Vijaya Bhavani Constructions Pvt.Ltd., Hyd, Hyderabad v. DCIT, Circle 3(3), Hyderabad, Hyderabad

ITA 1312/HYD/2015 | 2008-2009
Pronouncement Date: 28-10-2016

Appeal Details

RSA Number 131222514 RSA 2015
Assessee PAN AABCV6770A
Bench Hyderabad
Appeal Number ITA 1312/HYD/2015
Duration Of Justice 11 month(s) 9 day(s)
Appellant Vijaya Bhavani Constructions Pvt.Ltd., Hyd, Hyderabad
Respondent DCIT, Circle 3(3), Hyderabad, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 28-10-2016
Appeal Filed By Assessee
Bench Allotted A
Tribunal Order Date 28-10-2016
Date Of Final Hearing 24-10-2016
Next Hearing Date 24-10-2016
Assessment Year 2008-2009
Appeal Filed On 19-11-2015
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A HYDERABAD BEFORE SHRI D. MANMOHAN VICE PRESIDENT AND SHRI B. RAMAKOTAIAH ACCOUNTANT MEMBER ITA NO. ASST. YEAR APPELLANT RESPONDENT 660/HYD/2015 2006 - 07 THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-17(2) HYDERABAD M/S. VIJAYA BHAVANI CONSTRUCTIONS PVT. LTD. HYDERABAD [PAN: AABCV6770A] 661/HYD/2015 2007 - 08 662/HYD/2015 2008 - 09 1310/HYD/2015 2006 - 07 M/S. VIJAYA BHAVANI CONSTRUCTIONS PVT. LTD. HYDERABAD [PAN: AABCV6770A] THE DEPUT Y COMMISSIONER OF INCOME TAX CIRCLE-3(3) HYDERABAD 1311/HYD/2015 2007 - 08 1312/HYD/2015 2008 - 09 FOR ASSESSEE : SHRI P. MURALI MOHAN RAO AR FOR REVENUE : SHRI A. SITARAMA RAO DR DATE OF HEARING : 26-10-2016 DATE OF PRONOUNCEMENT : 28-10-2016 O R D E R PER B. RAMAKOTAIAH A.M. : THESE ARE CROSS-APPEALS BY REVENUE AND ASSESSEE FOR AYS. 2006-07 2007-08 & 2008-09 AGAINST THE ORDERS OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-5 HYDERAB AD ALL DATED 13-01-2015. REVENUE IS AGGRIEVED ON THE FINDINGS OF THE CIT(A) THAT REOPENING OF ASSESSMENT AND ISSUANCE OF NOTICES U/ S. 148 OF THE INCOME TAX ACT [ACT] ARE BAD IN LAW. ASSESSEE IS AGGRIEVED THAT THE CIT(A) HAS NOT ADJUDICATED IT ON MERITS. M/S. VIJAYA BHAVANI CONSTRUCTIONS PVT. LTD. :- 2 -: 2. BRIEFLY STATED ASSESSEE IS ENGAGED IN THE BUSINES S OF CIVIL WORK. THE RETURN OF INCOME FOR AY. 2006-07 DE CLARING AN INCOME OF RS. 1 79 19 320/- WAS ASSESSED U/S. 143(3 ) ON 31-12- 2008 AND ASSESSING OFFICER (AO) AFTER DISALLOWING C ERTAIN EXPENDITURE DETERMINED THE TOTAL INCOME AT RS. 1 85 25 312/-. THE RETURN FOR AY. 2007-08 DECLARING INCOME OF RS. 2 02 37 290/- WAS PROCESSED U/S. 143(1) ON 02-03-2009. THE RETURN FOR AY. 2008-09 DECLARING A LOSS OF RS. 25 44 740/- WAS SEL ECTED FOR SCRUTINY AND ASSESSMENT U/S. 143(3) WAS COMPLETED O N 20-12- 2010 BY DETERMINING THE LOSS AT RS. 10 51 909/- AFTE R ESTIMATING THE INCOME AT 9% OF THE GROSS