Chava Upender, Warangal V. Income Tax Officer, Ward-1, Kothagudem

ITA 993/HYD/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 98467 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 21-08-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 22-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VENKAT REDDY
• Assessee Lawyers: G MANIKYA PRASAD
• Keywords: Revision of order; Opportunity of being heard; Source of fund
• Section: 143(3); 263

Judgement Text

ITA NO.993 OF 2014 SMC CASE PAGE 1 OF 10 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD SMC A BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO.993./HYD/2014 (ASSESSMENT YEAR:2009-10) SHRI CHAVA UPENDER KOTHAGUDEM, KHAMMAM PAN: AISPC 0612 J VS. INCOME TAX OFFICE R WARD 1 KOTHAGUDEM (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI G. MANIKYA PRASAD FOR REVENUE : SHRI T. VENKAT REDDY, DR DATE OF HEARING : 21 .08.2015 DATE OF PRONOUNCEMENT : 26 .08.2015 O R D E R THIS IS ASSESSEES APPEAL FOR A.Y 2009-10. THIS AP PEAL OF THE ASSESSEE IS AGAINST THE ORDER OF THE CIT DATED 27.03.2014 U/S 263 OF THE I.T. ACT. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A N INDIVIDUAL, DERIVED INCOME FROM SALE OF LIQUOR. HE FILED HIS RE TURN OF INCOME FOR A.Y 2009-10 ON 13.09.2009 DECLARING A TOTAL INC OME OF RS.3,55,510. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE I.T. ACT, AO CALLED FOR VARIOUS DETAILS AND ON EXAMINATION OF THE SAID DETAILS ALONGWITH THE BOOKS OF ACCOUNTS, A O OBSERVED THAT THE ASSESSEE HAS SHOWN HIS CAPITAL AT RS.9.00 LAKHS FOR THE YEAR UNDER CONSIDERATION. HE, THEREFORE, EXAMINED T HE SOURCES OF SUCH CAPITAL. THE ASSESSEE EXPLAINED THAT THE ASSES SEES FATHER IS AN AGRICULTURIST HAVING 18 ACRES OF LAND AND INCOME OF AROUND ITA NO.993 OF 2014 SMC CASE PAGE 2 OF 10 RS.6.00 LAKHS PER ANNUM IS DERIVED THEREFROM AS AGR ICULTURAL INCOME. IT WAS SUBMITTED THAT OUT OF THE ACCUMULATE D AGRICULTURAL INCOME, ASSESSEES FATHER HAD GIVEN RS .9.00 LAKHS TO THE ASSESSEE, WHICH IS APPEARING AS HIS CAPITAL IN THE BALANCE SHEET. ASSESSEE ALSO FURNISHED A COPY OF THE VAO CE RTIFICATE IN RESPECT OF HIS FATHERS AGRICULTURAL INCOME WHEREIN FOR THE FINANCIAL YEARS 2008, 2009 AND 2010, IT WAS CERTIFI ED THAT THE AGRICULTURAL INCOME WAS EARNED AT RS.6.00 LAKHS PER ANNUM. ON EXAMINATION OF THESE DETAILS, AO HELD THAT THE AGRI CULTURAL INCOME OF RS.6.00 LAKHS FROM 18 ACRES OF LAND SEEME D TO BE ON A HIGHER SIDE. THEREFORE, HE ACCEPTED THE AGRICULTURA L INCOME FROM THE LAND TO BE AT RS.2.00 LAKHS PER ANNUM FOR THE F INANCIAL YEARS 2008, 2009 AND 2010 AND THE BALANCE OF RS.3.00 LAKH S WAS TREATED AS UNEXPLAINED CAPITAL OF THE ASSESSEE. ASS ESSEE ALSO AGREED TO SUCH AN ADDITION AND IT WAS ACCORDINGLY A DDED TO THE INCOME RETURNED BY THE ASSESSEE. AO, THEREFORE, COM PLETED THE ASSESSMENT DETERMINING THE TAXABLE INCOME AT RS.6,5 5,510. 