TaxTMI 
TaxTMI 
2023 (1) TMI 1394
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....turn of income in Tapal on 13.11.2018 without declaring the income as admitted by the Partner during the search on oath in the statement recorded u/s 132(4) on 20.9.2017 and sworn statements dated 20,9,2017, 25.9.2017 and 17.11.2017, and the affidavit dated 26.10.2017. The Assessing Officer referred to the sworn statements and the affidavit and noted that other than submitting the return of income in the Tapal on 13.11.2018, the partner of the assessee firm Shri Gaddam Shyam Prasad Reddy also made a submission in Tapal on 13.11.2018 retracting the statement on a stamp paper for the sworn statement. In the said submission, it was submitted that the assessee has withdrawn the statement recorded u/s 132(4) on 20.9.2017. After considering the affidavit containing the retraction of the statement and the forced sworn statement and statement recorded during the course of search and seizure proceedings, the Assessing Officer completed the assessment u/s 153A/147 of the I.T. Act, 1961 determining the total income of the assessee at Rs. 42.00 lakhs by making addition u/s 69 of the I.T. Act. 3. Subsequently, the learned PCIT examined the record and observed that the assessee has purch....
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....fied with the arguments advanced by the assessee. He noted that even though the contention of the assessee at Point No. 1 & 2 above are correct, however, it does not make the present order proposed to be revised u/s 263, as not erroneous or not prejudicial to the interest of the Revenue. He observed that the order passed u/s 144 r.w.s. 153A by the Assessing Officer dated 12.12.2019 is erroneous and prejudicial to the interest of the Revenue as it failed to bring to tax the unaccounted investment in the three properties purchased in the name of the assessee during the A.Y 2014-15. He referred to the relevant portion of each of the three properties and thereafter held that the entire consideration for purchase of these three properties was paid by the assessee on or before the date of execution of these sale deeds, which is on 11.02.2014. This falls in Assessment Year 2014-15. Hence, even if the registration of these sale deeds took place in Assessment Years 2015-16 and 2017-18, it is of little consequence and the material fact of year of payment of purchase price does not change. The year of payment being Assessment Year 2014-15 and the payments being unaccounted, it has to be ....
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....en up and decided u/s. 263. In view of all the above, he held that the Assessment Order passed u/s. 144 r.w.s. 153A dated 12.12.2019, in the case of the assessee for Assessment Year 2014-15, is erroneous and prejudicial to the interest of Revenue. He, therefore, set aside the order to file of the Assessing Officer for the limited purpose of bringing to tax for unaccounted investment in the Assessment Year 2014-15, after giving proper opportunity of being heard to the assessee and also enabling the assessee to furnish necessary evidence, if any, to the Assessing Officer during the proceedings being taken up in consequence to this order. 6. Aggrieved with such order of the PCIT, the assessee is in appeal before the Tribunal by raising the following grounds: "1. The order u/s 263 of the Income Tax Act, 1961 (hereinafter referred to as the Act') passed by the Ld. Pr. Commissioner of Income Tax, Hyderabad (hereinafter referred to as 'the Ld. Pr. CIT) is erroneous both on facts and in law. 2. The Ld. Pr. CIT has grossly erred in passing the revisionary order without satisfying the twin conditions that the order should be both erroneous and prejudicial to the ....
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....ing the order to be revised u/s 263. 2(h) The Ld. Pr. CIT ought to have appreciated the fact that the AO has also brought to tax these sale deeds transactions in AY 2015-16 and 2017-18 in the hands of the assessee and thus, there is no escapement of any portion of income to tax and thus there is no prejudicial interest calling for Revenue u/s 263. 3. The Ld. Pr. CIT ought to have appreciated the fact that the order passed 3. by the Assessing officer is not erroneous and nowhere prejudicial to the interest of the revenue as the taxation of the same transaction was already done in the individual hands of Gaddam Shyam Prasad Reddy & the appellant firm. Thus, here there is no loss of Revenue and hence the revision and direction for adding back the same amounts to double taxation and unjustified in law. 4. The Ld. Pr. CIT failed to appreciate the legal position that no single incidence of accrual of revenue to an assessee can be brought to tax in two years and that when once a certain transaction has been brought to tax in a particular year by an AO, the Ld. Pr. CIT cannot direct the same income to be taxed in other year, unmindful of already made assessment a....
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.... and thereafter he has taken a possible view. He submitted that the only issue raised by the PCIT in the 263 proceedings is regarding the year of taxability. He submitted that while according to the PCIT, the cash amount paid for the purchase of the land has to be taxed in the year under consideration, however, the assessee in the subsequent years has offered the same to tax and therefore, it is revenue neutral. Relying on the following decisions, he submitted that when the tax rate is uniform in present A.Y and subsequent A.Ys, then there is no need to continue the litigation as the dispute is purely academic in nature. i) Hon'ble Supreme Court in the case of Berger Paints India Ltd vs. CIT (2004)(135 Taxman 586). ii) Hon'ble Supreme Court in the case of CIT vs. Excel Industries Ltd (2013) 38 Taxmann.com 100 iii) Hon'ble Bombay High Court in the case of CIT vs. Nagri Mills Co. Ltd (1958) 33 ITR 681. iv) Hon'ble Bombay High Court in the case of PCIT vs. Rohan Projects (2020) 113 Taxmann.com 339. 9. He submitted that the Partners in the statement recorded u/s 132(4) had admitted the source of such cash payment as out of their un....