RECEIPTS AND ALLOWING THE DEPRECIATION. CONSEQUENT TO THE INFORMATION RECEIVED FR OM ADIT UNIT-I VIDE LETTER DT. 05-03-2013 ADDL. CIT RANGE- 3 PASSED ON THE INFORMATION TO THE AO THAT IN THE POST SEARCH ENQUIRIES IN THE CASE OF M/S. KNR CONSTRUCTIONS ASSESSEE WAS FOUND TO HAVE RECEIVED SUBSTANTIAL AMOUNTS FROM THE SAID COMPANY AS SUB-CONTRA CTOR AND FROM THE BANK ACCOUNT IN AXIS BANK GREEN LANDS BRANC H IT WAS SEEN THAT ASSESSEE MADE HUGE CASH WITHDRAWALS IMMEDIA TELY AFTER EVERY CHEQUE WAS RECEIVED FROM M/S. KNR CONSTRUCTIONS . ASSESSEES EXPLANATION DURING THE ENQUIRY FOR CASH WI THDRAWALS WAS IT SEEMS THAT THESE ARE FOR CASH PAYMENTS AT VARIO US SITES. A DOUBT WAS RAISED AS TO HOW WHEN PAYABLE ON PAR CHEQUE FACILITY IS BEING PROVIDED TO VARIOUS REGIONS BY BANKS THERE IS NECESSITY FOR WITHDRAWING CASH AT HYDERABAD TO SENT TO VARIOUS PLACES LIKE KONA SEEMA ORISSA AND VARANASI ETC. BASED ON THAT INFORMA TION THE AO RECORDED REASONS THAT INCOME HAS ESCAPED ASSESSMEN T AND GOT THE APPROVALS AND ISSUED NOTICES TO ASSESSEE ON 18-03- 2013. ASSESSEE VIDE LETTER DT. 25-03-2013 REQUESTED FOR REA SONS FOR REOPENING THE ASSESSMENTS. VIDE LETTER DT. 16-12-2013 ASSESSEES M/S. VIJAYA BHAVANI CONSTRUCTIONS PVT. LTD. :- 3 -: OBJECTIONS DT. 23-08-2013 FOR REOPENING THE ASSESSMENTS WERE SEEMS TO HAVE BEEN DISPOSED-OFF BY AO. IN THE ORDER U/S. 143(3) R.W.S. 147 FOR AY. 2006-07 THE AO NOTICED THAT ASSESSE E HAS WITHDRAWN RS. 25 LAKHS ON 31-05-2005 WHICH WAS RECE IVED FROM M/S PROGRESSIVE CONSTRUCTIONS AND ANOTHER RS. 5 LAKHS ON 24-03- 2006 RECEIVED FROM M/S GEM INFRASTRUCTURE. IN THE AB SENCE OF SATISFACTORY EXPLANATION FROM ASSESSEE AND ON NOTICING THAT THE CASH WAS SEEMS TO HAVE BEEN TRANSPORTED BY CAR AND TRA IN NUMBER OF TIMES IN A SHORT PERIOD AND ANALYSING THOSE TRANSAC TIONS IN THE ASSESSMENT ORDER AO ULTIMATELY HAS HELD THAT AMOUNT OF RS. 30 LAKHS WAS TO BE DISALLOWED IN THE ABSENCE OF ANY BI LLS VOUCHERS TICKETS AND TOLL PASSES ETC. ACCORDINGLY HE ADDED TH E AMOUNT OF RS. 30 LAKHS TO THE INCOME ASSESSED ORIGINALLY U/S. 1 43(3). 2.1. FOR AY. 2007-08 THE AMOUNT OF MONEY WITHDRAWN B Y ASSESSEE WAS DETERMINED AT RS. 1 82 26 304/- ON THE SAME LINES AS ANALYSED IN AY. 2006-07 ABOUT THE DISTANCES NUMBER OF TRIPS SUPPOSED TO HAVE BEEN MADE BY ASSESSEE FOR TRANSPORTIN G THE CASH AND ALSO ON THE FACTS THAT ASSESSEE HAD SEPARATE BAN K ACCOUNT IN THOSE AREAS. AO DISALLOWED THE AMOUNT AT RS. 1 82 26 3 04/- FOR THE SAME REASONS AS WAS SHOWN IN AY. 2006-07. IN TH IS YEAR ALSO AO LISTED THE DEPOSITS AND WITHDRAWALS IN PARA 2.1 OF T HE ORDER AND THE RECEIPTS ARE MAINLY FROM M/S RATNA CONSTRUCTIONS A ND ONE AMOUNT FROM M/S NANDI MINING COMPANY TO AN EXTENT OF R S. 19.90 LAKHS. 