Sri P Ramgopal Varma, Hyderabad V. Addl.CIT, Range-13, Hyderabad

ITA 827/HYD/2013

• Counselvise Citation: 82722514 RSA 2013
• Duration Of Justice: 1 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 22-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P SOMASEKHAR REDDY
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Capital asset; Revision of order; Assessment record
• Section: 143(3); 54F; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER I.T.A. NO. 827/HYD/2013 A.Y. : 2008-09 SRI P. RAMGOPAL VARMA, HYDERABAD. PAN AGFPP 4793 C VS. ADDL. COMMISSIONER OF INCOME-TAX, RANGE 13, HYDERABAD. APPELLANT RESPONDENT ASSESSEE BY: SHRI P. MURALI MOHAN RAO REVENUE BY: SHRI P. SOMASEKHAR REDDY DATE OF HEARING: 08.05.2014 DATE OF PRONOUNCEMENT: 28.05.2014 O R D E R PER SAKTIJIT DEY, JM: THE PRESENT APPEAL OF THE ASSESSEE IS DIRECTED AGA INST ORDER DATED 13/03/2013 PASSED BY THE CIT-I, HYDERABAD U/S 263 OF THE ACT PERTAINING TO AY 2008-09. 2. BRIEFLY STATED, THE ASSESSEE AN INDIVIDUAL IS PU RSUING HIS PROFESSION AS FILM DIRECTOR. FOR THE IMPUGNED ASSES SMENT YEAR, ASSESSEE FILED HIS RETURN OF INCOME ON 07/10/2008 D ECLARING TOTAL INCOME OF RS. 60,64,590/- INCLUDING PROFESSIONAL IN COME OF RS. 60,19,257/-. THE ASSESSEE HAD ENTERED INTO AN AGREE MENT OF SALE ON 20/03/1997 WITH ONE SRI R. DHANANJAYA REDDY FOR PUR CHASING A PLOT BEING NO. 169-PHASE-1, ADMEASURING 2110 SQ.YDS. AT ROAD NO. 13, JUBILEE HILLS, HYDERABAD FOR A CONSIDERATION OF RS. 1,13,94,000/-. AS PER THE TERMS OF AGREEMENT OF SALE ASSESSEE ALSO PA ID A SUM OF RS. 25 LAKHS AS ADVANCE TO THE VENDOR WITH THE UNDERSTA NDING TO PAY THE BALANCE SALE CONSIDERATION BY THE END OF 31/05/1997 OR LATEST BY 30/06/1997 OR AT THE TIME OF REGISTRATION WHICHEVER IS EARLIER. AS IT I.T.A. NO. 827//HYD/2013 SRI P. RAMGPOAL VARMA 2 APPEARS, SINCE THE AGREEMENT OF SALE WAS NOT ACTED UPON BY THE VENDOR, THE ASSESSEE FILED A SUIT FOR SPECIFIC PERF ORMANCE, REGISTERED AS O.S. NO. 414 OF 2004 BEFORE CHIEF JUDGE, CITY CI VIL COURT, HYDERABAD. HOWEVER, THE SUIT WAS DISMISSED BY THE C ITY CIVIL COURT VIDE ORDER DATED 04/11/2006. AGAINST SUCH DISMISSAL ORDER ASSESSEE CARRIED AN APPEAL BEFORE THE HONBLE AP HIGH COURT, REGISTERED AS CMA 47 OF 2007. WHEN THE APPEAL WAS PENDING BEFORE THE HONBLE AP HIGH COURT BOTH THE PARTIES AGREED TO SETTLE THE DISPUTE AMICABLY ON MUTUALLY AGREEABLE TERMS. ACCORDINGLY, A MEMORAN DUM OF UNDERSTANDING WAS ENTERED INTO BETWEEN THE ASSESSEE AND THE LAND OWNER ON 19/02/2007. AS PER THE MOU THE LAND OWNER AGREED TO PAY AN AMOUNT OF RS. 1,50,00,000/- (INCLUDING THE ADVAN CE OF RS. 25 LAKHS PAID