ACIT, Central Circle-3(2), Hyd., Hyderabad v. Hill County Properties Ltd (formerly known as Maytas Properties Ltd), Hyd, Hyderabad

ITA 286/HYD/2016 | 2007-2008
Pronouncement Date: 30-09-2016

Appeal Details

RSA Number 28622514 RSA 2016
Assessee PAN AAECM2732Q
Bench Hyderabad
Appeal Number ITA 286/HYD/2016
Duration Of Justice 6 month(s) 19 day(s)
Appellant ACIT, Central Circle-3(2), Hyd., Hyderabad
Respondent Hill County Properties Ltd (formerly known as Maytas Properties Ltd), Hyd, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2016
Appeal Filed By Department
Bench Allotted B
Tribunal Order Date 30-09-2016
Date Of Final Hearing 23-08-2016
Next Hearing Date 23-08-2016
Assessment Year 2007-2008
Appeal Filed On 11-03-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B HYDERABAD BEFORE SHRI D. MANMOHAN VICE PRESIDENT AND SHRI B. RAMAKOTAIAH ACCOUNTANT MEMBER ITA NO. ASST. YEAR APPELLANT RESPONDENT 185/HYD/2016 2006-07 M/S. HILL COUNTY PROPERTIES LTD. (FORMERLY M/S. MAYTAS PROPERTIES LTD) HYDERABAD [PAN: AAECM2732Q] ADDL. COMMISSIONER OF INCOME TAX CENTRAL RANGE-3 HYDERABAD 285/HYD/2016 2006-07 ASST. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-3(2) HYDERABAD M/S. HILL COUNTY PROPERTIES LTD. (FORMERLY M/S. MAYTAS PROPERTIES LTD) HYDERABAD [PAN: AAECM2732Q] 186/HYD/2016 2007-08 M/S. HILL COUNTY PROPERTIES LTD. (FORMERLY M/S. MAYTAS PROPERTIES LTD) HYDERABAD [PAN: AAECM2732Q] ADDL. COMMISSIONER OF INCOME TAX CENTRAL RANGE-3 HYDERABAD 286/HYD/2016 2007-08 ASST. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-3(2) HYDERABAD M/S. HILL COUNTY PROPERTIES LTD. (FORMERLY M/S. MAYTAS PROPERTIES LTD) HYDERABAD [PAN: AAECM2732Q] FOR ASSESSEE : SHRI S. RAMA RAO AR FOR REVENUE : SMT. M. KIRANMAYEE SR. STANDING COUNSEL FOR DEPT. (FOR ITA NOS. 186 285 & 286/HYD/16) DATE OF FINAL HEARING : 23-08-2016 DATE OF PRONOUNCEMENT : 30-09-2016 O R D E R PER B. RAMAKOTAIAH A.M. : THESE ARE CROSS-APPEALS BY ASSESSEE AND REVENUE AGA INST THE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1 1 HYDERABAD I.T.A. NOS. 185 & 186/HYD/2016 285 & 286/HYD/2016 :- 2 -: DATED 27-10-2015 FOR AY. 2006-07 AND ORDER DT. 30-10- 2015 FOR AY. 2007-08. SINCE COMMON ISSUES ARE INVOLVED THES E APPEALS ARE CLUBBED AND HEARD TOGETHER AND DECIDED BY THIS COMMON ORDER. 2. AT THE OUTSET WE HAVE TO RECORD THAT ITA NO. 185/HYD/2016 HAS TO BE TAKEN AS EX-PARTE QUA REVENUE DUE TO RECUSAL OF THE CIT-DR WHEN THE CASE WAS PART-HEARD. THE CASE WAS TAKEN UP FOR HEARING ON 2 ND AUGUST 2016 AND CONTINUED HEARING ON 4 TH AUGUST 2016 AND 5 TH AUGUST 2016. ON 4 TH AUGUST 2016 ASSESSEES COUNSEL ARGUED ABOUT THE MAJOR ISSUE OF R EOPENING OF ASSESSMENT ON WHICH ADDITIONAL GROUNDS WERE ALSO FI LED. AFTER HEARING THE PRELIMINARY ISSUE OF JURISDICTION THE A RGUMENTS ON ISSUES ON MERITS WERE CONTINUED ON 5 TH AUGUST 2016. AS CERTAIN CLARIFICATIONS WERE REQUIRED THE CASE WAS ADJOURNED TO 19-08-2016 AS PART-HEARD ON THAT DAY. HOWEVER ON 19-08-2016 L D. CIT WHO APPEARED IN THE EARLIER HEARINGS SHRI B.V. GOPINATH DID NOT TURN UP FOR HEARING AND ON HIS BEHALF MS. HEMALATHA DEVI CIT-DR REQUESTED FOR ADJOURNMENT. VIDE A SEPARATE ORDER SH EET DT. 19-08- 2016 THE CASE WAS POSTED ON 23-08-2016 ON WHICH DATE THE LD. CIT-DR APPEARED. AFTER ARGUMENTS WERE COMPLETED BY L D. COUNSEL FOR ASSESSEE HE REFUSED TO ARGUE THE CASE FOR REVENU E BY STATING THAT HE HAS RECUSED HIMSELF ON EARLIER OCCASION AND W ALKED AWAY FROM THE COURT WITHOUT ARGUING THE CASE. IN THESE CIRC UMSTANCES AS THERE IS NO OTHER PERSON TO ARGUE THE CASE AFTER HAV ING BEEN HEARD THE APPEAL IN ITA NO. 185/HYD/2016 IS HEARD E X-PARTE QUA THE REVENUE. SMT. KIRANMAYEE WAS AUTHORIZED TO REPRESE NT THE CASE AT ABOUT 3.40 PM ON 23-08-2016 THROUGH AN AUTHOR ISATION RECEIVED BY FAX FROM THE PR.CCIT HENCE SHE IS ALLOW ED TO APPEAR AND ARGUE THE OTHER CASES IN THE GROUP. LD. SPECIAL COUNSEL I.T.A. NOS. 185 & 186/HYD/2016 285 & 286/HYD/2016 :- 3 -: SMT. KIRANMAYEE RELIED ON THE ORDERS OF AUTHORITIES AN D HER ARGUMENTS WERE TAKEN ON RECORD. THOUGH THE CONDUCT OF CIT-DR IS DEPRECABLE WE DO NOT WISH TO MAKE ANY FURTHER COMMEN T ON HIS BEHAVIOUR IN THE COURT LEST JUSTICE IN THE MATTER SHOU LD NOT SUFFER AND THUS WE HAVE PROPERLY TAKEN INTO CONSIDERATION THE FACTS EMANATING FROM THE RECORD WHICH MAY SUPPORT THE STAND O F THE REVENUE. NEEDLESS TO OBSERVE THAT THE OFFICERS WHO NE ED TO PROPERLY MONITOR THE DRS CONDUCT WOULD CERTAINLY TAKE APPROPRIATE ACTION ON THE ERRING OFFICER. 