2.2. FOR AY. 2008-09 AO ALSO LISTED OUT THE WITHDRAWA LS IN PARA 2.1 TO AN EXTENT OF RS. 1 37 40 000/-. AS SEEN FROM THE DETAILS THE FIRST AMOUNTS OF RS. 50 LAKHS WAS FROM M/ S RATNA M/S. VIJAYA BHAVANI CONSTRUCTIONS PVT. LTD. :- 4 -: CONSTRUCTIONS AND BALANCE OF THE AMOUNTS TAKEN BY THE AO SEEMS TO BE FROM ASSESSEES OWN FUNDS TRANSFERRED FROM ANOT HER ACCOUNT AND ALSO CLEARING THE SOURCE OF WHICH IS NOT STATED IN THE ORDER. HOWEVER AO HAS NOT MADE THE ADDITION OF THE ABOVE AMO UNT AS WAS DONE IN EARLIER TWO YEARS BUT RESORTED TO ESTIMATIO N OF INCOME ON SUB-CONTRACT RECEIPTS AT 20% AS THE ORIGINAL ASSESSM ENT WAS COMPLETED ESTIMATING INCOME AT 9%. THUS IN ALL THE TH REE YEARS THERE IS REOPENING OF ASSESSMENT AS WELL AS ADDITION O F THE SO CALLED CASH WITHDRAWALS WHICH ARE SUPPOSED TO HAVE BEEN USED FOR VARIOUS EXPENDITURES WHICH WAS DISBELIEVED. 3. BEFORE THE LD.CIT(A) ASSESSEE HAS CONTESTED THE REOPENING OF ASSESSMENTS AS WELL AS ADDITIONS MADE B Y THE AO ON MERITS. ON REOPENING OF THE ASSESSMENTS IT WAS THE CO NTENTION THAT IN TWO ASSESSMENT YEARS I.E. 2006-07 & 2008-09 AO HAS SCRUTINISED THE RETURNS CALLED FOR BOOKS OF ACCOUNT AND REJECTED THE BOOKS OF ACCOUNT THEREBY MAKING DISALLOWANCE IN A Y. 2006-07 AND ESTIMATING THE INCOME IN 2008-09. IN AY. 2007-08 EVEN THOUGH THERE WAS NO SCRUTINY THE INCOME RETURNED BY AS SESSEE WAS ACCEPTED AND HAS BECOME FINAL. IT WAS ALSO CONT ENDED THAT THERE IS NO TANGIBLE MATERIAL OR THE INFORMATION RECEIV ED FOR REOPENING OF THE ASSESSMENT THERE IS NO SATISFACTION R ECORDED BY THE AO THAT INCOME HAS ESCAPED ASSESSMENT AND MERE DISALLOWANCE OF EXPENDITURE STATED TO HAVE BEEN INCUR RED IN CASH BY WITHDRAWING MONEY FROM ASSESSEES BANK ACCOUNT IS NOTHING BUT CHANGE OF OPINION WHICH WAS NOT PERMITTED BY LAW FO R REOPENING THE COMPLETED ASSESSMENTS. ASSESSEE ALSO R AISED AN ISSUE IN AY. 2007-08 THAT AO HAS NOT TAKEN APPROVAL FRO M THE ADDL. COMMISSIONER IN THAT ASSESSMENT YEAR. M/S. VIJAYA BHAVANI CONSTRUCTIONS PVT. LTD. :- 5 -: 3.1. LD.CIT(A) AFTER CONSIDERING THE CONTENTIONS OF AS SESSEE EXAMINING THE RECORDS AND THE CASE LAW ON THE ISSUE HAS CONSIDERED THAT THERE IS NO TANGIBLE MATERIAL TO COME TO THE CONCLUSION THAT THERE IS ESCAPEMENT OF INCOME. SINCE TH E RETURNS WERE SCRUTINISED BY THE AO IN TWO ASSESSMENT YEARS I. E. 2006-07 & 2008-09 ANY FURTHER DISALLOWANCE OF EXPENDITURE ON THE BASIS OF THE SAME BOOKS OF ACCOUNT WOULD TANTAMOUNT TO CHANGE OF OPINION. FOR AY. 2007-08 CIT(A) ALSO GAVE FINDING THAT