BY THE ASSESSEE AT THE TIME OF AGREEMENT OF SA LE) TO ASSESSEE AND ASSESSEE ON HIS PART AGREED TO WITHDRAW/RELINQU ISH ALL HIS CLAIM OVER THE PROPERTY IN QUESTION. THOUGH, IN THE COMPU TATION OF INCOME FOR THE ASSESSMENT YEAR UNDER DISPUTE THE ASSESSEE DISCLOSED THE AMOUNT OF RS. 1,50,00,000/- AS SALE CONSIDERATION R ECEIVED BY HIM FOR TRANSFER OF PLOT AND COMPUTED LONG TERM CAPITAL GAI N OF RS. 1,06,64,262/- BUT AT THE SAME TIME ASSESSEE CLAIMED EXEMPTION OF THE ENTIRE CAPITAL GAIN U/S 54F OF THE ACT TOWARDS INVESTMENT IN PURCHASE OF NEW RESIDENTIAL HOUSE. 3. DURING THE SCRUTINY ASSESSMENT PROCEEDING THE AS SESSING OFFICER CALLED FOR VARIOUS INFORMATIONS AND MATERIA LS FROM THE ASSESSEE BOTH ON PROFESSIONAL INCOME AND LONG TERM CAPITAL GAIN. AFTER VERIFYING THE INFORMATIONS FURNISHED, THE ASS ESSING OFFICER DISALLOWED AN AMOUNT OF RS. 44,73,748/- OUT OF THE PROFESSIONAL EXPENDITURE CLAIMED. SO FAR AS LONG TERM CAPITAL GA IN IS CONCERNED, THE ASSESSING OFFICER AFTER VERIFYING THE DETAILS C AME TO THE CONCLUSION THAT ASSESSEE IS NOT ENTITLED FOR EXEMPT ION U/S 54F OF THE ACT. ACCORDINGLY, ASSESSING OFFICER COMPLETED THE A SSESSMENT U/S 143(3) OF THE ACT VIDE ORDER DATED 29/12/2010 DETER MINING TOTAL INCOME AT RS. 2,12,02,600/-. I.T.A. NO. 827//HYD/2013 SRI P. RAMGPOAL VARMA 3 4. THE CIT EXERCISING HIS POWER U/S 263 OF THE ACT CALLED FOR THE ASSESSMENT RECORDS OF THE ASSESSEE FOR THE ASSESSME NT YEAR UNDER CONSIDERATION AND AFTER VERIFYING THE SAME WAS OF T HE VIEW THAT THE AMOUNT RECEIVED BY THE ASSESSEE FROM THE LAND OWNER SRI DHANANJAYA REDDY BEING A WINDFALL GAIN SHOULD HAVE BEEN ASSESS ED AS INCOME FROM OTHER SOURCES AND NOT AS LONG TERM CAPITAL GAI N. THE ASSESSING OFFICER HAVING ASSESSED IT AS LONG TERM CAPITAL GAI N, THE CIT CONSIDERED THE ASSESSMENT ORDER TO BE ERRONEOUS AN D PREJUDICIAL TO THE INTEREST OF REVENUE. ACCORDINGLY, THE CIT ISSUE D A SHOW CAUSE NOTICE TO THE ASSESSEE PROPOSING TO REVISE THE ASSE SSMENT ORDER. 5. IN RESPONSE TO THE SHOW CAUSE NOTICE, ASSESSEE S UBMITTED HIS REPLY STATING THEREIN THAT THE ASSESSING OFFICER HA VING PASSED THE ASSESSMENT ORDER AFTER CAUSING NECESSARY ENQUIRY AN D WITH DUE APPLICATION OF MIND TO THE FACTS AND MATERIALS ON R ECORD THE ASSESSMENT ORDER CANNOT BE CONSIDERED TO BE ERRONEO US AND PREJUDICIAL TO THE INTEREST OF REVENUE. FURTHER, AS PER THE DEFINITION OF TRANSFER U/S 2(47) OF THE ACT, THERE IS RELINQUI SHMENT OR EXTINGUISHING OF ASSESSEES RIGHT OVER AN ASSET WHI CH RESULTS IN CAPITAL GAIN. THEREFORE, THE DECISION OF THE ASSESS ING OFFICER IN ASSESSING IT TO CAPITAL GAIN IS IN TERMS WITH THE S