3. WE HAVE PERUSED THE DOCUMENTS PLACED ON RECORD INCLUDING PAPER BOOKS UPTO 218 PAGES IN 4 VOLUMES A ND ALSO THE WRITTEN SUBMISSIONS. FOR THE SAKE OF RECORD THE APPE ALS IN AY. 2006-07 ARE CONSIDERED IN DETAIL. 4. BRIEFLY STATED ASSESSEE IS IN THE BUSINESS OF REA L ESTATE AND HAS UNDERTAKEN PROPERTY DEVELOPMENT IN THE IMPUGNE D YEARS. ASSESSEE-COMPANY WAS INCORPORATED ORIGINALLY AS M/S. MAYTAS RAJESWARI DEVELOPMENT PVT. LTD. ON 20-05-2005 AND WAS LATER RE- NAMED AS MAYTAS HILL COUNTY PVT. LTD. W.E.F. 28-12-2 005 AND AS MAYTAS HILL COUNTY LTD. W.E.F. 20-12-2007. SUBSEQUE NTLY ITS NAME WAS AGAIN CHANGED AS MAYTAS PROPERTIES LTD. W.E. F. 31-12- 2007. AFTER COMPLETION OF THE ASSESSMENTS BUT BEFORE T HE APPEAL WAS DECIDED BY THE LD.CIT(A) THE COMPANYS NAME WAS ONCE AGAIN CHANGED TO HILLCOUNTY PROPERTIES LTD W.E.F. 16-08-2013 . EVEN THOUGH THE SAME WAS ACKNOWLEDGED BY THE CIT(A) IN THE HEADER OF THE IMPUGNED ORDERS BUT IN THE CAUSE TITLE OF THE ORDER THE NAME OF THE APPELLANT WAS STATED AS M/S. MAYTAS PROPERTIES LTD. ONLY. HOWEVER THE APPROVAL FOR SECOND APPEAL WAS GRANTED I N THE NAME I.T.A. NOS. 185 & 186/HYD/2016 285 & 286/HYD/2016 :- 4 -: OF HILLCOUNTY PROPERTIES LTD. AND THE APPEALS WERE PR EFERRED BY BOTH THE PARTIES IN THE NAME OF HILLCOUNTY PROPERTIES L TD. 5. THIS COMPANY WAS PROMOTED BY THE FAMILY OF SHRI B . RAMALINGA RAJU THE CHAIRMAN OF M/S. SATYAM COMPUTE R SERVICES LTD. THE COMPANY HAS FILED ITS RETURN OF INCOME FOR AY. 20 06-07 ON 30-11-2006 DECLARING A LOSS OF RS. 1 55 46 052/- . THE RETURN WAS PROCESSED U/S. 143(1) OF THE ACT ON 01-11-2007 AC CEPTING THE LOSS RETURNED BY ASSESSEE. FOR AY. 2007-08 ASSESSE E FILED ITS RETURN OF INCOME ON 31-10-2007 DECLARING AN INCOME O F RS. 96 43 760/-. THIS RETURN WAS PROCESSED U/S. 143(1) ON 31-03- 2009. 6. SUBSEQUENTLY THESE TWO IMPUGNED ASSESSMENT YEARS WERE REOPENED BY ISSUE OF NOTICES U/S. 148 OF THE IT ACT DT. 25-03- 2011. THE REASONS FOR REOPENING WHICH ARE COMMON FO R BOTH THE ASSESSMENT YEARS [EXCEPT THE ASSESSMENT YEAR AND THE DAT ES OF PROCESSING OF THE RETURNS] ARE AS UNDER: M/S. MAYTAS PROPERTIES LTD WAS INCORPORATED AS M/S . MAYTAS RAJESWARI DEVELOPMENT PVT LTD ON 20-05-2005 AND W AS LATER RENAMED AS 'MAYTAS HILL COUNTY PVT LTD.' W.E.F. 28-12-2005 AND AS 'MAYTAS HILL COUNTY LTD W.E.F 20-12-2007. SUBSEQUENTLY ITS NAM E WAS AGAIN CHANGED AS 'MAYTAS PROPERTIES LTD' W.E.F. 31-12-2007. THE C OMPANY WAS FLOATED BY THE PROMOTERS OF M/S. SATYAM COMPUTER SERVICES LTD (M/S. SCSL). VIZ. SHRI B. RAMA RAJU. ON 7TH JANUARY 2009 SRI B. RAMALINGA RAJU EX-CHA IRMAN OF M/S.SATYAM COMPUTER SRVICES LTD(SCSL FOR SHORTCUT) IN HIS LETTER SENT TO THE BOARD OF DIRECTORS WITH A COPY MARKED TO SEBI H AS STATED THAT BOOKS OF ACCOUNT OF SCSL HAVE BEEN FUDGED FOR THE LAST SE VERAL YEARS. HE FURTHER STATED THAT THE REVENUES AND PROFITS WERE MANIPULAT ED BY FALSIFICATION OF ACCOUNTS FOR THE LAST SEVERAL YEARS. THE SWORN STATEMENT OF SRI B. RARNALINQA RAIU WAS R ECORDED UNDER SECTION 131 OF THE LT. ACT 1961 ON 21-02-2009 IN T HE CENTRAL PRISON I.T.A. NOS. 185 & 186/HYD/2016 285 & 286/HYD/2016 :- 5 -: CHANCHALGUDA HYDERABAD. IN HIS STATEMENT HE HAS C ONFIRMED AND REITERATED THE FACTS AND FIGURES THAT WERE STATED I N HIS LETTER DATED 7-01- 2009 ADDRESSED TO THE BOARD OF DIRECTORS. IT HAS BEEN ASCERTAINED BY THE CENTRAL INVESTIGATIN G AGENCIES THAT SRI B. RAMALINGA RAJU WAS FULLY CONVERSANT WITH THE ACTIVITIES AND FUNCTIONS OF SCSL AND HAS A PIVOTAL ROLE