3. THEREAFTER, THE CIT PERUSED THE ASSESSMENT RECOR DS AND OBSERVED THAT THE AO HAS NOT CONDUCTED DUE PROBE/IN QUIRIES ON CERTAIN ISSUES SUCH AS: (I) LOWER ADMISSION OF NET PROFIT BY THE ASSESSEE; AND (II) THE SOURCES FOR THE PAYMENT OF LICENCE FEE OF RS.10,24,875 AND ALSO; (III) OTHER HEADS OF EXPENDITURE APPEARING IN THE P&L A/C. HE, THEREFORE, ISSUED A SHOW CAUSE NOTICE U/S 263 O F THE INCOME TAX ACT. ASSESSEE FILED ITS REPLY IN DETAIL. THE CI T WAS, HOWEVER, NOT SATISFIED WITH THE ASSESSEES CONTENTIONS AND H ELD THE ASSESSMENT ORDER TO BE BOTH ERRONEOUS AS WELL AS PR EJUDICIAL TO ITA NO.993 OF 2014 SMC CASE PAGE 3 OF 10 THE INTERESTS OF THE REVENUE. THEREAFTER, HE DIRECT ED THE AO TO REDO THE ASSESSMENT DE NOVO ON MATTERS MENTIONED IN THE SHOW CAUSE NOTICE IN ACCORDANCE WITH LAW. AGAINST THE OR DER OF THE CIT U/S 263, ASSESSEE IS IN APPEAL BEFORE US. 4. THE LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HE FIRST ISSUE ON WHICH THE REVISION IS SOUGHT TO BE MADE IS THE SOURCE OF FUNDS FOR PAYMENT OF THE LICENCE FEE. HE SUBMITTED THAT THE AO HAS RECORDED, IN HIS ASSESSMENT ORDER, THAT THE ASS ESSEE HAS SHOWN HIS CAPITAL AT RS.9.00 LAKHS AND FURTHER THAT THE ASSESSEE HAD PAID LICENCE FEES OF RS.10,24,875 FOR THE RELEV ANT A.Y OUT OF THE SAID CAPITAL. HE SUBMITTED THAT THE AO HAD CALL ED FOR THE DETAILS RELATING TO THE SOURCES OF INVESTMENT OF RS .9.00 LAKHS AND ASSESSEE HAD EXPLAINED THE SAME AS THE AGRICULTURAL INCOME OF HIS FATHER. HE SUBMITTED THAT THE AO HAS VERIFIED T HE DETAILS ABOUT THE LAND HOLDINGS OF THE ASSESSEE AND ONLY TH EREAFTER HAS HE ACCEPTED THE AGRICULTURAL INCOME OF RS.2.00 LAKH S PER ANNUM TO BE THE SOURCE FOR THE CAPITAL WHICH HAS BEEN UTI LISED BY HIM FOR PAYMENT OF LICENCE FEE. HE SUBMITTED THAT IT IS NOW CLEAR THAT THE AO HAD CONDUCTED THE DUE INQUIRY AND HAD ACCEPT ED THE SOURCE OF THE CAPITAL OF A SUM OF RS.6.00 LAKHS AND THE BALANCE SUM OF RS.3.00 LAKHS WAS ADDED TO THE RETURNED INCO ME OF THE ASSESSEE AND THEREFORE, IT IS CLEAR THAT THE AO HAD MADE PROPER INQUIRIES BEFOR ACCEPTING THE ASSESSEES CONTENTION . HE SUBMITTED THAT ONCE THE AO HAD EXERCISED DUE CARE AND HAD CON DUCTED NECESSARY INQUIRIES, SUCH ORDER IS NOT AMENABLE TO REVISIONAL JURISDICTION. IN SUPPORT OF HIS CONTENTION, HE PLAC ED RELIANCE UPON THE JUDGMENT OF THE HON'BLE DELHI HIGH COURT I N THE CASE OF DIRECTOR OF INCOME TAX VS. JYOTI FOUNDATION (357 IT R 388) AND ITA NO.993 OF 2014 SMC CASE PAGE 4 OF 10 ALSO THE DECISION OF THE COORDINATE BENCH OF THIS T RIBUNAL IN THE CASE OF M/S. SHANTI TRANSPORT IN ITA NO.995/HYD/201 4 DATED 10.10.2014. 