ON PE RUSAL OF THE ASSESSMENT RECORD THERE SEEMS TO BE NO APPROVAL FROM THE ADDL. COMMISSIONER AS REQUIRED UNDER THE PROVISIONS. BY ELABORATELY DISCUSSING THE FACTS OF THE CASE AND THE CASE LAW ON TH E SUBJECT PARTICULARLY THE DECISION OF THE HON'BLE SUPREME COU RT IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD. (187 TAXMAN 312) AND CO- ORDINATE BENCH DECISION IN THE CASE OF DCIT VS. ANDH RA PRADESH MINERAL DEVELOPMENT CORPORATION LTD. HYDERABAD IN ITA NO. 419/HYD/2013 LD.CIT(A) CAME TO THE CONCLUSION THAT REOPENING OF THE ASSESSMENT AND ISSUING A NOTICE U/S. 148 IN THE CASE OF ASSESSEE FOR THE YEARS UNDER REFERENCE ARE HELD TO BE NOT IN ORDER AND AS SUCH ARE NOT SUSTAINABLE RENDERING THE RE-ASSES SMENT PROCEEDINGS AS INVALID. ON THESE LINES THE GROUN DS OF ASSESSEE ON REOPENING OF THE ASSESSMENT ARE ALLOWED AND OTHER GROU NDS OF APPEAL ARE TREATED AS INFRUCTUOUS. REVENUE IS AGGR IEVED MAINLY ON CANCELLING THE REOPENING OF THE ASSESSMENTS WHERE AS ASSESSEE FILED CROSS-APPEALS IN SUPPORT OF THE ORDER OF THE CI T(A) AND ALSO WITHOUT PREJUDICE FOR THE DECISION ON THE MERITS OF THE ADDITIONS MADE BY THE AO. 4. LD. DR HAS PLACED ON RECORD DEPARTMENTAL PAPER BOOK IN WHICH FOR EACH OF THE ASSESSMENT YEARS COPIES OF THE PROPOSALS M/S. VIJAYA BHAVANI CONSTRUCTIONS PVT. LTD. :- 6 -: OF THE AO DT. 18-03-2013 THE COMMUNICATION OF THE APPRO VAL OF CIT FOR AY. 2006-07 AND BY ADDL. CIT FOR AY. 2007-0 8 AND 2008-09 ALONG WITH THE ORDER SHEET CONTAINING AOS SATISFACTIO N FOR REOPENING THE ASSESSMENTS AND ISSUANCE OF NOTICE U/S. 148 WERE PLACED. EVEN THOUGH LD. DR COULD NOT PLACE THE COMMUNI CATION RECEIVED FROM THE ADDL. DIT UNIT-1 CONNECTING THE FI NDINGS FOR WITHDRAWAL OF CASH AS A SUB-CONTRACTOR OF M/S. KNR C ONSTRUCTIONS IN THE SEARCH PROCEEDINGS OF THAT CASE IT WAS HIS SU BMISSION REFERRING TO THE REASONS RECORDED THAT AO HAS TANGIBL E MATERIAL IN THE FORM OF INFORMATION FROM THE ADDL. DIT THAT CASH WIT HDRAWALS ARE SUSPICIOUS AND ASSESSEES EXPENDITURE CLAIM OUT OF THE CASH WITHDRAWALS ARE BOGUS. LD. DR ALSO REFERRED TO THE A PPROVALS GIVEN BY THE LD.CIT FOR SECOND APPEAL. IT WAS THE LD. DRS SUBMISSION THAT THERE WAS TANGIBLE MATERIAL TO REOPEN THE ASSESSMEN TS AND REFERRED TO VARIOUS ORDERS IN RESPECTIVE ASSESSMENT YE ARS TO SUBMIT THAT ASSESSEE DID NOT FURNISH ANY VALID EXPLANATION FO R WITHDRAWAL OF CASH AND ALSO FOR DRAWING MONEY IN HYDERABAD FOR SPENDING AT VARIOUS PLACES. HE ALSO REFERRED TO THE FINDINGS OF THE AO THAT IN A SHORT PERIOD CASH WAS TRANSPORTED NUMBER OF TIMES WHIC H WAS LISTED BY THE AO IN THE ASSESSMENT ORDER AND FOR THE