TO PLAY IN EXERCISING THE CONTROL OVER THE AFFAIRS OF THIS COMPANY AND THE DECISION M AKING WITH RESPECT TO IT AND ITS IMPLEMENTATION. AS THE CHAIRMAN OF SCSL HE HAS SIGNED ON THE FINANCIAL STATEMENTS SHOWING INFLATED CASH AND BANK BALANCES DATA ON INTEREST DATA OF INCOME GENERATED INVESTMENTS AND RECEIPTS AND ALSO SUPPRESSING THE LIABILITY STATUS OF THE COMPANY. HE GOT FORGED MONTHLY BANK STATEMENTS BANK BALANCES PURPORTED TRANSFER OF FUNDS AND FDRS. 327 COMPANIES WERE FLOATED BY HIM ALONG WITH HIS BR OTHERS SRI B. RAMA RAJU AND SRI B. SURYANARAYANA RAJU AND HIS NEAR REL ATIVES IN THE GUISE OF CARRYING OUT AGRICULTURAL ACTIVITIES. THE FUNDS WER E MOBILIZED BY THE ABOVE COMPANIES FROM VARIOUS NBFCS BY PLEDGING THE SHARES OF FAMILY MEMBERS. THE PROCEEDS WERE THUS CONVERTED INTO ASSETS THROUG H THE SAID COMPANIES INTO ASSETS. HE AND HIS BROTHER SRI B. RAMA RAJU OB TAINED MONEY FROM 37 OF SUCH COMPANIES AND ALSO REPAID 15 OUT OF 37 COMP ANIES BY DECEIVING THE BOARD OF DIRECTORS OF SCSL. THERE IS FURTHER INFORMATION THAT SOME OF THE FUNDS ADVANCED TO M/S. SCSL HAVE NOT BEEN RECORDED IN THE BOOKS OF SC SL AT THE BEHEST OF SRI B. RAMLINGA RAJU AND THAT CERTAIN TRANSACTIONS ENTERED IN THE BOOKS OF SCSL ARE NOT RECORDED IN THE ACCOUNTS OF THE GROUP COMPANIES LIKE THE ASSESSEE COMPANY. THE ENTIRE SET OF UNRECORDED TRAN SACTIONS BY SCSL AND GROUP OF COMPANIES AND INDIVIDUALS WERE THUS PL ANNED AND EXECUTED BY ONE MASTER MIND VIZ. SRI B. RAMALINGA RAJU AND HIS BROTHER B. RAMA RAJU. IT CAME TO LIGHT THROUGH INVESTIGATIONS BY CE NTRAL AGENCIES THAT SRI B. RAMALINGA RAJU AND HIS FAMILY MEMBERS INCLUDING SR I B. RAMA RAJU & OTHERS HAVE FLOATED NUMEROUS FRONT COMPANIES FOR TH E PURPOSE OF ROUTING THE FUNDS AND TO ACQUIRE VAST TRACTS OF LANDS IN AN D AROUND HYDERABAD. THE EFFECTIVE CONTROL AND MANAGEMENT OF THESE COMPA NIES WAS WITH SRI B. RAMALINGA RAJU & B. RAMA RAJU AND IN PARTICULAR THR OUGH SRI B. SURYANARAYANA RAJU HIS BROTHER. THE CONTROLLING DIR ECTORS OF THESE FRONT COMPANIES ARE THE FAMILY MEMBERS OF SRI B. RAMALING A RAJU INCLUDING B. RAMA RAJU & OTHERS. IT IS BELIEVED THAT SINCE THE ACCOUNTS OF M/S. SATY AM COMPUTER SERVICES LTD ARE DOCTORED AND FABRICATED THE ACCO UNTS OF M/S. MAYTAS PROPERTIES LTD.(FORMERLY KNOWN AS M/S. MAYTAS 'HILL COUNTY LTD) WHICH IS CLOSELY CONNECTED DO NOT REFLECT THE TRUE AND CORRE CT FINANCIAL RESULTS BEING UNDER THE SAME MANAGEMENT AND CONTROL. FURTHER SRI B. RAMALINGA RAJU IS THE CHAIRMAN AND SRI B. RAMA RAJU IS THE CMD OF M/S. SATYAM COMPUTER SERVICES LTD. BOTH THE PERSONS HAVE BEEN A CCUSED IN A MULTI CRORE SCAM AND ARE PRESENTLY IN JUDICIAL CUSTODY. T HE ASSESSEE COMPANY I.T.A. NOS. 185 & 186/HYD/2016 285 & 286/HYD/2016 :- 6 -: HAS BEEN FLOATED BY THE PERSONS BELONGING TO M/S. S ATYAM COMPUTER SERVICES LTD. GROUP VIZ. B. RAMA RAJU WHO HAD DI RECT CONTROL OVER THE AFFAIRS OF THE ASSESSEE-COMPANY. THE RETURN OF INCOME FILED BY THE ASSESSEE COMPANY FOR THE A.Y.2006-07 HAS BEEN PROCESSED U/S.143(1) OF THE I. T. ACT 1961 AND IT IS BELIEVED THAT THE ASSESSEE COMPANY IN ITS RETURN DI D NOT DISCLOSE THE MATERIAL FACTS AS BELOW: A) THE FACTS RELATING THE FUDGING AND MANIPULATION OF ACCOUNTS OF THE ASSESSEE COMPANY AND TRANSACTIONS RELATING TO SCSL PARTICULARLY WITH REFERENCE TO TRANSACTIONS WITH OTHER GROUP COMPANIE S LIKE THE ASSESSEE COMPANY AS STATED BY SRI B. RAMALINGA RAJU IN HIS STATEMENT. B) THAT THERE WERE VARIATIONS IN THE QUANTUM OF INC OME AND ASSETS/LIABILITIES OF SCSL RELATING TO THE FRONT CO MPANIES INCLUDING THE ASSEESSEE COMPANY AS REVEALED IN THE CONFESSIONAL STATEMENTS ETC AND THE FACTS WHICH CAME TO LIGHT IN THE INVESTIGATIONS ; C) THERE WERE MANIPULATION OF THE ACCOUNTING STATEM ENTS AND THE AUDIT REPORTS; D) NON-RECORDING OF INTER COMPANY AND RELATED PARTY TRANSACTIONS; THERE IS A SCOPE FOR THE ABOVE FACTS WILL HAVE A BE ARING ON THE COMPANY'S OWN FINANCIAL AFFAIRS ITS CONSEQUENT INC OME AND ASSETS POSITION. I HAVE THUS REASON TO