5. AS REGARD TO THE SECOND ISSUE ON WHICH REVISION IS SOUGHT TO BE MADE, HE SUBMITTED THAT THE ASSESSEE HAD RETU RNED A G.P OF 19.99% ON THE TURNOVER AND THE NET PROFIT OF 4.0 3% OF THE TURNOVER AND THAT THE CIT OBSERVED THAT AS PER THE INFORMATION RECEIVED FROM THE A.P. BEVERAGE CORPORATION LTD, TH E SUPPLIER OF LIQUOR TO THE ASSESSEE, THE RETAILERS MARGIN RANGES FROM 20 TO 27% DEPENDING ON THE ITEMS OF LIQUOR AND THAT THE A SSESSEES DECLARATION OF THE G.P MARGIN IN THE PREVAILING MAR KET CONDITIONS WAS LOW AND THEREFORE, ACCORDING TO HIM THE AO OUGH T TO HAVE MADE FURTHER INQUIRIES. THE LD COUNSEL FOR THE ASSE SSEE SUBMITTED THAT FOR THE ABOVE DEFICIENCIES OF INQUIR IES, THE CIT WAS OF THE OPINION THAT THE ASSESSMENT ORDER WAS ER RONEOUS AS WELL AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE AND ACCORDINGLY DIRECTED THE AO TO REDO THE ASSESSMENT. 6. THE LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT D UE TO HEAVY COMPETITION IN THE FIELD, THE ASSESSEE HAD TO BID HIGHER AMOUNT FOR SANCTION OF THE LICENCE TO SELL LIQUOR A ND EXCEPT FOR THE HUGE LICENCE FEES, THE EXPENDITURE INCURRED BY THE ASSESSEE ON OTHER ITEMS IS VERY MINIMAL. HE SUBMITTED THAT AFTER TAKING INTO CONSIDERATION THE LICENCE FEE AND OTHER RELATE D EXPENSES ONLY, THE ASSESSEE HAD RETURNED A G.P. RATE OF 19.9 9% AND THE NET PROFIT RATE OF 4.03%. HE SUBMITTED THAT IN SIMI LAR CIRCUMSTANCES, THIS TRIBUNAL IN THE CASE OF M/S SRI NIVASA WINES HAD ACCEPTED 3% TO BE A REASONABLE NET PROFIT. THER EFORE, ITA NO.993 OF 2014 SMC CASE PAGE 5 OF 10 ACCORDING TO HIM THERE WAS NO EVIDENCE BEFORE THE C IT THAT THE ASSESSMENT ORDER WAS ERRONEOUS AND PREJUDICIAL TO T HE INTERESTS OF THE REVENUE ON BOTH THE ISSUES. 7. THE LD DR, ON THE OTHER HAND, SUPPORTED THE ORDE R OF THE CIT AND SUBMITTED THAT THE CIT HAS BROUGHT OUT CLEA RLY IN HIS ORDER THAT THE AO HAD NOT MADE SUFFICIENT AND PROPE R INQUIRIES TO DETERMINE THE INCOME OF THE ASSESSEE. HE, THEREF ORE, SUBMITTED THAT THE ORDER OF THE CIT U/S 263 IS JUSTIFIED AND IS TO BE UPHELD. 8. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, I FIND THAT THE ASSESSMENT ORDER IS PASSED U/S 143(3) OF THE INCOME TAX ACT AFTER MAKING CERTAIN INQUIRIES A BOUT THE SOURCE OF INVESTMENT IN THE ASSESSEES BUSINESS OF SELLING OF INDIAN MADE FOREIGN LIQUOR. ASSESSEE HAD TO PARTICI PATE IN A BID FOR A LICENCE AND HAD TO PAY A SUM OF RS.10,24,875 AS LICENCE FEE. I FIND THAT THE ASSESSEE HAS EXPLAINED THE SOURCE O F SUCH INVESTMENT AS THE AGRICULTURAL INCOME OF THE ASSESS EES FATHER. THE ASSESSEES FATHER OWNING 18 ACRES OF LAND AND D