TATUTORY PROVISION. IT WAS SUBMITTED THAT THE RECEIPTS CANNOT BE CONSIDERE D TO BE CASUAL INCOME OR WINDFALL GAIN. 6. HOWEVER, THE CIT REJECTED THE CONTENTIONS RAISED BY THE ASSESSEE. HE WAS OF THE VIEW THAT AS THE ASSESSEE I S NOT OWNER OF THE ASSET, THERE CANNOT BE EXTINGUISHMENT OF ANY RI GHT AS REFERRED TO U/S 2(47) OF THE ACT. THE CIT HELD THAT THE SURPLUS RECEIVED BY THE ASSESSEE CANNOT BE TREATED AS CAPITAL GAIN BUT HAS TO BE ASSESSED UNDER THE HEAD INCOME FROM OTHER SOURCES. ACCORDI NGLY, HE PASSED AN ORDER U/S 263 OF THE ACT DIRECTING THE ASSESSING OFFICER TO ASSESS THE SURPLUS RECEIVED BY THE ASSESSEE FROM SRI R. DH ANANJAYA REDDY ON SETTLEMENT OF THE DISPUTE AS INCOME FROM OTHER SOURCES. I.T.A. NO. 827//HYD/2013 SRI P. RAMGPOAL VARMA 4 7. THE LEARNED AR CHALLENGING THE ORDER OF THE CIT BOTH ON JURISDICTION AS WELL AS ON MERIT SUBMITTED THAT DUR ING THE ASSESSMENT PROCEEDING THE ASSESSING OFFICER HAS SPECIFICALLY E XAMINED THE ISSUE OF TAXABILITY OF THE AMOUNT RECEIVED FROM SRI R. DH ANANJAYA REDDY BY CALLING FOR VARIOUS INFORMATIONS AND DETAILS RELATI NG TO THE TRANSACTION. IN RESPONSE TO THE QUERIES RAISED BY THE ASSESSING OFFICER, THE ASSESSEE HAS SUBMITTED ALL INFORMATIONS AND DETAILS RELATING TO THE TRANSACTION BEFORE THE ASSESSING OFFICER. IN THIS C ONTEXT, THE LEARNED AR DREW OUR ATTENTION TO THE ORDER SHEET ENTRY DT. 25/10/2010 MADE BY THE ASSESSING OFFICER AND ASSESSEES REPLY FURNI SHING THE INFORMATIONS CALLED FOR, PLACED AT PAGES 15 AND 14 OF THE PAPER BOOK. HE SUBMITTED THAT THE ASSESSING OFFICER AFTER EXAMI NING THE AGREEMENT OF SALE, MOU AND OTHER MATERIALS HAS DECI DED THAT THE AMOUNT RECEIVED IS TO BE ASSESSED AS CAPITAL GAIN. THEREFORE, THE ASSESSING OFFICER HAVING PASSED THE ASSESSMENT ORDE R AFTER CONDUCTING ENQUIRY AND APPLYING HIS MIND TO THE FAC TS AND MATERIALS ON RECORD, THE ASSESSMENT ORDER CANNOT BE HELD TO B E ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVENUE. THE LD. AR REFERRING TO THE TERM TRANSFER AS DEFINED U/S 2(47) OF THE ACT SUBMITTE D THAT RELINQUISHMENT OR EXTINGUISHMENT OF RIGHT OVER AN ASSET ALSO AMOUN TS TO TRANSFER. THEREFORE, WHEN THE ASSESSEE RELINQUISHED HIS RIGHT S OVER THE ASSET ON RECEIVING CERTAIN CONSIDERATION, THERE IS A TRAN SFER IN TERMS OF SECTION 2(47) OF THE ACT AND THE GAIN FROM SUCH TRA NSFER HAS TO BE ASSESSED AS CAPITAL GAIN. IN SUPPORT OF HIS CONTEN TION THE LEARNED AR RELIED UPON THE DECISION IN CASE OF MALABAR INDU STRIAL CO. LTD. VS. CIT, 243 ITR 83 (SC). 