BELIEVE THAT THERE IS FAILU RE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL F ACTS NECESSARY FOR ITS ASSESSMENT FOR AY 2006-07 AND ALSO THAT IT RESULTED IN ESCAPEMENT OF INCOME CHARGEABLE TO TAX WHICH IS LIKELY TO AMOUNT TO RS. ONE LAKH OR MORE GIVEN THE VOLUME OF THE TRANSACTIONS AS STATED ABOVE WITHIN THE MEANING OF SECTION 147 READ WITH SECTION149 OF THE 1.1. ACT 1961. FOR THE ABOVE DETAILED REASONS IT IS PROPOSED TO ISSUE NOT ICE TO THE ASSESSEE UNDER SECTION 148 OF THE I.T. ACT TO REOPEN THE ASS ESSMENT IN THE ASSESSEE'S CASE FOR THE ASSESSMENT YEAR 2006-07 FOR BRINGING TO TAX THE INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSME NT. 6.1. THEREAFTER CONSIDERING ASSESSEES OBJECTIONS IN REOPENING WHICH WERE REJECTED THE AO REFERRED THE A CCOUNTS TO SPECIAL AUDIT U/S. 142(2A) IN BOTH THE ASSESSMENT YEAR S AND COMPLETED THE ASSESSMENT BY MAKING VARIOUS ADDITIONS IN THE I.T.A. NOS. 185 & 186/HYD/2016 285 & 286/HYD/2016 :- 7 -: RESPECTIVE ASSESSMENT YEARS. AS AGAINST THE LOSS OF RS . 1 55 46 052/- RETURNED BY ASSESSEE THE TOTAL INCOME W AS DETERMINED AT RS. 15 18 05 583/- IN AY. 2006-07. T HE TOTAL ADDITION MADE IS TO AN EXTENT OF RS. 16 73 51 635/-. THE DETAILS OF THE ADDITIONS ARE AS UNDER: COMPUTATION OF INCOME & TAX ALONG WITH INTEREST RS. INCOME/LOSS DECLARED BY THE ASSESSEE FOR THE AY. 2006-07: (-) 1 55 46 052 ADD: 1 ADDITION (AS DISCUSSED IN PARA 9.1) ON ACCOUNT OF VIOLATION OF PROVISIONS U/S. 40A(3) OF THE INCOME TAX ACT 1961 I.E. CASH PAID IN EXCESS OF RS. 20 000/- FOR PURCHASE OF SONY VIDEO CAMERA RS. 28 600/- 02 ADDITION (AS DISCUSSED IN PARA 9.2) ON ACCOUNT OF DISALLOWANCE OF INTEREST PAID TO BANKS AND FINANCIAL INSTITUTIONS 56 11 320/- 03 ADDITION (AS DISCUSSED IN PARA 9.3) ON ACCOUNT OF PURCHASE OF BLAKBERRY PHONE I.E. CAPITAL EXPENDITURE DEBITED TO P&L A/C 8 400/- 04 ADDITION (AS DISCUSSED IN PARA 9.3.4) WITH RESPECT TO FIXED ASSETS WHERE BILLS NOT PRODUCED: 1 06 492/- 05 ADDITION UNDER THE HEAD TRUNK ROAD COST (AS DISCUSSED IN PARA 9.4) I.E. ENTIRE AMOUNT OF REIMBURSEMENT MADE TO LOCS AND DEBITED WORK-IN-PROGRESS 2 49 06 130/- 06 ADDITION UNDER THE HEAD HUDA FEES (AS DISCUSSED IN PARA 9.5) 67 44 463/- 07 ADDITION UNDER THE HEAD OTHER WORKS CONTRACTS GIVEN BY ASSESSEE (AS DISCUSSED IN PARA 9.6) 82 24 731/- 08 DISALLOWANCE U/S. 40(A)(IA) OF THE INCOME TAX ACT 1961 MADE ON ACCOUNT OF CONTRACTUAL PAYMENT MADE TO MIPL (AS DISCUSSED IN PARA 9.7) 10 91 41 612/- 09 ADDITION ON ACCOUNT OF OTHER PAYMENTS ON WHICH THERE IS A I.T.A. NOS. 185 & 186/HYD/2016 285 & 286/HYD/2016 :- 8 -: NON-DEDUCTION/SHORT-DEDUCTION OF TDS (AS DISCUSSED IN PARA 9.8) (RS. 92 05 972 + RS. 27 62 698=RS.11968670/0) 1 19 68 670/- 10 DISALLOWANCE U/S. 43B OF THE INCOME TAX ACT 1961 (AS DISCUSSED IN PARA 9.9) 93 325/- 11 EXPENDITURE DISALLOWANCE U/S. 37(1) FOR NOT HAVING INCURRED FOR THE PURPOSE OF BUSINESS (AS DISCUSSED IN PARA 9.10) 5 17 892/- TOTAL ADDITION: 16 73 51 635 7. SIMILARLY IN AY. 2007-08 AS AGAINST THE INCOME O F RS. 98 43 780/- DECLARED BY ASSESSEE THE FOLLOWING ADDI TIONS ARE MADE TOTALLING TO RS. 2 11 67 31 975/- . COMPUTATION OF INCOME & TAX ALONG WITH INTEREST RS. INCOME/LOSS DECLARED BY THE ASSESSEE FOR THE AY. 2007-08: 96 43 760 ADD: 1 ADDITION ON ACCOUNT OF DISALLOWANCE OF EXPENDITURE U/S. 37(1) (AS DISCUSSED IN PARA 9.1) RS. 4 08 75 701 02 ADDITION ON ACCOUNT OF DISALLOWANCE OF EXPENDITURE U/S. 37(1) (AS DISCUSSED IN PARA 9.1.5) 45 00 000 03 ADDITION ON ACCOUNT OF DISALLOWANCE OF INTEREST PAID TO BANKS AND FINANCIAL INSTITUTIONS (AS DISCUSSED IN PARA 9.2.9) 9 84 32 271 04 ADDITION (AS DISCUSSED IN PARA 9.3.4) ON ACCOUNT OF DISALLOWANCE OF CAPITAL EXPENDITURE DEBITED TO THE P&L A/C & ADDITIONS TO FIXED ASSETS WHERE NO BILLS ARE AVAILABLE 81 556 05 ADDITION (AS DISCUSSED IN PARA 9.3.8) ON ACCOUNT OF DISALLOWANCE OF THE DEPRECIATION CLAIMED OF RS. 2 90 876/- ON THE CAPITALIZED ITEM FOR THE WANT OF REQUISITE I.T.A. NOS. 185 & 186/HYD/2016 285 & 286/HYD/2016 :- 9 -: EVIDENCE REGARDING THE EXISTENCE OF THE ASSET AND FOR THE ASSET HAVING BEEN PUT TO USE AND ADDITION (AS DISCUSSED IN PARA 9.3.9) IN THE ABSENCE OF THE REQUISITE BILL NO COGENCES OF THE CAPITAL EXPENDITURE MADE TOWARDS THE ADDITION TO VEHICLES TO THE TUNE OF RS. 6 37 057/- IS TAKEN. THUS THE CONSEQUENT DEPRECIATION CLAIMED BY THE ASSESSEE ON THE SUBJECT AMOUNT @ 15% AMOUNTING TO RS. 95 559/- IS HERE BY DISALLOWED. (RS.2 90 876/- + RS. 95 559/- = RS. 3 86 435) 3 86 435 06 DISALLOWANCE (AS DISCUSSED IN PARA 9.4.9) OF ENTIRE AMOUNT OF REIMBURSEMENT MADE TO LOCS AND DEBITED TO WORK IN PROGRESS BY WAY OF JOURNAL ENTRIES (WHICH IS BEING TREATED AS THE COST OF THE DEVELOPMENT OF LAND AND CHARGED TO CUSTOMERS EVENTUALLY) AMOUNTING TO RS. 1 30 53 852/- 1 30 53 852 07 THE SUBJECT PAYMENT OF RS. 5 67 00 000/- (AS DISCUSSED IN PARA 9.5.5) UNDER THE HEAD OTHER WORKS CONTRACT WORKS GIVEN BY THE ASSESSEE TO M/S. SARALA PROJECTS PVT. LTD. IS NOT AN EXPENDITURE INCURRED FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE HENCE DISALLOWED 5 67 00 000 08 ADDITION (AS DISCUSSED IN PARA 9.6.4) ON ACCOUNT OF SHORT RECOGNITION OF REVENUE 15 64 02 468 09 ADDITION (AS DISCUSSED IN PARA 9.7.3) ON ACCOUNT OF NON- APPORTIONMENT OF STATUTORY AND CONSULTANCY CHARGES ON AMENITIES 2 33 24 429 10 DISALLOWANCE (AS DISCUSSED IN PARA 10.1.2) OF EXPENDITURE AMOUNTING TO RS. 11 19 243/- HAS BEEN DEBITED TO P&L A/C THAT BELONGS TO THE EARLIER ACCOUNTING PERIOD 11 19 243 I.T.A. NOS. 185 & 186/HYD/2016 285 & 286/HYD/2016 :- 10 -: 11 DISALLOWANCE U/S. 40(A)(IA) (AS DISCUSSED IN PARA 10.3.2) OF CONTRACTUAL PAYMENTS MADE TO MIPL 58 54 03 397 12 ADDITION (AS DISCUSSED IN PARA 11.1.2) ON ACCOUNT OF EXPENDITURE DISALLOWED U/S. 37(1) AND NON-DEDUCTION OF TDS U/S. 194C 31 10 908 13 ADDITION (AS DISCUSSED IN PARA 11.2.2) ON ACCOUNT OF NON- DEDUCTION OF TDS U/S. 194C 26 29 195 14 ADDITION (AS DISCUSSED IN PARA 11.3.6) ON ACCOUNT OF DISALLOWANCE OF EXPENDITURE U/S. 37(1) AND SHORT DEDUCTION OF TDS 1 12 18 54 051 15 ADDITION (AS DISCUSSED IN PARA 11.4.9) ON ACCOUNT OF DISALLOWANCE OF EXPENDITURE U/S. 37(1) AND SHORT DEDUCTION OF TDS U/S. 194J 14 40 624 16 ADDITION UNDER THE HEAD CORPUS FUND (AS DISCUSSED IN PARA 12) 6 48 530 17 ADDITION UNDER THE HEAD SHORT RECEIPT OF INTEREST ON ICD (AS DISCUSSED IN PARA 13) 67 69 315 TOTAL ADDITION: 2 11 67 31 975 7.1. AS SEEN FROM THE RETURN FILED BY ASSESSEE IN AY . 2007- 08 THE INCOME FOR THE YEAR WAS ARRIVED AT RS. 2 48 37 383/- AND AFTER SETTING OFF THE CARRIED FORWARD LOSS DECLARED IN AY. 2006-07 AT RS. 1 51 93 624/- THE TOTAL INCOME WAS OFFERED AT RS. 96 43 759/-. AO IN HIS ANXIETY TO COMPLETE THE ASSESSMENT AND TO MA KE SUBSTANTIAL ADDITIONS IGNORED THE SET-OFF OF BROUGHT F ORWARD LOSSES MADE BY ASSESSEE TO AN EXTENT OF RS. 1 51 93 624/- W HEREAS IN AY. 2006-07 BY VIRTUE OF MAKING VARIOUS ADDITIONS THAT WAS TURNED INTO A POSITIVE INCOME. HIS COMPUTATION OF INCOME HAS STAR TED FROM THE RETURNED INCOME ONLY. BE THAT AS IT MAY AO MADE SUBSTA NTIAL ADDITIONS AS DETAILED ABOVE IN BOTH THE YEARS WHICH WA S SUBJECT MATTER OF APPEALS BEFORE THE LD. CIT(A). I.T.A. NOS. 185 & 186/HYD/2016 285 & 286/HYD/2016 :- 11 -: 8. LD. CIT(A) HAS CONSIDERED ASSESSEES SUBMISSION S AND ORDER OF THE AO AND GAVE RELIEF ON THE ISSUE OF INTERE ST DISALLOWANCE IN BOTH THE YEARS. HE ALSO SET ASIDE THE DISALLOWANCE S U/S. 40(A)(IA) BOTH NON-DEDUCTION AS WELL AS SHORT DEDUCTI ON FOLLOWING VARIOUS CASE LAW. HOWEVER HE HAS CONFIRMED PARTLY T HE DISALLOWANCE MADE U/S.40A(3) AND CONFIRMED SUBSTANTIAL DISALLOWANCE OF COST OF TRUNK ROAD CLAIMED BY ASSESSE E IN BOTH THE YEARS ALONG WITH HUDAS FEES PAID AS NOT RELATING TO A SSESSEES BUSINESS. IN SOME OF THE ISSUES LIKE DISALLOWANCE O F EXPENDITURE ON ACCOUNT OF OTHER WORKS NON-DEDUCTION OF TAX CIT(A ) DIRECTED THE AO TO EXAMINE AND THESE WERE ALLOWED BY THE AO IN THE CONSEQUENTIAL ORDERS AFTER DUE EXAMINATION. 