ERIVING AGRICULTURAL INCOME THEREFROM IS NOT DENIED BY ANY OF THE LOWER AUTHORITIES. AO HAS IN FACT, CALLED FOR THE DETAILS AND HAS ACCEPTED A SUM OF RS.2.00 LAKHS PER ANNUM TO BE A R EASONABLE AGRICULTURAL INCOME FROM THE SAID LAND AND HAS ALSO ACCEPTED THE SAME AS THE SOURCE FOR THE INVESTMENT. THE CIT HAS NOT BROUGHT OUT ANY MATERIAL ON RECORD TO DISBELIEVE THESE FIND INGS OF THE AO. FURTHER, AS REGARDS THE G.P RATE OF 19.99% OVER THE TURNOVER DECLARED BY THE ASSESSEE, THE CIT HAS HELD THE ASSE SSMENT ORDER TO BE ERRONEOUS SINCE ACCORDING TO THE INFORMATION PROVIDED BY THE A.P. BEVERAGE CORPORATION LTD, THE RETAILERS MA RGIN RANGES ITA NO.993 OF 2014 SMC CASE PAGE 6 OF 10 FROM 20 TO 27%, DEPENDING ON THE ITEM OF LIQUOR SOL D BY THE RETAILER. THE LD COUNSEL FOR THE ASSESSEE HAD POINT ED OUT THAT THE RETAIL SHOP RUN BY THE ASSESSEE WAS IN A SMALL VILL AGE IN NALGONDA WHERE THE PEOPLE WOULD CONSUME ONLY CHEAPE R LIQUOR AND THEREFORE EARNING OF HIGH MARGIN WAS NOT POSSIB LE. WE FIND THAT THE CIT HAS RELIED UPON THE INFORMATION PROVID ED BY THE A.P. BEVERAGE CORPORATION LTD FOR COMING TO THE CONCLUSI ON THAT THE G.P DECLARED BY THE ASSESSEE WAS ON THE LOWER SIDE. 9. ON BOTH THESE ISSUES, THE CIT WAS OF THE OPINIO N THAT THE AO HAS CONDUCTED INADEQUATE INQUIRIES AND THEREFORE , THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO TH E INTERESTS OF THE REVENUE.. BEFORE ADJUDICATING ON THE MERITS OF THE FACTS OF THE CASE, I DEEM IT NECESSARY TO SEE THE SCOPE OF S ECTION 263 OF THE INCOME TAX ACT AND WHETHER THE ORDER OF THE CIT U/S 263 IS WITHIN SUCH SCOPE. THE ORDER U/S 263 CONSISTS OF 4 STAGES. IN THE FIRST STAGE, THE CIT CALLS FOR INFORMATION AND EXAM INES THE DETAILS OF ANY PROCEEDINGS UNDER THE ACT AND FOR THIS PURPO SE, HE NEED NOT SHOW ANY REASON. THEN IN THE 2 ND STAGE, HE MAY CONSIDER THAT ANY ORDER PASSED UNDER THE ACT BY THE AO IS ERRONEO US IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENU E AND FOR THIS PURPOSE, HE EXERCISES HIS AUTHORITY BY CALLING FOR AND EXAMINING THE RECORDS AS ABOVE AND DURING THIS STAGE OF CONSI DERATION, THERE IS NO QUESTION OF THE ASSESSEE APPEARING OR M AKING ANY SUBMISSIONS. IT IS AFTER CALLING FOR AND EXAMINING THE RECORDS THAT THE CIT CONSIDERS THAT THE ORDER OF THE AO IS ERRON EOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENU E. IT IS AT THIS STAGE THAT THE 3 RD STAGE OF SECTION 263 COMES INTO OPERATION. AFTER THE FIRST TWO STAGES WHICH ARE PURELY ADMINISTRATIV E, THE 3 RD STAGE ITA NO.993 OF 2014 SMC CASE PAGE 7 OF 10 ACQUIRES A QUASI JUDICIAL CHARACTER, WHEREIN THE CI T IS REQUIRED TO GIVE THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTER MAKING OR CAUSING