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Income Tax Appellate Tribunal, HYDERABAD BENCHES “B”, HYDERABAD
Before: SHRI RAMA KANTA PANDA & SHRI K.NARASIMHA CHARY
सुिवधई की तधरीख/Date of hearing: 06/03/2023 घोर्णध की तधरीख/Pronouncement on: 16/03/2023 आदेश / ORDER PER K. NARASIMHA CHARY, JM: Aggrieved by the order(s) passed by the learned Commissioner of Income Tax(Appeals)-12, Hyderabad (“Ld.CIT(A)”) in the case of M/s. Dream Land Ventures Private Limited (“the assessee”) for the assessment years 2009-10 to 2015-16, both the assessee and Revenue preferred these appeals. Facts involved for all these assessment years are similar and mostly the grounds of appeal
. We, therefore, deem it just and convenient to dispose of these appeals by way of this common order, taking the appeals for the assessment year 2009-10 in filed by the Revenue and the assessee respectively, as lead cases. For the assessment years 2009-10, 2010-11 & 2015-16 assessee preferred appeals with a delay stating that the Director of the assessee- company was in prison from February, 2016 and was released on 08/06/2018 and immediately after release he filed the appeals, but the delay occurred. As a matter of fact, learned DR fairly concedes to condone the delay. Recording the same, we condone the delay and proceed to hear the matter on merits.
2. There was a search and seizure operation in the case of the assessee on 23/01/2015 and pursuant thereto, after filing of the return of income by the assessee, learned Assessing Officer made an addition of Rs. 13,17,83,402/- on account of business income by estimating the same at Dream Land Ventures Pvt. Ltd., Batch appeals 15% of the gross receipts keeping in view the line of business of the assessee and also that there are certain deficiencies in making huge cash payments. Apart from this, learned Assessing Officer also made an addition to the tune of Rs. 2.45 crores under section 68 of the Income Tax Act, 1961 (for short “the Act”) by treating the share premium and the share capital received in cash as un-explained cash credits. Learned Assessing Officer also made an addition of Rs. 4,50,30,229/- under the head ‘income from other sources’.
3. Assessee preferred appeal before the learned CIT(A) and produced additional evidence under rule 46A of the Income Tax Rules, 1962 (‘the Rules’). Learned CIT(A) obtained remand report from the learned Assessing Officer. On an appraisal of the material before him and taking note of the fact that in the cases of the Agri Gold Group, estimation of profit was consistently made at 5%, learned CIT(A) directed the learned Assessing Officer to adopt the rate of 5% for estimation of net profit subject to the quantum of profits returned by the assessee. Learned CIT(A) sustained the addition made under section 68 of the Act in respect of the share application money and premium. Learned CIT(A), however, directed the learned Assessing Officer to treat the interest income as ‘income from business’.
4. Challenging the deletions directed by the learned CIT(A), Revenue and aggrieved by the additions to the extent they are sustained by the learned CIT(A), assessee preferred appeals.
5. At the outset, it is submitted on behalf of the assessee that at relevant time during the assessment proceedings, pursuant to the issuance of notice under section 153A of the Act and also during the first appellate proceedings, unfortunately, all the persons responsible for the affairs of the company were in judicial custody and, therefore, the assessee could not produce all the relevant books, vouchers etc., before the authorities to Dream Land Ventures Pvt. Ltd., Batch appeals prosecute the case diligently. Learned AR produced the copy of the certificate dated 26/02/2019 issued by the Superintendent, District Jail, Eluru and also the letter dated 24/11/2016 addressed by Shri A.V.Rama Rao, Chairman of the Agri Gold group to the DCIT, Hyderabad. He further submitted that given an opportunity, the assessee is ready to produce all the material before the learned Assessing Officer to prove their case and get the assessment done on merits. He submitted that precisely on this ground on earlier occasions, a Co-ordinate Bench of this Tribunal in the batch of cases concerning the group concerns restored the file to the learned Assessing Officer for fresh adjudication, after affording opportunity to the assessee to produce all the material at their custody. He produced the copy of the order dated 29/11/2022 in and batch in the case of DCIT vs. Agri Gold Constructions P. Ltd., and the same forms part of record.
6. Per contra, learned DR submitted that the assessee produced additional evidence before the learned CIT(A) under rule 46A of the Rules, learned CIT(A) considered the same to obtain the remand report, such material was considered by the learned Assessing Officer to submit the remand report and basing on it, learned CIT(A) took a plausible view. He, therefore, submitted that the assessee had sufficient opportunity before the authorities below. Learned DR, however, fairly conceded that in various batches of cases involving the group concerns of Agri Gold group, the Co- ordinate Benches of the Tribunal took the view that it would be in the interest of justice, to restore the issue to the file of learned Assessing Officer with a direction to adjudicate the same afresh, after giving due opportunity of being heard to the assessee.
We have gone through the record in the light of the submissions made on either side. It could be seen from the order dated 29/11/2022 in the batch cases of Agri Gold Constructions P. Ltd., and order dated
Dream Land Ventures Pvt. Ltd., Batch appeals 30/01/2023 in the batch of case of Agri Gold Projects Ltd., the facts are identical and the Co-ordinate Bench of this Tribunal took the view to set aside the impugned orders and to restore the issue to the file of the learned Assessing Officer for giving an opportunity to the assessee to dispose of the matters according to law. It is clear from the certificate dated 26/02/2019 issued by the Superintendent, District Jail, Eluru and also the letter dated 24/11/2016 addressed by Shri A.V.Rama Rao, Chairman of the Agri Gold group to the DCIT, Hyderabad that the Chairman, Vice Chairman, Managing Directors and others were in custody between the period 12/02/2006 and 23/10/2018 and lodged in District Jail, Eluru.
This material clearly establishes that from 12/02/2016 to 23/10/2018 all the persons responsible for the affairs of the company were in custody and in their absence, as claimed by the learned AR, some part of the material was produced before the authorities. There is nothing contrary to disbelieve the statement of the learned AR that the assessee could not prosecute the proceedings before the authorities diligently due to the fact of non-availability of the persons responsible for the affairs of the company. In fact, this peculiar circumstance is taken note by the Co-ordinate Benches of this Tribunal in the cases of the group concerns on earlier occasions as is evidenced by the order dated 29/11/2022 and 30/01/2023 (supra).
Having regard to the peculiarity of the facts, we are of the considered opinion that it would be in the interest of justice to set aside the impugned orders and to restore the matters to the file of the learned Assessing Officer to adjudicate the same afresh, after giving an opportunity of being heard to the assessee and also to produce all the relevant material at their custody. We hold and direct accordingly. The grounds of appeals of both the assessee and the Revenue for the assessment year 2009-10 are accordingly treated as allowed for statistical purpose.
Dream Land Ventures Pvt. Ltd., Batch appeals Assessment Years: 2010-11, 2011-12, 2012-13, 2013-14, 2014-15 & 2015-16
Since the facts of the remaining assessment years are identical to the facts as decided by us in 1220/Hyd/2018 (supra) for the assessment year 2009-10, our findings in the said appeals, mutatis mutandis, would apply to these appeals as well. For the assessment years 2012-13 & 2013-14, Revenue alone is in appeals challenging the direction of the learned CIT(A) to adopt the rate of 5% for estimation of the business income and to treat the interest income as ‘income from business’, and these two issues stand covered for the assessment year 2009-10 in the earlier paragraphs. Hence, all these appeals of assessee and Revenue are also treated as allowed for statistical purposes.
Order pronounced in the open court on this the 16th day of March, 2023.