8.1. IN 2007-08 ALSO THE CIT(A) HAS GIVEN SIMILAR RELIEF AND REVENUE IS IN APPEAL ON THOSE ISSUES. ASSESSEE IS IN APPEAL ON ONE MAJOR ISSUE OF DISALLOWANCE OF COST OF ROADS CLAIMED WHICH WAS TO AN EXTENT OF RS. 2 49 06 130/- IN AY. 2006-07 AND RS . 1 30 53 852/- IN AY. 2007-08. THERE ARE OTHER GROUN DS OF PAYMENT TO HUDA WHICH IS SIMILAR TO THE ABOVE DISALLOWA NCE. 9. IN ASSESSEES APPEALS IN ADDITION TO THE GROUND S ON MERITS OF AMOUNTS CONFIRMED BY LD. CIT(A) ASSESSEE H AS RAISED GROUNDS RELATING TO ACTION OF THE AO IN INITIATING PRO CEEDINGS U/S. 147 OF THE ACT. ASSESSEE ALSO RAISED FOLLOWING ADDITI ONAL GROUNDS IN SUPPORT OF MAIN GROUNDS ON THE ISSUE OF REOPENING : ADDITIONAL GROUNDS OF APPEAL : I. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) OU GHT TO HAVE HELD THAT THE INITIATION OF PROCEEDINGS U/S. 147 AR E NOT VALID. I.T.A. NOS. 185 & 186/HYD/2016 285 & 286/HYD/2016 :- 12 -: II. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) OU GHT TO HAVE SEEN THAT THERE ARE NO FINANCIAL TRANSACTIONS BETWE EN THE APPELLANT AND SATYAM COMPUTER SERVICES LTD; THAT THERE IS NO MENTION IN THE LETTER ADDRESSED BY SRI B. RAMALINGA RAJU ABOUT THE FINANCIAL AFFAIRS OF THE APPELLANT AND NO ADDITION WITH REFER ENCE TO THE REASONS RECORDED WAS MADE IN THE RE-OPENED ASSESSME NT. ASSESSEES MAIN CONTENTIONS ARE THAT THE PROCEEDINGS INI TIATED ARE NOT VALID. FURTHER THE REASONS FOR REOPENING THE ASS ESSMENT HAVE NO NEXUS WITH THE ADDITIONS MADE IN THE ASSESSMENT ORDE R. THEREFORE THE ASSESSMENT COMPLETED ITSELF IS BAD IN L AW. THE DETAILED SUBMISSIONS OF ASSESSEE ALONG WITH THE CASES RELIED ON BY ASSESSEE ON THE ISSUE ARE AS UNDER: IN THE ASSESSMENT ORDER THE REASONS FOR REOPENING THE ASSESSMENT ARE MENTIONED AT PARAS 3.1 TO 4.2. IN BRIEF THE AS SESSING OFFICER STATED AS UNDER: A) SRI B.RAMALINGA RAJU EX-CHAIRMAN OF SATYAM COMP UTER SERVICES LTD. SENT A LETTER TO THE BOARD OF DIRECTORS WITH A COPY MARKED TO SEBI STATING THAT-THE BOOKS OF ACCOUNT OF SATYAM COMPUTER SERVIC ES LTD. HAVE BEEN FUDGED FOR THE LAST SEVERAL YEARS; B) THE STATEMENT OF SRI B.RAMALINGA RAJU WAS RECORD ED U/S 131 OF THE I.T.ACT ON 21.02.2009 WHILE HE WAS IN CENTRAL PRISO N AND IN HIS STATEMENT HE CONFIRMED AND REITERATED THE FACTS AN D FIGURES THAT ARE STATED IN HIS LETTER DATED 07.01.2009 ADDRESSED TO THE BOARD OF DIRECTORS. C) THE CENTRAL INVESTIGATING AGENCIES ASCERTAINED T HAT SRI B.RAMALINGA RAJU WAS CONVERSANT WITH THE ACTIVITIES AND FUNCTIO NS OF SATYAM COMPUTER SERVICES LTD. AND PLAYED A PIVOTAL ROLE I N EXERCISING CONTROL OVER THE AFFAIRS OF THE SAID COMPANY. D) AS THE CHAIRMAN OF SATYAM COMPUTER SERVICES LTD. HE SIGNED THE FINANCIAL STATEMENTS SHOWING INFLATED CASH AND BANK BALANCES DATA ON INTEREST DATA ON INCOME GENERATED INVESTMENTS AND RECEIPTS ETC. E) ALL THE TRANSACTIONS WERE NOT RECORDED IN THE BO OKS OF SATYAM COMPUTER SERVICES LTD. AT THE BEHEST OF SRI B.RAMALINGA RAJ U. IT IS MENTIONED BY THE ASSESSING OFFICER THAT THE A CCOUNTS OF SATYAM COMPUTER SERVICES LTD. ARE DOCTORED AND FABRICATED AND THEREFORE THE ACCOUNTS OF MAYTAS INFRA PVT.LTD. FORMERLY KNOWN A S MAYTAS HILL COUNTY I.T.A. NOS. 185 & 186/HYD/2016 285 & 286/HYD/2016 :- 13 -: LTD. WHICH IS CLOSELY CONNECTED WITH SATAYAM COMPU TER SERVICES LTD. DO NOT REFLECT THE TRUE AND CORRECT FINANCIAL RESULTS AS IT WAS UNDER THE SAME MANAGEMENT AND CONTROL. FOR THE REASONS MENTIONED A BOVE THE ASSESSING OFFICER INITIATED PROCEEDINGS U/S 147 AND ISSUED NO TICE U/S 148 OF THE I.T.ACT. SIMILAR NOTICES WERE ISSUED TO OTHER CONCERNS OF SA TYAM GROUP. THE QUESTION OF VALIDITY OF INITIATION OF PROCEEDINGS U J S 147 WAS DECIDED BY THE HON'BLE ITAT VIDE CONSOLIDATED ORDER IN ITA NO. 1233/HYD/2011 DATED 31.12.2013. IN THE SAID ORDER THE HON'BLE ITAT HEL D AS UNDER: A) THE HON'BLE ITAT HELD THAT NO VALID REASONS TO R EOPEN THE ASSESSMENT OF THE COMPANY WERE RECORDED AS THE REOPENING WAS M ERELY TO EXAMINE THE VERACITY AND FINANCIAL IMPLICATIONS BETWEEN THE APPELLANT COMPANY AND SATYAM COMPUTER SERVICES