SUCH INQUIRIES TO BE MADE, AS HE DEEMS NECESSARY, HE MAY PASS AN ORDER THEREON. THE 4 TH STAGE IS WHERE THE CIT EXERCISES HIS POWER OF ENHANCING OR MODIFYI NG THE ASSESSMENT OR CANCELLING THE ASSESSMENT AND DIRECTI NG A FRESH ASSESSMENT. THUS, U/S 263 OF THE I.T. ACT, THE CIT IS EXERCISING SUPERVISORY JURISDICTION AND THE CIT CAN ENFORCE TH E POWER OF REVISION ONLY WHEN THE ASSESSMENT ORDER IS BOTH ERR ONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE RE VENUE. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. GA BRIEL INDIA LTD (203 ITR 108) HAS HELD THAT THE COMMISSIONER CA NNOT INITIATE PROCEEDINGS U/S 263 OF THE I.T. ACT WITH A VIEW TO STARTING FISHING AND ROWING INQUIRIES IN MATTERS OR ORDERS WHICH ARE CONCLUDED, AS SUCH ACTION WILL BE AGAINST THE WELL ACCEPTED PO LICY OF LAW THAT THERE MUST BE A POINT AND FINALITY IN ALL LEGAL PRO CEEDINGS, SO THAT STALE ISSUES SHOULD NOT BE REACTIVATED BEYOND A PAR TICULAR STAGE AND THAT LAPSE OF TIME MUST INDUCE REPOSE IN AND SE T AT REST JUDICIAL AND QUASI-JUDICIAL CONTROVERSIES AS IT MUS T IN OTHER SPHERES OF HUMAN ACTIVITY. IT WAS FURTHER HELD THA T INQUIRY AND OR FRESH DETERMINATION CAN BE DIRECTED BY THE COMMI SSIONER ONLY AFTER COMING TO THE CONCLUSION THAT THE EARLIER FIN DING OF THE AO WAS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF T HE REVENUE. THUS, BEFORE DIRECTING THE FRESH DETERMINATION OF T HE INCOME OF THE ASSESSEE, THE CIT U/S 263, MUST ARRIVE AT THE C ONCLUSION THAT THE ORDER OF THE AO IS BOTH ERRONEOUS AND PREJUDICI AL TO THE INTERESTS OF THE REVENUE. IN THE FACTS OF THE CASE BEFORE ME, THE CIT HAS SOUGHT TO REVISE THE ASSESSMENT ORDER ON TW O GROUNDS, THE FIRST BEING THE SOURCE FOR THE PAYMENT OF LICEN CE FEE AND THE ITA NO.993 OF 2014 SMC CASE PAGE 8 OF 10 CORRECTNESS OF THE GROSS PROFIT RATE RETURNED BY TH E ASSESSEE. AS REGARD THE FIRST ISSUE IS CONCERNED, I FIND THAT TH E AO HAS MADE INQUIRIES BEFORE ACCEPTING THE ASSESSEES CONTENTIO N IN PART. THEREFORE, IT IS CLEAR THAT THE ASSESSMENT ORDER IS NOT ERRONEOUS AS FAR AS THIS ISSUE IS CONCERNED. THE AO HAS ACCEP TED THE CONTENTION OF THE ASSESSEE AFTER MAKING SUFFICIENT AND NECESSARY INQUIRIES. AS REGARDS THE 2 ND ISSUE IS CONCERNED, I FIND THAT THE CIT HAS COME TO THE CONCLUSION THAT THE ASSESSMENT ORDER IS ERRONEOUS AS THE AO HAS NOT MADE ANY INQUIRIES WITH REGARD TO THE REASONABLENESS OF THE G.P. RETURNED BY THE ASSE SSEE. HOWEVER, THE ORDER CAN BE REVISED ONLY IF IT IS ALS O FOUND TO BE PREJUDICIAL TO THE INTERESTS OF THE REVENUE. EVEN A S PER THE INFORMATION OBTAINED BY THE CIT FROM THE A.P. BEVER AGE CORPORATION LTD, THE RETAILERS G.P. MARGIN RANGES FROM 20 TO 27% DEPENDING ON THE