8. THE LEARNED DR SUBMITTED THAT THE ASSESSING OFFI CER WITHOUT PROPERLY EXAMINING THE ISSUE HAS ERRONEOUSLY CONCLU DED THAT THE ASSESSEE HAS SOLD THE PLOT. AS THE ASSESSEE HAS NOT SOLD ANY PLOT THE AMOUNT RECEIVED BY THE ASSESSEE ON SETTLEMENT OF DI SPUTE CANNOT BE TREATED AS CAPITAL GAIN BUT ONLY IN THE NATURE OF A WINDFALL GAIN WHICH I.T.A. NO. 827//HYD/2013 SRI P. RAMGPOAL VARMA 5 IS TO BE ASSESSED AS INCOME FROM OTHER SOURCES. THE REFORE, THE CIT WAS JUSTIFIED IN REVISING THE ASSESSMENT ORDER U/S 263 OF THE ACT. IN SUPPORT OF HIS CONTENTION, THE LEARNED DR RELIED UP ON A DECISION IN CASE OF CIT VS. J. DALMIA, 149 ITR 215 (DEL.) 9. WE HAVE HEARD THE PARTIES AND PERUSED ORDERS OF THE REVENUE AUTHORITIES AS WELL AS OTHER MATERIALS ON RECORD. WE HAVE ALSO APPLIED OUR MIND TO THE DECISIONS PLACED BEFORE US. AT THE OUTSET IT NEEDS TO BE STATED THAT LAW IS FAIRLY WELL SETTLED THAT FOR EXERCISING POWERS U/S 263 OF THE ACT TWO CONDITIONS HAVE TO BE SATISFIED CUMULATIVELY. THE CONDITIONS ARE (I) THE ORDER SOUG HT TO BE REVISED MUST BE ERRONEOUS, AND II) IT MUST BE PREJUDICIAL T O THE INTERESTS OF THE REVENUE. IN ABSENCE OF BOTH OR EVEN ANY ONE OF THES E CONDITIONS, THE EXERCISE OF POWER U/S 263 OF THE ACT WILL BE WITHOU T JURISDICTION. KEEPING IN VIEW THE AFORESAID LEGAL PRINCIPLE WE W ILL EXAMINE THE FACTS OF THE PRESENT APPEAL. UNDISPUTEDLY, THE ASSE SSEE HAS ENTERED INTO AN AGREEMENT OF SALE ON 20/03/1997 WITH THE VE NDOR, SRI R. DHANANJAYA REDDY FOR PURCHASE OF A PLOT. IN PART PE RFORMANCE OF THE AGREEMENT OF SALE ASSESSEE ALSO PAID RS. 25 LAKHS T O THE VENDOR AS ADVANCE. AS IT APPEARS, THE VENDOR DID NOT FULFIL H IS PART OF THE CONTRACT, FOR WHATEVER MAY BE THE REASON, IN FINALI ZING SALE OF THE PROPERTY IN FAVOUR OF THE ASSESSEE. THIS COMPELLED THE ASSESSEE TO APPROACH COURT OF LAW FOR ESTABLISHING HIS RIGHT. U LTIMATELY THE DISPUTE WAS SETTLED AMICABLY THROUGH A MOU, AS PER THE TERM S OF WHICH THE VENDOR AGREED TO PAY THE ASSESSEE AN AMOUNT OF RS. 1,50,00,000/- AND THE ASSESSEE AGREEING FOR GIVING UP ALL CLAIMS OVER THE PROPERTY. IT IS EVIDENT FROM THE ORDER SHEET ENTRY DT. 25/10/ 2010 MADE BY THE ASSESSING OFFICER AS WELL AS ASSESSEES REPLY IN RE SPONSE TO THE QUERY MADE BY THE ASSESSING OFFICER THAT THE ASSESS ING OFFICER HAS NOT ONLY MADE SPECIFIC ENQUIRY IN RESPECT OF THE TR ANSACTION RELATING TO THE PURCHASE OF PLOT BUT HE HAS ALSO EXAMINED ALL R ELATED MATERIALS LIKE AGREEMENT OF SALE, MOU ETC. WHILE ASSESSING TH E AMOUNT RECEIVED BY THE ASSESSEE FROM R. DHANANJAYA REDDY UNDER THE HEAD CAPITAL I.T.A. NO. 827//HYD/2013 SRI P. RAMGPOAL VARMA 6 GAIN. FROM THESE FACTS, ONE CAN SAFELY INFER THAT A SSESSING OFFICER HAS PASSED THE ASSESSMENT ORDER AFTER CONDUCTING