R EASONS STATED THEREIN THE DISALLOWANCE OF EXPENDITURE IS VALID. IT WAS ALSO HIS SUBMISSION THAT THERE WAS NO ASSESSMENT U/S. 143(3) IN AY. 2007- 08. WITH REFERENCE TO THE FINDINGS OF THE CIT(A) THAT TH ERE IS NO INFORMATION AVAILABLE ON ASSESSMENT RECORD OF APPROV AL TAKEN BY ADDL. CIT IT WAS SUBMITTED THAT THE SAID INFORMATION IS NOW PLACED ON RECORD AND ALSO IN THE PAPER BOOK AND AS CAN BE S EEN FROM THE PROPOSAL SENT BY THE AO AND APPROVAL GIVEN BY THE ADD L. CIT THESE ARE SIMILAR TO THE PROPOSALS IN AY. 2008-09. THEREFO RE IT WAS SUBMITTED THAT IT CAN BE PRESUMED THERE IS A VALID APPROV AL BY THE M/S. VIJAYA BHAVANI CONSTRUCTIONS PVT. LTD. :- 7 -: ADDL. CIT. ON A QUERY WHETHER THERE IS ANY ORIGINAL RECORD OF THE APPROVAL AS ONLY PHOTO COPY WAS PLACED ON RECORD I T WAS SUBMITTED THAT ORIGINAL WAS AVAILABLE IN AY. 2008-09 W HEREAS ONLY PHOTO COPY WAS AVAILABLE AS OF NOW IN THE ASSESSMENT R ECORD OF AY. 2007-08 BUT SINCE THE PROPOSALS ARE SIMILAR AND APP ROVALS ARE ALSO SIMILAR BY THE SAME OFFICER IT CAN BE PRESUMED THAT THERE IS APPROVAL BY THE ADDL. CIT AND THE FINDINGS OF LD.CIT( A) IS NOT CORRECT. 5. IN REPLY LD. COUNSEL HOWEVER SUBMITTED THAT BASIS FOR REOPENING IS NOT CORRECT. IT WAS SUBMITTED THAT ASSESSEE WAS A SUB-CONTRACTOR OF M/S. KNR CONSTRUCTIONS ONLY IN THE YEAR 2010- 11 RELEVANT FOR AY. 2011-12 AND THE FINDINGS/OBSERVATI ONS OF THE INVESTIGATION UNIT THE COPY OF WHICH IS NOT PLACED ON R ECORD DID NOT PERTAIN TO THE IMPUGNED ASSESSMENT YEARS. THEN HE REFERRED TO THE REASONS RECORDED BY THE AO AND REFERENCE MADE TO CASH WITHDRAWALS AFTER RECEIVING MONEY FROM M/S. KNR CONS TRUCTIONS WHICH AROSE A SUSPICION/DOUBT IN THE MIND OF THE AO TH AT THE CONSEQUENT EXPENDITURE COULD BE BOGUS. IT WAS THE CON TENTION THAT IN THE IMPUGNED ASSESSMENT YEARS NO AMOUNTS WERE RECE IVED FROM M/S. KNR CONSTRUCTIONS SO THE SUSPICION RAISED BY THE AO IS NOT CORRECT. IT HAS NO NEXUS WITH ASSESSEES BUSINESS TRAN SACTIONS DURING THE IMPUGNED ASSESSMENT YEARS. IT WAS FURTHER SUBMITTED THAT A MERE SUSPICION/DOUBT CANNOT BE EQUATED TO REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. (INDIAN OI L CORPORATION VS. ITO (26 TAXMAN 336)]. IT WAS ALSO SU BMITTED THAT THERE IS NO NEXUS BETWEEN THE REASONS RECORDED I.E. WITHDRAWALS OF CASH FROM RECEIPTS OF M/S. KNR CONSTRUCTIONS AND ADDITION MADE DISALLOWANCE OF EXPENDITURE PURPORTED TO BE SPENT FROM THE CASH M/S. VIJAYA BHAVANI CONSTRUCTIONS PVT. LTD. :- 8 -: WITHDRAWALS. SINCE THERE IS NO NEXUS BETWEEN THE R EASONS RECORDED AND ADDITION MADE THE PRINCIPLES LAID DOWN B Y THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF JET AIRWAYS ( I) LTD. [331 ITR 236] WILL EQUALLY APPLY. IT IS ALSO CONTENDED THAT THERE IS NO APPLICATION OF MIND BY THE AO WHILE RECORDING REAS ONS AS CAN BE SEEN FROM THE NOTING ITSELF. HE SUPPORTED THE ORDERS O F LD.CIT(A) THAT THERE IS NO TANGIBLE MATERIAL TO COME TO A CONCLUSI ON THAT THERE IS ESCAPEMENT OF INCOME AND IT IS MERE A CHANGE OF OPINION AS THE ASSESSMENTS HAVE BEEN ORIGINALLY COMPLETED. 5.1. WITH REFERENCE TO THE EVIDENCE PLACED ON RECORD IN THE FORM OF PHOTO COPY OF THE APPROVAL GRANTED BY THE ADDL .CIT LD. COUNSEL VEHEMENTLY OBJECTED THAT THE ORIGINAL OF THE APPROVAL IS NOT PLACED ON RECORD AND THEREFORE THE FINDINGS OF C IT(A) THAT THERE IS NO APPROVAL FOR AY. 2007-08 HAS NOT BEEN CONTROVER TED. HE DOUBTED THE PHOTO COPY PLACED ON RECORD. IT WAS FURTHE R SUBMITTED THAT AO HAS MERELY DOUBTED THE TRANSPORTATION OF CASH BU T NOT THE EXPENDITURE OF ASSESSEE WHICH WAS EXAMINED IN THE O RIGINAL SCRUTINY ASSESSMENT AND THEREFORE THE ADDITIONS CANNO T BE MADE ON MERE SUSPICION. HE SUPPORTED THE ORDERS OF LD.CIT (A). 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUS ED THE DOCUMENTS PLACED ON RECORD INCLUDING THE CASE LAW RELIED UPON BY THE PARTIES. AS FAR AS REOPENING OF ASSESSMENTS AR E CONCERNED AS RIGHTLY POINTED OUT BY THE LD. COUNSEL THE STARTING P OINT FOR ENQUIRY IS THE SO CALLED WITHDRAWALS FROM BANK BY WAY OF CASH WITHDRAWALS OUT OF THE CHEQUES RECEIVED FROM M/S. KN R CONSTRUCTIONS IDENTIFIED IN THE COURSE OF SEARCH OF M/S. KNR CONSTRUCTIONS. THE FINDINGS OF THE INVESTINGATION UNIT AND THE M/S. VIJAYA BHAVANI CONSTRUCTIONS PVT. LTD. :- 9 -: STATEMENTS OF ASSESSEE DURING THE ENQUIRY AND THE COMMUN ICATION RELIED ON BY THE AO FOR REOPENING THE ASSESSMENT WERE NOT PLACED ON RECORD. HOWEVER AS SEEN FROM THE REASONS RECORD ED IT IS THE DOUBT EXPRESSED BY THE INVESTIGATION UNIT THAT HEAVY WITHD RAWALS FROM THAT ACCOUNT COULD BE FOR NON-BUSINESS PURPOSES. HOWEVER AS RIGHTLY POINTED OUT BY THE LD. COUNSEL IN NONE OF TH E IMPUGNED ASSESSMENT YEARS THERE ARE RECEIPT OF CHEQUES FROM M /S. KNR CONSTRUCTIONS AS SUB-CONTRACT WITH THAT COMPANY HAS STARTED ONLY IN FY. 2010-11 RELEVANT FOR AY. 2011-12. THEREFORE THE VERY BASIS FOR COMING TO A CONCLUSION THAT INCOME HAS ESCAPED A SSESSMENT IS NOT PROPER. 