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....king the jurisdiction u/s 263 of the I.T. Act is not in accordance with law. i) Hon'ble Supreme Court in the case of CIT vs. Excel Industries Ltd (2013) 38 Taxmann.com 100 (S.C) ii) Hon'ble Bombay High Court in the case of Skyline Great Hills (68 Taxmann.com 188) iii) Hon'ble Supreme Court in the case of Calcutta Co. Ltd (1959) 3 ITR 1 iv) Hon'ble Delhi High Court in the case of CIT vs. Canon India (P) Ltd (2016) 66 Taxmann.com 88 v) ITAT Kolkatta in the case of Magma Fincorp Ltd vs. DCIT (2017) (82 taxmann.com 481) vi) ITAT Mumbai in the case of Mahindra Telecommunications Investment (P) Ltd vs. Income Tax Officer (ITA 2832/Mum/2012) vii) ITAT Hyderabad in the case of CM Gopal vs. DCIT (ITA 883/Hyd/2019). 13. The learned Counsel for the assessee referring to copy of sale deed No. 12540/16 dated 11.02.2014 copy of which is placed at Page 45 to 64 of the Paper Book filed by the Revenue, drew the attention of the Bench to Page 48 and submitted that the sale deed was presented before the Office of the SRO on 22.5.2014 although this deed was prepared on 11.2.2014. Referring to copy of sale deed 7201/....
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....he case of Crompton Greaves in ITA Nos. 1994 & 2863, dated 1.2.2016 for the A.Y 2007-08, he submitted that the CIT can invoke the provisions of 263 of the I.T. Act where the Assessing Officer failed to make proper inquiry, examination and verification as warranted for proper completion of the assessment. He accordingly submitted that the grounds raised by the assessee should be dismissed. 17. We have heard the rival arguments made by both the sides, perused the orders of the AO and PCIT and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us by both sides. We find the assessee M/s GRR Holdings is a partnership firm in which Shri Gaddam Shyam Prasad Reddy and Shri Sayed Mohammad Fayaz are the partners. A search & seizure operation u/s 132 of the I.T. Act was conducted in the case of the assessee on 20.09.2017. The Assessing Officer in the assessment order at Para 11 of the order has mentioned as under: "12. The assessee firm's partner Shri Gaddam Shyam Prasad Reddy duly admitted the additional income of Rs. 34.65 crores on oath in written statements for a land admeasuring Ac 11.33 guntas in Sy No. 2....
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....eration paid Cheque/DD/Pay order No. Paid in cash 1 7200/2014 dated 11.02.2014 Ac 3.11 guntas (15,851 sq.yards Rs.10,88,50,000 (5) Cheque of Rs. 1.50 lakhs vide No. 701837 of SBI Abids Branch dated 11.2.2014 6) Pay order No. 002209 for Rs. 1.50 lakhs dated (7) 4.2.2014 drawn on HDFC Bank, Hyderguda Branch, Hyderabad Rs.10,85,50,000 2 7201 of 2014 Dated 11.02.2014 Ac 4.11 guntas (20-,691 sq.yards) Rs.14,38,50,000 (1) Cheque of Rs. 3.50 lakhs vide No. 701835 of SBI Abids Branch dated (8) 11.2.2014 (2) Pay order No. 804423 for Rs. 3.50 lakhs dated 4.2.2014 drawn on SBI Hyderabad Gunfoundry Branch, Hyderabad Rs.14,31,50,000 3 12540/2016 Regd. On 11.02.2014 Ac. 4.11 guntas (20691 sq.yards) Rs/14.38,50,000 (1) Cheque of Rs. 3.50 lakhs vide No. 701836 of SBI Abids Branch dated 11.2.2014 (2) Pay order No. 804424 for Rs. 3.50 lakhs dated 4.2.2014 drawn on State Bank of Hyderabad Gunfoundry Branch Rs.14,31,50,000 Total Ac. 11.33 guntas Rs.39,65,50,000 Rs.17,00,000 Rs.39,48,50,000 Ans Yes. I have perused the above documents bearing ....
