ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-2(1), HYDERABAD vs. RADHIKA REDDY ALTHURU, HYDERABAD

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ITA 724/HYD/2020Status: DisposedITAT Hyderabad22 November 2021AY 2011-1210 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the CIT(A) rightly quashed the reopening as there was no live nexus between the reasons recorded for reopening and the additions made. The assessee's cross objection was dismissed as infructuous.

What were the facts?

The Revenue appealed against the CIT(A)'s order quashing the reopening of assessment. The Assessing Officer had initially based the reopening on the assessee receiving funds from an entry operator, but the reassessment order made additions related to capital gains from share sales, which were not part of the original reasons.

What were the issues?

Whether the reopening of assessment was valid when the additions made were not based on the reasons recorded for reopening.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD ‘B’ BENCH, HYDERABAD.

Before: SHRI S.S. GODARA & SHRI L. P. SAHU

Heard together (2 matters)

ITA No.724/Hyd/2020
C.O. No.10/Hyd/2021

Read from the judgment's own cause title. This page is filed under one of them.

O R D E R Per Shri S.S. Godara, J.M. : This Revenue’s appeal C.O. No.10/Hyd/2021 for Asst. Year 2011-12 and C.O. arises from the Commissioner of Income Tax (Appeals)-12, Hyderabad’s order dt.17.09.2020 C.O. No.10/Hyd/2021 passed in case No.10346/2018-19 in proceedings under Section 143(3) r.w.s. 147 of Income Tax Act, 1961 (‘the Act’).

Heard both the parties. Case file perused.

2.

Coming to the Revenue’s sole substantive grievance that the CIT(A) has erred in law and on facts in quashing the reopening herein, we deem it appropriate to reproduce the corresponding lower appellate discussion to this effect reading as under :

“ 5.3 I have carefully considered the submissions of the appellant AR as well as the order of the Assessing Officer. The issues involved in this case re decided as under based on the assessment order of the Assessing Officer, the written submissions of the AR and the Assessing Officer, the arguments made by the AR, and the material available on record as under.

-- Space left intentionally -- the notice u/s.148 is quashed. Appellant succeeds on this issue. Ground Nos.1 to 8 are ALLOWED.”

C.O. No.10/Hyd/2021 3. Mr. Majumdar vehemently contended during the course of hearing that the CIT(A) has erred in law and on facts in quashing the impugned reopening despite the fact that it was a clear cut case of the assessee having received the sum in issue of Rs.3,29,84,070 from Kolkata based entry operator company(ies) only. We find no merit in the Revenue’s instant argument. It has already come on record that the Assessing Officer’s sole reopening reason reproduced in para 5.8 of the CIT(A) order had termed the assessee as a beneficiary of the funds received from M/s. Fly High Exports Pvt. Ltd. only. to the tune of Rs.3,29,84,070 whereas the impugned addition was never made thereupon during the course of reassessment framed on 24.12.2018. Case file rather suggests that the assessee’s stand from day one denied to have received any fund from M/s. Fly High Exports Pvt. Ltd. And that the Assessing Officer thereafter added the capital gains arising from sale of shares of M/s. Oasis Cine Communications Limited and from M/s. Blue Print Securities Limited which never C.O. No.10/Hyd/2021 formed part of the reopening reasons recorded. We conclude in the factual spectrum the CIT(A) has rightly quashed the reopening since not having live nexus between the corresponding reasons revoked and the addition made in above terms. We decline the Revenue’s instant sole substantive grievance for this precise reason alone therefore.

4. The assessee's cross objection C.O. No.10/Hyd/2021 filed in support of the CIT(A)’s order is rendered infructuous and dismissed in very terms therefore.

4.

This Revenue’s appeal and assessee's C.O. No.10/Hyd/2021 are dismissed in above terms. A copy of this common order be placed in the respective case files.

Order pronounced in the open court on 23rd Nov., 2021.

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