6.1. MOREOVER AS SEEN FROM THE REASONS RECORDED O NLY A DOUBT WAS EXPRESSED BY THE AUTHORITIES WHICH HAS LEAD T O REOPENING OF ASSESSMENT. A MERE REASON TO SUSPECT CAN NOT BE EQUATED TO REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. THIS PRINCIPLE WAS UPHELD BY THE HON'BLE SUPREME COU RT IN THE CASE OF INDIAN OIL CORPORATION VS. ITO (26 TAXMAN 33 6). EVEN THOUGH LD. DR VEHEMENTLY ARGUED THAT THERE IS TANGIBLE M ATERIAL FOR REOPENING THE ASSESSMENT AS SEEN FROM THE REASON S RECORDED THE ENQUIRY DURING THE ASSESSMENT AND THE ADDITION MADE DO INDICATE THAT THERE IS NO NEXUS BETWEEN THE COMMUNICATIO N RECEIVED FROM THE INVESTIGATION UNIT AND THE DISALLOWANC E OF EXPENDITURE ON THE BASIS OF THE SO CALLED COMMUNICATION . 6.2. AS RIGHTLY POINTED OUT BY THE LD.CIT(A) WHAT TH E AO HAS DONE IN THE RE-ASSESSMENT PROCEEDINGS IS ONLY TO EXAMINE THE SAME BOOKS OF ACCOUNT WHICH WAS EXAMINED IN THE ORIG INAL ASSESSMENTS IN AY. 2006-07 AND 2008-09. EVEN THOUGH THERE WAS M/S. VIJAYA BHAVANI CONSTRUCTIONS PVT. LTD. :- 10 -: NO SCRUTINY PROCEEDINGS FOR AY. 2007-08 THE FACT THAT THOSE WITHDRAWALS ARE RECORDED IN THE BOOKS OF ACCOUNT AND HAS BEEN SPENT FOR THE PURPOSE OF SUB-CONTRACT WORK HAS NOT BEEN DISTURBED BY THE AO. AS SEEN FROM THE ORDERS IT WAS MERE SUSPICI ON OF THE SO CALLED TRANSPORTATION OF CASH. THERE WAS NO EXAMINATIO N FOR WHAT PURPOSE THE CASH WAS SPENT. THERE IS NO FINDING ON THA T IN ANY OF THESE IMPUGNED ORDERS. THE MERE SUSPICION THAT ASSESS EE MIGHT NOT HAVE UTILISED CASH WITHDRAWALS FOR THE PURPOSE OF B USINESS OF THE ADDITION OF AMOUNT EQUIVALENT TO THE CASH WITHDRAWALS WAS MADE. IN FACT AS SEEN FROM THE ORDERS NONE OF THE E XPENDITURE WAS LISTED OUT OF WHICH THESE CASH WITHDRAWALS WERE SUPPOSED TO HAVE BEEN SPENT. EVEN AS SEEN FROM THE ORDERS AO TAB ULATES FOR EXAMPLE IN AY. 2006-07 THAT ASSESSEE HAS TRANSPORTED CA SH 43 TIMES IN A SPAN OF 05-06-2005 TO 30-06-2005 BY WAY O F CASH TO A DISTANCE OF 433 KMS EACH TIME TO KONA SEEMA. ON WHAT BASIS THE AO COULD COME TO THIS ANALYSIS IS NOT PLACED ON RECOR D BUT SIMPLY IT IS IMPOSSIBLE THAT IN A SPAN OF 25 DAYS A PERSON W ILL TRAVEL 43 TIMES A DISTANCE OF 433 KMS EACH FOR SPENDING MONEY TH ERE. EITHER THE CALCULATION OF NUMBER OF TIMES IS WRONG OR THE PAYMENT OF CASH IN EACH DAY WOULD HAVE BEEN CONSIDERED AS THE PERSON HAS TRANSPORTED CASH FROM HYDERABAD TO THAT PLACE ON EVERY O CCASION. AO DID NOT EVEN VERIFY THE CASH BOOK AND WHETHER CASH WAS TAKEN IN LUMP-SUM ON ONE DAY TO THAT PLACE AND SPENT REGULAR LY THERE AND ACCOUNTED IN THE HEADQUARTERS BOOKS OR IT IS EVERY DAYS CASH EXPENDITURE AT KONA SEEMA RECORDED IN THE MAIN CASH BO OK IN HYDERABAD. THERE IS NO ANALYSIS AT ALL. LIKE-WISE AO GIVES A FINDING THAT ASSESSEE HAS TRANSPORTED CASH BETWEEN 24- 03-2006 TO 31-03-2006 BY WAY OF TRAIN TO VARANASI TWICE IN THA T PERIOD WHICH IS ALSO SEEMS ILLOGICAL AND ON WHAT BASIS AO G AVE THESE M/S. VIJAYA