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....ncome for the financial year 2013-14, relevant to the asst, year 2014- 15 and shall pay taxes on such amount accordingly. 19. The various other questions put by the Investigation Wing has also been considered by the Assessing Officer in the body of the assessment order which are as under: "Q.5 Please go through the registered sale deed(s) bearing nos. 7200/14,7201/14 and 12540/16 registered in the name of Mis. GRR Holdings, Hyderabad on 11.02.2014 wherein the stamp duty paid works out to Rs. 1,68,91,012/, Rs. 1,90,28,892/ and Rs. 1,92,23,850 respectively. Please explain the sources for payment of stamp duty paid totaling to Rs. 5,51,43,754/-. Ans: Out of the said amount of Rs. 5, 51, 43, 754/- paid towards stamp duty for purchase of above properties, I have paid Rs. Rs. 51, 43, 754/- out of my personal income which are not undisclosed to the department and now I admit the amount of Rs. 31,43,754/- for the asst, year 2014-15 as my undisclosed income and pay the taxes on the same accordingly. In this regard I submit that in my statement recorded on 20.09.2017, us. 132(4) of the Act, at my residence i.e., Villa No. 19, ....
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....nce on 20-09-2017 at his residence. In his statement, he has deposed that I have paid/contributed Rs. 5,00,00,000/- towards purchase of land by M/s. GRR Holdings, Hyderabad in which I am a partner, I once again reiterate that I have paid/contributed Rs. 20,00,000/- (Twenty Lakhs only) towards purchase of land. I do not know under which circumstances Mr. G. Shyam Prasad Reddy has deposed that I have paid/contributed Rs. 5,00,00,00%- towards purchase of land by M/s. GRR Holdings, Hyderabad. I once again confirm that I have paid/contributed of Rs. 20,00,000/- only. The above deposition was once again reiterated by Mr. Syed Mohammed Fayaz in his statement recorded ws.132(4) of the Act. I am showing you the above wo statements. Please go through the same and give your comments. Ans. I do not know as to why Mr. Syed Mohammed Fayaz has denied that he has paid/contributed Rs. 5 crores towards purchase of land at Kondapur, Hyderabad by M/s.GRR Holdings, Hyderabad. I once again reiterate that Mr. Syed Mohammed Fayaz did pay/contribute an amount of Rs. 5 crores towards purchase of land admeasuring Ac. 11.33 guntas by M/s.GRR Holdings, Hyderabad for a tot....
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.... 6 7200/14 (P658/14) Behind Page No. 2 500000 11.2.14 2014-15 500000 7 7200/14 (P658/14) Behind Page No. 2 6633180 22.5.14 2015-16 6633180 8 7200/14 (P658/14) Behind Page No. 3 1966120 30.5.14 2015-16 1966120 9 7200/14 (P658/14) Behind Page No. 4 886760 4.9.14 2015-16 886760 10 11 12540/16 (P660/14) Behind Page No. 2 1000000 4.2.14 2014-15 1000000 12 12540/16 (P660/14) Behind Page No. 2 1000000 22.5.14 2015-16 100000 13 12540/16 (P660/14) Behind Page No. 3 5188125 9.9.16 2017-18 5188125 14 12540/16 (P660/14) Behind Page No. 3 5847500 22.9.16 2017-18 ....
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....ies in the hands of the partners, a fact not disputed by the PCIT. Similarly, the Assessing Officer has also brought to tax the amount of cash paid in the year of registration of the property instead of bringing to tax in the impugned A.Y as suggested by the PCIT. Under these circumstances we have to see as to whether the order passed by the Assessing Officer is erroneous and prejudicial to the interest of the Revenue or the view taken by the Assessing Officer is a possible view. 22. A perusal of the questions put by the Inv. Wing during the course of search reveals that the partners have admitted the cash amount paid for the purchase of the properties as their undisclosed income and offered the same to tax. The Assessing Officer in the assessment order has considered the cheque amount paid and the registration expenses in the hands of the firm whereas he has not brought to tax the cash portion in the hands of the partnership firm but added the same as undisclosed income in the hands of the partners, a fact not disputed by the PCIT in the order passed u/s 263. Once the cash amount is brought to tax in the hands of the partners as per their admission before the Investigation Wing....
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....ter which do not affect the taxability of the assessee or the tax that the Department is likely to collect from him whether in one year or the other." Nothing has been shown to us as to why the above observation will not apply to the present facts." 25. We, therefore, are of the opinion that once the Assessing Officer has brought to tax the amounts as per the sale deeds in A.Y 2015-16 & 2016-17 in the hands of the assessee firm, a fact brought on record by the PCIT himself, therefore, we are of the considered opinion that the PCIT was not justified in invoking the jurisdiction u/s 263 of the I.T. Act. In this view of the matter, we set aside the order of the PCIT and the grounds raised by the assessee are allowed. 26. In the result, appeal filed by the assessee is allowed. Order pronounced in the Open Court on 31st January, 2023. ============= Document 1 13.01 Further, a letter confirming the stamp duty & other charges was asked from the SRO Rangareddy RO. The amount tabulated above matched with the letter given by the SRO office too. The copy of the SRO letter is pasted below for the reference purpose. From GOVERNMENT OF TELANGANA REGISTRATION....