LIMITED. THE HON'BLE I TAT AT PARA 16 OF THE SAID ORDER HELD THAT THERE IS NO REASON TO BELI EVE THAT THE INCOME OF THE ASSESSEE HAD ESCAPED ASSESSMENT. B) THE HON'BLE ITAT ALSO OBSERVED THAT IF THERE IS ANY REASON RECORDED THE SAME IS NOT BASED ON A TANGIBLE MATERIAL. C) THE RECORDING OF REASONS BEFORE THE ISSUE OF NOT ICE U/S 148 HAS NO NEXUS WITH THE ASSESSMENT MADE. D) THE REOPENING WAS ON WRONG FOUNDATION OF REASONI NG OF THE FINANCIAL IMPLICATIONS BETWEEN THE APPELLANT COMPANY AND SATY AM COMPUTER SERVICES LTD. WHICH WAS NOT ESTABLISHED IN THE ASS ESSMENT TO JUSTIFY THE REOPENING. E) THE REASSESSMENT COMPLETED U/S 143(3) RWS 147 HA S NO RELATIONSHIP AT ALL FOR THE REASONS FOR REOPENING. F) THE ISSUES INVOLVED ARE SIMILAR. IN VIEW OF THE ABOVE THE APPELLANT REQUESTS THE HO N'BLE ITAT TO HOLD THAT THE INITIATION OF PROCEEDINGS U/S 147 OF THE I.T. A CT ARE NOT VALID. 10. THERE ARE NO ARGUMENTS BY THE REVENUE AS THE LD. CIT- DR REFUSED TO ARGUE ON THIS ISSUE EVEN THOUGH HE WAS PRESENT IN THE COURT ROOM ON BEHALF OF REVENUE ON 4 TH AND 5 TH AUGUST 2016. LD. SR. STANDING COUNSEL RELIED ON THE ORDERS OF AO O N THIS ASPECT. I.T.A. NOS. 185 & 186/HYD/2016 285 & 286/HYD/2016 :- 14 -: 11. WE HAVE CONSIDERED THE CONTENTIONS AND PERUSED TH E DOCUMENTS ON RECORD. AS SEEN FROM THE ORDER OF THE AO THERE IS NO DOUBT THAT THE ASSESSMENT WAS REOPENED ONLY TO EXAM INE THE SO CALLED FRAUDULENT TRANSACTIONS UNDERTAKEN BY SHRI RAMA LINGA RAJU PROMOTER OF ASSESSEE-GROUP BUT NOWHERE IN THE ORDER TH ERE WAS ANY FINDING OR ANY REMARK WITH REFERENCE TO EITHER SUC H FRAUDULENT TRANSACTIONS OR SIPHONING OF MONEYS FROM ASSESSEES B OOKS OF ACCOUNT. IN FACT EVEN THOUGH SPECIAL AUDIT WAS CONDUCT ED ALL THE DISALLOWANCES MADE BY THE AO ARE ROUTINE DISALLOWANCE S WHICH COULD HAVE BEEN EXAMINED IN THE NORMAL SCRUTINY. THE REFORE THERE IS NO LIVE LINK BETWEEN THE REASONS FOR REOPENING OF THE ASSESSMENT AND THE COMPLETION OF ASSESSMENT IN WHICH VARIOUS ADDI TIONS ARE MADE. PROVISIONS OF SECTION 147 ARE AS UNDER: SECTION 147: IF THE [ASSESSING] OFFICER [HAS REAS ON TO BELIEVE] THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR HE MAY SUBJECT TO THE PROVISIONS OF SECTIONS 148 TO 153 ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS E SCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF T HE PROCEEDINGS UNDER THIS SECTION OR RECOMPUTE THE LOSS OR THE DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE AS THE CASE MAY BE FOR THE ASSESSMENT YEAR CONCERNED (HEREAFTE R IN THIS SECTION AND IN SECTIONS 148 TO 153 REFERRED TO AS THE RELEVANT ASSESSMENT YEAR) : PROVIDED THAT WHERE AN ASSESSMENT UNDER SUB-SECTION (3) OF SECTION 143 OR THIS SECTION HAS BEEN MADE FOR THE RELEVANT ASSESSMENT YEAR NO ACTION SHALL BE TAKEN UNDER THIS SECTION AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASS ESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON THE PART OF THE ASSESSE E TO MAKE A RETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB-SECTION (1) OF SECTION 142 OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECE SSARY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR: [PROVIDED FURTHER THAT NOTHING CONTAINED IN THE FIR ST PROVISO SHALL APPLY IN A CASE WHERE ANY INCOME IN RELATION TO ANY ASSET (INCLUDIN G FINANCIAL INTEREST IN ANY ENTITY) LOCATED OUTSIDE INDIA CHARGEABLE TO TAX HAS ESCAP ED ASSESSMENT FOR ANY ASSESSMENT YEAR:] I.T.A. NOS. 185 & 186/HYD/2016 285 & 286/HYD/2016 :- 15 -: [PROVIDED [ALSO] THAT THE ASSESSING OFFICER MAY ASS ESS OR REASSESS SUCH INCOME OTHER THAN THE INCOME INVOLVING MATTERS WHICH ARE THE SUB JECT MATTERS OF ANY APPEAL REFERENCE OR REVISION WHICH IS CHARGEABLE TO TAX A ND HAS ESCAPED ASSESSMENT.] EXPLANATION 1.PRODUCTION BEFORE THE ASSESSING OFFI CER OF ACCOUNT BOOKS OR OTHER EVIDENCE FROM WHICH MATERIAL EVIDENCE COULD WITH DU E DILIGENCE HAVE BEEN DISCOVERED BY THE ASSESSING OFFICER WILL NOT NECESSARILY AMOUN T TO DISCLOSURE WITHIN THE MEANING OF