ITEM OF LIQUOR. EXCEPT RELYING UPON THIS INFORMATION, THE CIT HAS NOT MADE ANY INQUIRIES WIT H REGARD TO THE QUALITY OF THE LIQUOR SOLD BY THE ASSESSEE AND ALSO HOW THE MARGIN RETURNED BY THE ASSESSEE IS LOWER THAN THE M ARGIN MENTIONED BY THE A.P. BEVERAGES CORPORATION. THE G. P. MARGIN RETURNED BY THE ASSESSEE IS 19.99% WHICH CAN BE ROU NDED OFF TO 20% WHICH IS LOWER OF THE MARGIN SUBMITTED BY THE A .P. BEVERAGE CORPORATION LTD. WHEN THE ASSESSEE HAS OFFERED THE G.P. AT 20% ON THE BASIS OF ITS BOOKS OF ACCOUNTS AND BOTH THE AO AS WELL AS THE CIT HAVE NOT BEEN ABLE TO FIND ANY FAULT WITH T HE SAID BOOKS, I DO NOT SEE HOW THE ORDER OF THE AO IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. HOWEVER, AS RIGHTLY POINTED OUT BY THE LD COUNSEL FOR THE ASSESSEE, THE HON'BLE DELHI HIGH COURT IN T HE CASE OF DIRECTOR OF INCOME-TAX VS. JYOTHI FOUNDATIONS (357 ITR 388), AFTER ANALYZING SEVERAL OTHER DECISIONS, HELD THAT IF THE REVISING ITA NO.993 OF 2014 SMC CASE PAGE 9 OF 10 AUTHORITY FEELS THAT THE AO HAS NOT CONDUCTED PROPE R/ADEQUATE INQUIRY, THEN HE HIMSELF SHOULD HAVE CONDUCTED INQU IRY TO RECORD A FINDING THAT THE ASSESSMENT ORDER WAS ERRONEOUS B UT SHOULD NOT HAVE SET ASIDE THE ORDER AND DIRECTED THE AO TO DO THE INQUIRIES. FURTHER THE HON'BLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS. RAMESH SINGH DATED 24.04.2012 HAS H ELD THAT WHEN THE ASSESSMENT ORDER REVEALS THAT AO HAS CONDU CTED INQUIRY, IT CANNOT BE SET ASIDE/REVISED ONLY BECAUS E THE CIT FEELS THAT INQUIRY CONDUCTED IS NOT ADEQUATE. I FIND THAT THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF M/ S SHANTI TRANSPORT, KOTHAGUDEM (ITA NO.995/HYD/2014), DATED 10.10.2014 HAS FOLLOWED THESE DECISIONS TO HOLD THA T WHERE THE AO AFTER EXAMINING THE BOOKS OF ACCOUNTS AND OTHER MATERIALS ON RECORD HAS COME TO A DEFINITE CONCLUSION THAT THE B OOKS OF ACCOUNTS ARE NOT RELIABLE AND AFTER REJECTING THE S AME HAS ESTIMATED THE PROFIT, IT CANNOT BE STATED THAT THE AO HAS NOT CONDUCTED ANY INQUIRIES AND THERE IS NON APPLICATIO N OF MIND BY THE AO. I FIND THAT THE FACTS OF THE CASE BEFORE M E ARE ALSO SIMILAR AND FOR REASONS GIVEN ABOVE, I QUASH THE OR DER OF THE CIT U/S 263 OF THE I.T. ACT. 10. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH AUGUST, 2015. S D/ - ( P. MADHAVI DEVI ) JUDICIAL MEMBER HYDERABAD, DATED 26 TH AUGUST, 2015. ITA NO.993 OF 2014 SMC CASE PAGE 10 OF 10 VNODAN/SPS COPY TO: 1. SHRI G.S. MADHAVA RAO & CO. CAS, SUDHARMA BUILDINGS , MG ROAD, WARANGAL 2. INCOME TAX OFFICER WARD 1 KOTHAGUDEM 3. CIT, SVR PLAZA, D.NO.40-6-15 SIDDHARTHA PUBLIC SCHO OL ROAD, MOGHAIRAJPURAM, VIJAYAWADA 520010 4. THE DR, ITAT, HYDERABAD 5. GUARD FILE BY ORDER