BHAVANI CONSTRUCTIONS PVT. LTD. :- 11 -: FINDINGS IS NOT AVAILABLE ON RECORD. LD. COUNSEL HOW EVER CLARIFIED THAT EACH OF THE CASH PAYMENT ENTERED IN THE CASH BOOK W AS CONSIDERED AS ONE TRIP. 6.3. CONSIDERING THESE FACTS WE ARE SATISFIED THAT THER E IS NO TANGIBLE MATERIAL TO REOPEN THE ASSESSMENT AND ALSO THE RE IS NO LIVE NEXUS WITH THE ADDITION MADE TO THE REASONS RECORDED FOR REOPENING. THE ASSESSMENT HAS BEEN COMPLETED UNDER S CRUTINY IN TWO YEARS AND ON THE VERY BASIS OF THE SAME BOOKS OF ACCOUNT SUBJECTED TO SCRUTINY AO HAS COME TO A DIFFERENT OPIN ION. THIS WILL CLEARLY COME WITHIN THE SCOPE OF CHANGE OF OPINION. IN FACT FOR AY. 2006-07 SINCE THE ASSESSMENT WAS REOPENED AFTER FOUR YEARS THERE IS NO FINDING THAT ASSESSEE HAS NOT FURNISHED FUL L AND COMPLETE DETAILS AT THE TIME OF ASSESSMENT SO AS TO RE OPEN THE SAME U/S. 147. PROVISO TO SECTION 147 WILL CLEARLY APPLY TO THIS ASSESSMENT YEAR. EVEN THOUGH NO SCRUTINY WAS COMPLETE D FOR AY. 2007-08 THE REASONING GIVEN BY THE LD.CIT(A) THAT TH ERE IS NO TANGIBLE MATERIAL TO REOPEN THE ASSESSMENT IS TO BE UPH ELD. AS FAR AS AY. 2008-09 IS CONCERNED EVEN THOUGH THE REASONS RECORDED ARE FOR EXAMINING THE CASH WITHDRAWALS AO ULTIMATELY H AS RESORTED TO ESTIMATION OF INCOME AT A HIGHER RATE WHEN ASSESSEE S BOOKS OF ACCOUNT WERE ORIGINALLY REJECTED AND INCOME WAS ESTIM ATED AT 9% ON GROSS RECEIPTS. CONSIDERING THESE FACTS AND THE P RINCIPLES OF LAW RELIED UPON BY THE LD.CIT(A) AND PARTIES BEFORE US WE UPHOLD THE ORDERS OF THE LD.CIT(A). THERE IS NO MERIT IN REVENU ES GROUNDS. ACCORDINGLY ALL THE APPEALS OF REVENUE ARE DISMISSE D. 7. SINCE REVENUE APPEALS ARE DISMISSED ALTERNATE GROUNDS RAISED BY ASSESSEE WITH REFERENCE TO VARIOUS ADDITIONS M/S. VIJAYA BHAVANI CONSTRUCTIONS PVT. LTD. :- 12 -: MADE BECOMES INFRUCTUOUS. THEREFORE UPHOLDING THE FINDINGS OF THE CIT(A) ON THIS ISSUE AS WELL WE CONSIDER ASSESSE ES APPEALS AS ACADEMIC IN NATURE. CONSEQUENTLY THESE ARE ALSO RE JECTED AS ACADEMIC. 8. TO SUM-UP ALL THE APPEALS OF REVENUE AND ASSESS EE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH OCTOBER 2016 SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMB ER HYDERABAD DATED 28 TH OCTOBER 2016 TNMM COPY TO : 1. M/S. VIJAYA BHAVANI CONSTRUCTIONS PVT. LTD. HYD ERABAD C/O. P. MURALI & CO. CHARTERED ACCOUNTANTS 6-3-65 5/2/3 1 ST FLOOR SOMAJIGUDA HYDERABAD. 2. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-3( 3) HYDERABAD. 3. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-17 (2) HYDERABAD. 4. CIT (APPEALS)-5 HYDERABAD. 5. CIT-5 HYDERABAD. 6. D.R. ITAT HYDERABAD. 7. GUARD FILE.