCOME' AND NOT AS 'INCOME FROM LONG TERM CAPITAL GA INS'. 12. THE LEARNED C1TLA) OUGHT TO HAVE UPHELD THE COMPUTATION OF TOTAL INCOME AS ASSESSED I N THE ORIGINAL ASSESSMENT PASSED ULS 143(3) ON 26.11.2007 AT RS.98,24,760 / - 13. THE APPELLANT DENIES ITS LIABILITY TO BE ASSESSED TO THE L EVY OF INTEREST ULS 234 B AT RS. 5,40,75,690/ - 14. ANY OTHER GROUND OR GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING. 7 . AS REGARDS GROUND NOS. 1 TO 5 REGARDING REOPENING OF ASSESSMENT, L D. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AO MERELY BASED ON THE STATEMENT GIVEN BY THE CHARIMAN OF SCSL SHRI. B. RAMALINGA REDDY, REOPENED THE ASSESSMENT AND THIS AMOUNTS TO CHANGE OF OPINION. HE SUBMITTED THAT AS PER THE JUDGEMENT OF THE HONBLE SUP REME COURT IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD., 320 ITR 561 (SC), NOTICE ISSUED U/S 148 IS NOT VALID WHEN THE ORDER WAS PASSED U/S 143(3) OF THE ACT. 8. THE LD. DR, ON THE OTHER HAND, SUBMITTED THAT WHEN THE AO PASSED ASSESSMENT ORDER U/S 143 (3) DATED 26/11/2007, AO HAS NOT CONSIDERED THE MANIPULATION OF BOOK RESULTS AND ALSO MANIPULATION OF ACCOUNTS FOR THE LAST SEVERAL YEARS, WHICH CAME TO THE NOTICE OF THE CHAIRMAN OF M/S SATYAM COMPUTERS SERVICES LTD., SHRI RAMALINGA RAJU HAS SENT A LETTER TO THE I.T.A. NO. 6 23 /H/15 AND OTHERS ELEM INVESTMENTS PVT. LTD. AND OTHERS. 14 BOARD OF DIRECTORS WITH A COPY MARKED TO SEBI DATED 07/01/2009. HE, THEREFORE, SUBMITTED THAT THE AO HAS NOT EXPRESSED ANY OPINION ON THE ISSUE AND HENCE, THE CHANGE OF OPINION DOES NOT ARISE . THUS, HE SUBMITTED THAT THE AO HAS ISSUED THE NOTICE U/ S 148 VALIDLY AND ASSESSMENT WAS COMPLETED U/S 143(3) RWS 147 OF THE ACT AND FURTHER SUBMITTED THAT THE CASE LAW RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD. (SUPRA) HAS NO APPLICATION TO THE FACTS OF THE CASE OF THE ASSESSEE. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD AS WELL AS GONE THROUGH THE ORDERS OF REVENUE AUTHORITIES. 9 . 1 AS REGARDS THE ISSUE OF REOPENING OF ASSESSMENT RAISED IN GROUND NOS. 1 TO 5 , ON PERUSAL OF THE REASONS RECORDED BY THE AO, WE NOTICED THAT THE AO HAS ISSUED NOTICE WITHIN 4 YEARS AND AO HAS RECORDED DETAILED REASONS AND CAME TO THE CONCLUSION THAT THERE IS AN ESCAPEMENT OF INCOME ON THE GROUND THAT F ALSIFICATION OF BOOKS OF ACCOUNT AND ALSO MANIPULATION OF ACCOUNTS FOR THE LAST SEVERAL YEARS AS WELL AS THE STATEMENT GIVEN BY THE CHAIRMAN SHRI RAMALINGA RAJU AND MATERIAL EVIDENCE, WHICH ARE NECESSARY TO BE CONSIDERED, WERE NOT AT ALL CONSIDERED BY THE AO WHILE PASSING THE ORDER U/S 143 ( 3) OF THE ACT. AFTER GOING THROUGH THE REASONS RECORDED BY THE AO AND MATERIAL AVAILABLE ON RECORD, WE