DEPUTY COMMISSIONER OF INOCME TAX, CENTRAL CIRCLE-2(4), HYDERABAD vs. M/S AGRI GOLD PROJECTS LIMITED, VIJAYAWADA

2. There was a search and seizure operation in the case of the assessee on 23/1/2015 and pursuant thereto, after filing of the return of income by the assessee, learned Assessing Officer made an addition of Rs. 1,15,83,456/- on account of business income by estimating the same at 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. 65.13 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 unexplained cash credits. Learned Assessing Officer also made an addition of Rs. 1,33,73,892/- under the head ‘income from other sources’ by treating the amount credited towards the sale of Carbon Emission Reductions (CERs).

Challenging the deletions directed by the learned CIT(A), Revenue preferred CIT(A), assessee is in appeal in ITA No. 2001/Hyd/2017.

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 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 ITA No.

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., 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

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.

Since the facts of the remaining assessment years are identical to the facts as decided by us in 2001/Hyd/2017 (supra) for the assessment year 2009-10, our findings in the said appeals, mutatis mutandis, would apply to these appeals as well. Hence, these appeal of assessee and Revenue are also treated as allowed for statistical purposes.

To sum up, all the appeals of assessee and Revenue are treated as allowed for statistical purposes.