NE CESSARY ENQIRY AND WITH PROPER APPLICATION OF MIND. EVEN THE CIT N EITHER IN THE SHOW CAUSE NOTICE NOR IN THE ORDER PASSED U/S 263 OF THE ACT HAS ALLEGED LACK OF ENQUIRY OR NON-APPLICATION OF MIND BY THE A SSESSING OFFICER. IN THIS CONTEXT, IT NEEDS TO BE EXAMINED, WHETHER THE DECISION OF THE ASSESSING OFFICER TO ASSESS THE RECEIPTS AS CAPITAL GAIN IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVENUE. FOR TH IS PURPOSE IT IS RELEVANT TO LOOK INTO THE MEANING OF THE EXPRESSION TRANSFER AS ENVISAGED U/S 2(47) OF THE ACT, WHICH READS AS UNDE R: ['TRANSFER', IN RELATION TO A CAPITAL ASSET, INCLU DES, (I) THE SALE, EXCHANGE OR RELINQUISHMENT OF THE A SSET ; OR (II) THE EXTINGUISHMENT OF ANY RIGHTS THEREIN ; OR (III) THE COMPULSORY ACQUISITION THEREOF UNDER ANY LAW ; OR (IV) IN A CASE WHERE THE ASSET IS CONVERTED BY THE OWNER THEREOF INTO, OR IS TREATED BY HIM AS, STOCK-IN-TRADE OF A BUSINE SS CARRIED ON BY HIM, SUCH CONVERSION OR TREATMENT ;] [OR] (IVA) THE MATURITY OR REDEMPTION OF A ZERO COUPON BOND; OR] [(V) ANY TRANSACTION INVOLVING THE ALLOWING OF TH E POSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882 (4 OF 1882) ; OR (VI) ANY TRANSACTION (WHETHER BY WAY OF BECOMING A MEMBER OF, OR ACQUIRING SHARES IN, A CO-OPERATIVE SOCIETY, COMPAN Y OR OTHER ASSOCIATION OF PERSONS OR BY WAY OF ANY AGREEMENT O R ANY ARRANGEMENT OR IN ANY OTHER MANNER WHATSOEVER) WHIC H HAS THE EFFECT OF TRANSFERRING, OR ENABLING THE ENJOYMENT O F, ANY IMMOVABLE PROPERTY. [EXPLANATION 1].FOR THE PURPOSES OF SUB-CLAUSES ( V) AND (VI), 'IMMOVABLE PROPERTY' SHALL HAVE THE SAME MEANING AS IN CLAUSE (D) OF SECTION 269UA .] [EXPLANATION 2.FOR THE REMOVAL OF DOUBTS, IT IS H EREBY CLARIFIED THAT 'TRANSFER' INCLUDES AND SHALL BE DEEMED TO HAVE ALW AYS INCLUDED DISPOSING OF OR PARTING WITH AN ASSET OR ANY INTERE ST THEREIN, OR CREATING I.T.A. NO. 827//HYD/2013 SRI P. RAMGPOAL VARMA 7 ANY INTEREST IN ANY ASSET IN ANY MANNER WHATSOEVER, DIRECTLY OR INDIRECTLY, ABSOLUTELY OR CONDITIONALLY, VOLUNTARIL Y OR INVOLUNTARILY, BY WAY OF AN AGREEMENT (WHETHER ENTERED INTO IN INDIA OR O UTSIDE INDIA) OR OTHERWISE, NOTWITHSTANDING THAT SUCH TRANSFER OF RI GHTS HAS BEEN CHARACTERISED AS BEING EFFECTED OR DEPENDENT UPON O R FLOWING FROM THE TRANSFER OF A SHARE OR SHARES OF A COMPANY REGISTER ED OR INCORPORATED OUTSIDE INDIA;] AS CAN BE SEEN FROM THE AFORESAID PROVISION, RELINQ UISHING OR EXTINGUISHING ONES RIGHT OVER A CAPITAL ASSET ALSO AMOUNTS TO TRANSFER. IT IS A FACT ON RECORD THAT ASSESSEE HAS NOT ONLY ENTERED INTO AN AGREEMENT OF SALE FOR PURCHASE OF PLOT BUT HAS A LSO PAID AN AMOUNT