TaxTMI 
TaxTMI 
2019 (3) TMI 986
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....are directed against the orders of ld. CIT(A) - I, Hyderabad, all dated, 6th November, 2009 and appeals in ITA Nos. 271, 272, 273 & 274/Hyd/2015 are directed against the orders of ld. CIT(A), all dated 29/01/2015 whereby the CIT(A) confirmed the orders passed u/s 271(1)(c) of the Income-tax Act, 1961 (in short 'the Act'). All appeals are pertaining to AY 2001-02 in the group concern and identical issues are involved in all these appeals, they were clubbed and heard together and therefore, a common order is passed for the sake of convenience. ITA Nos. 111, 113, 118 and 120/Hyd/2010 2. The facts as taken from ITA No. 120/Hyd/2010 in the case of M/s Elem Investment (P) Ltd., are that the assessee filed its return of income for the A.Y.20....
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....assessee has raised objection to reopening of assessment before the CIT(A), which was rejected by him. 5. As regards addition of Rs. 84,00,000/-, it was the contention of the assessee that the AO was not justified in concluding that there was a conversion from investment to stock in trade merely because the investment was treated as inventory for considering the diminution in its value in books of account. In the statement of fact, the assessee submitted that in course of its investment activity, the appellant had invested an amount of Rs. 1,12,00,000/- by way of shares of Gland Pharma Ltd. The investment was made for acquisition of 2,80,000 shares of the said company at a price of Rs. 40/- per share. However, on the Balance Sheet date i....
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....ition made by the AO. 7. Aggrieved by the order of CIT(A), the assessee is in appeal before us raising the following grounds of appeal, which are common in all the appeals under consideration, except the quantum of addition: "1) The Order of the C.I.T. (A)-II, is confirming the Assessment made by the DCIT, Central Circle-I, Hyderabad is unsustainable bath on facts and in Law. 2) The learned C.I.T. (A) - II, Hyderabad failed to note that the reasons recorded for re-opening the Assessment u/s 147 had absolutely no nexus with the Income escaping assessment and therefore ought to have clearly held that the entire re-assessment proceedings and the assessment made thereon are invalid; bad in Law and is to be quashed. ....
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....d Vs. ACIT, [2018] 405 ITR 491 (AP) ii) Tecumseh Products India Pvt. Ltd. Vs. ACIT, 361 ITR 429 9. Ld. DR submitted that AO has followed the due process to reopen the assessment, he brought to our notice the findings of ld. CIT(A) in para 4 of his order and relied on the following cases: i) Gruh Finance Ltd. Vs. JCIT, 123 Taxman 196 (Guj.) ii) ITO Vs. Tech Span India Pvt. Ltd & Anr., 255 Taxman 152 (SC) 10. Considered the rival submissions and perused the material on record. We notice that the assessment was reopened by issue of notice u/s 148 on 05/05/2006, which was after the end of four years from the end of relevant assessment year. Therefore, AO has to first deal with the first proviso of section 147 as....
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....e relevant findings of the Apex Court are reproduced below: "12. Before interfering with the proposed re-opening of the assessment on the ground that the same is based only on a change in opinion, the court ought to verify whether the assessment earlier made has either expressly or by necessary implication expressed an opinion on a matter which is the basis of the alleged escapement of income that was taxable. If the assessment order is non-speaking, cryptic or perfunctory in nature, it may be difficult to attribute to the assessing officer any opinion on the questions that are raised in the proposed re-assessment proceedings. Every attempt to bring to tax, income that has escaped assessment, cannot be absorbed by judicial interven....
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....e of notice under the provision is patently illegal." 10.3 By applying the above ratio, we notice that AO has not recorded any reasons of failure on the part of the assessee. Hence, the reopening itself is illegal. Therefore, in our considered view, the reopening was bad in law and therefore, the same is hereby quashed. Accordingly, we allow the grounds raised by the assessee in this regard. 11. As facts and grounds in ITA Nos. 113, 118, 111/Hyd/2010 are materially identical to that of ITA No. 120/Hyd/2010, following the conclusions drawn therein, we quash the reopening of assessments and allow the grounds raised in these appeals. ITA Nos. 271 to 274/Hyd/2015 12. In these appeals, the following common grounds are raised by the a....