FIND THAT THE AO AFTER RECORDING THE DETAILED REASONS, REOPENED THE ASSESSMENT AND, THEREFORE, THE QUESTION OF CHANG E OF OPINION DOES NOT ARISE BECAUSE THE ASSESSEE HAS NOT EXPRESSED ANY OPINION AT ALL. THUS, WE FIND THAT THE AO HAS RIGHTLY REOPENED THE ASSESSMENT. SO FAR AS THE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE CASE OF KELVINATOR OF INDIA LTD. (SUPRA) I.T.A. NO. 6 23 /H/15 AND OTHERS ELEM INVESTMENTS PVT. LTD. AND OTHERS. 15 IS C ONCERNED, ON WHICH THE RELIANCE PLACED BY THE LD. COUNSEL FOR THE ASSESSEE, IS NOT OF ANY HELP TO THE CASE OF THE ASSESSEE. WE, THEREFORE, UPHOLD THE REOPENING OF ASSESSMENT MADE BY THE AO U/S 147 OF THE ACT. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSE E ON THIS ISSUE ARE DISMISSED. 9.2 AS REGARDS GROUND NOS. 6 TO 12 , WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A) AS THE CIT(A) HAS APTLY GIVEN THE DIRECTIONS TO THE AO WITH REGARD TO ADDITION OF RS. 20 CRORES ON ACCOUNT OF UNEXPLAI NED LOANS AND ADVANCES AND WITH REGARD TO SEGREGATION OF INTEREST INCOME AND ASSESSING IT AS INCOME FROM OTHER SOURCES AND TREATING THE INCOME FROM TRADING IN SHARES AS SPECULATION INCOME. THEREFORE, THE GROUNDS RAISED BY THE ASSESSEE ON THESE ISSUES ARE D ISMISSED. 1 0 . IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. 1 1 . IN ITA NO. 628/H/201 5 , SIMILAR GROUNDS WERE RAISED AS RAISED IN ITA NO. 623/HYD/201 5 AND, THEREFORE, FOLLOWING THE CONCLUSIONS DRAWN THEREIN, WE DISMISS THE APPEAL OF THE ASSESSEE. 1 2 . IN ITA NO. 633/H/2015, SIMILAR GROUNDS WERE RAISED AS RAISED IN ITA NO. 623/HYD/2015 AND, THEREFORE, FOLLOWING THE CONCLUSIONS DRAWN THEREIN, WE DISMISS THE APPEAL OF THE ASSESSEE. 1 3 . IN ALL THE APPEALS, THE ASSESSEE HAS RAISED A GROUND REGARDING C HARGING OF INTEREST U/S 234B. CHARGING OF INTEREST U/S 234B IS CONSEQUENTIAL IN NATURE, AND THEREFORE, THE AO IS DIRECTED ACCORDINGLY. I.T.A. NO. 6 23 /H/15 AND OTHERS ELEM INVESTMENTS PVT. LTD. AND OTHERS. 16 1 4 . IN THE RESULT, ALL THE APPEALS UNDER CONSIDERATION ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 6 TH DECEMBER , 201 9. SD/ - (A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER SD/ - ( V. DURGA RAO ) JUDICIAL MEMBER HYDERABAD, DATED 6 TH DECEMBER , 201 9. KV COPY FORWARDED TO: 1. ELEM INVESTMENTS PVT. LTD., 2) M/S FINCITY INVESTMENTS PVT. LTD., AND 3) HIGHGRACE INVESTMENTS P. LTD., FORTUNE MONARCH MALL, 3 RD FLOOR, #306, PLOT NO. 707 - 709, JUBILEE HILLS, ROAD NO. 36, HYDERABAD 500 033. 4 . A C IT , CENTRAL CIRCLE 8, 2 ND FLOOR, POSNETT BHAVAN, CHURCH BUILDING, TILAK ROAD, HYDERABAD . 5 . CIT (A) - 1 2 , HYDERABAD. 6 . CIT (CENTRAL) , HYDERABAD 7 . THE DR, ITAT, HYDERABAD 8 . GUARD FILE