OF RS. 25 LAKHS TO THE VENDOR. THUS, IN THIS PROCESS THE ASSESSEE ACQUIRED RIGHT, THOUGH MAY BE TO A LIMITED EXTENT, OVER THE PROPERTY IN QUESTION. THEREFORE, WHEN THE ASSESSEE, AS PER TERMS OF THE MOU, GAVE UP HIS CLAIM OVER THE PROPERTY AGAINS T CONSIDERATION RECEIVED, CERTAINLY IT CAN BE INTERPRETED THAT THE ASSESSEE HAS RELINQUISHED OR EXTINGUISHED HIS RIGHT OVER THE PRO PERTY. IT IS HIGHLY IMPROBABLE THAT THE VENDOR WOULD HAVE AGREED TO SET TLE THE DISPUTE BY PAYING A HUGE AMOUNT OF RS. 1.5 CRORES FOR A PITTAN CE UNLESS THE ASSESSEE HAD ACQUIRED SOME RIGHT OVER THE PROPERTY. CONSIDERED IN THE AFORESAID PERSPECTIVE, A VIEW CAN BE TAKEN THAT THERE IS A TRANSFER OF CAPITAL ASSET WITHIN THE PURVIEW OF S ECTION 2(47) ATTRACTING CAPITAL GAIN AND WHICH VIEW HAS BEEN TAKEN BY THE A SSESSING OFFICER IN THIS CASE. THEREFORE, WHEN THE ASSESSING OFFICER HAS ENQUIRED INTO THE MATTER, APPLIED HIS MIND TO THE MATERIALS ON RE CORD AND THE VIEW TAKEN BY HIM ON THE ASSESSABILITY OF THE RECEIPT IS ONE OF THE POSSIBLE VIEWS, THE ASSESSMENT ORDER PASSED BY HIM CANNOT BE CONSIDERED TO BE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF RE VENUE. ONLY BECAUSE THE CIT CONSIDERS THE RECEIPTS AS WINDFALL GAIN AND IN HIS OPINION SUCH RECEIPT HAS TO BE ASSESSED AS INCOME F ROM OTHER SOURCES, THE ASSESSMENT ORDER CANNOT BE HELD TO BE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVENUE SO AS TO EM POWER THE CIT TO REVISE IT U/S 263 OF THE ACT. FOR THIS PROPOSITION, WE RELY UPON THE DECISION OF HONBLE SUPREME COURT IN CASE OF MALABA R INDUSTRIAL CO. I.T.A. NO. 827//HYD/2013 SRI P. RAMGPOAL VARMA 8 LTD. VS. CIT (SUPRA) AND OF JURISDICTIONAL HIGH COU RT IN CASE OF SPECTRA SHARES AND SCRIPS PVT. LTD. VS. CIT IN ITTA NOS . 512 OF 2011 & 177 OF 2012 VIDE JUDGMENT DATED 21 ST FEBRUARY, 2013. (313 TAXPUNDIT 12 [2013] 84 CCH 103 APHC)/354 ITR 35. TH E DECISION RELIED UPON BY LEARNED DR IS CLEARLY DISTINGUISHABL E ON FACTS, HENCE, NOT RELEVANT IN THE PRESENT CASE. IN THE AFORESAID VIEW OF THE MATTER WE HAVE NO HESITATION IN HOLDING THAT THE EXERCISE OF POWER U/S 263 OF THE ACT IN THE PRESENT CASE IS NOT JUSTIFIED. ACCOR DINGLY, WE QUASH THE IMPUGNED ORDER PASSED U/S 263 OF THE ACT. 10. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28/05/2014. SD/ - (B. RAMAKOTAIAH) ACCOUNTANT MEMBER SD/ - (SAKTIJIT DEY) JUDICIAL MEMBER HYDERABAD, DATED 28 TH MAY, 2014 KV COPY FORWARDED TO: 1. SRI P. RAMGOPAL VARMA, C/O P. MURALI & CO., CAS. , 6-3- 655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD 82. 2. ADDL. CIT, RANGE 13, HYD 3. THE CIT-I, HYDERABAD. 4. THE DR, ITAT, HYDERABAD