THE FOREGOING PROVISO. EXPLANATION 2.FOR THE PURPOSES OF THIS SECTION TH E FOLLOWING SHALL ALSO BE DEEMED TO BE CASES WHERE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT NAMELY : (A) WHERE NO RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSEE ALTHOUGH HIS TOTAL INCOME OR THE TOTAL INCOME OF ANY OTHER PERSON IN R ESPECT OF WHICH HE IS ASSESSABLE UNDER THIS ACT DURING THE PREVIOUS YEAR EXCEEDED THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOME-TAX ; (B) WHERE A RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSEE BUT NO ASSESSMENT HAS BEEN MADE AND IT IS NOTICED BY THE ASSESSING OF FICER THAT THE ASSESSEE HAS UNDERSTATED THE INCOME OR HAS CLAIMED EXCESSIVE LOS S DEDUCTION ALLOWANCE OR RELIEF IN THE RETURN ; [(BA) WHERE THE ASSESSEE HAS FAILED TO FURNISH A RE PORT IN RESPECT OF ANY INTERNATIONAL TRANSACTION WHICH HE WAS SO REQUIRED UNDER SECTION 92E ;] (C) WHERE AN ASSESSMENT HAS BEEN MADE BUT (I) INCOME CHARGEABLE TO TAX HAS BEEN UNDERASSESSED ; OR (II) SUCH INCOME HAS BEEN ASSESSED AT TOO LOW A RAT E ; OR (III) SUCH INCOME HAS BEEN MADE THE SUBJECT OF EXCE SSIVE RELIEF UNDER THIS ACT ; OR (IV) EXCESSIVE LOSS OR DEPRECIATION ALLOWANCE OR AN Y OTHER ALLOWANCE UNDER THIS ACT HAS BEEN COMPUTED;] [(D) WHERE A PERSON IS FOUND TO HAVE ANY ASSET (INC LUDING FINANCIAL INTEREST IN ANY ENTITY) LOCATED OUTSIDE INDIA.] [EXPLANATION 3.FOR THE PURPOSE OF ASSESSMENT OR RE ASSESSMENT UNDER THIS SECTION THE ASSESSING OFFICER MAY ASSESS OR REASSESS THE IN COME IN RESPECT OF ANY ISSUE WHICH HAS ESCAPED ASSESSMENT AND SUCH ISSUE COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION NOTWITHSTAND ING THAT THE REASONS FOR SUCH ISSUE HAVE NOT BEEN INCLUDED IN THE REASONS RECORDED UNDE R SUB-SECTION (2) OF SECTION 148 .] [EXPLANATION 4.FOR THE REMOVAL OF DOUBTS IT IS HE REBY CLARIFIED THAT THE PROVISIONS OF THIS SECTION AS AMENDED BY THE FINANCE ACT 2012 SHALL ALSO BE APPLICABLE FOR ANY ASSESSMENT YEAR BEGINNING ON OR BEFORE THE 1ST DAY OF APRIL 2012.] I.T.A. NOS. 185 & 186/HYD/2016 285 & 286/HYD/2016 :- 16 -: 11.1. AS CAN BE SEEN FROM THE ABOVE PROVISIONS IF THE AO HAS REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR HE MAY ASSESS OR RE-ASSESS SUCH INCOME AND ALSO ANY OTHER INCOME WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS. IT MEAN S THAT AO SHALL ASSESS OR RE-ASSESS SUCH INCOME WHICH HAS LEA D TO REOPENING OF ASSESSMENT TO BRING IT TO TAX AS ESCAPED INCOME. HOWEVER AS ALREADY STATED HEREIN ABOVE THE REASONS FOR REOPENING ARE FOR EXAMINING THE FRAUDULENT TRANSACTIONS UNDERTAKEN BY THE PROMOTER SHRI B. RAMALINGA RAJU AND HIS COMPANY SAT YAM COMPUTER SERVICES LTD. HOWEVER THERE IS NO SUCH ADDI TION MADE. IN VIEW OF THAT BRINGING TO TAX ANY OTHER INCOME DOES N OT ARISE AS HELD BY VARIOUS DECISIONS OF THIS FORUM AND ALSO BY THE HON'BLE HIGH COURTS. THE CO-ORDINATE BENCH IN THE CASE OF 1233/HYD/2011 M/S. ROHINI BIOTECH (P) LTD. AND OTHER S DT. 31-12-2013 HAS HELD AS UNDER: 12. WE ALSO FIND THAT CIT(A) ERRED IN HOLDING THAT THE ASSESSING OFFICER HAD VALID REASONS TO REOPEN THE ASSESSMENT OF THE A SSESSEE-COMPANY TO EXAMINE THE VERACITIES AND FINANCIAL IMPLICATIONS B ETWEEN THE ASSESSEE COMPANY AND M/S. SATYAM COMPUTER SERVICES LIMITED. WE RELY UPON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F GANGA SARAN & SONS' P. LTD. VS. ITO AND OTHERS (SUPRA) FOR THE PROPOSIT ION THAT IF THERE IS NO RATIONAL NEXUS BETWEEN THE REASONS' AND THE BELIE F' SO THAT ON SUCH REASONS THE A.O. CANNOT HAVE REASON TO BELIEVE THAT ANY PART OF THE INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT AND SUCH ESC APEMENT WAS BY REASON OF OMISSION OR FAILURE ON THE PART OF THE AS SESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS THE NOTICE ISSUED BY THE A.O. IS TO BE STRUCK AS INVALID. 13. WE ALSO RELY ON THE DECISION OF SARTHAK SECURIT IES CO. P. LTD. VS. ITO (2010) 329 ITR 110 WHEREIN IT HAS BEEN HELD AS FOLL OWS : 'THAT THE FORMATION OF BELIEF WAS A CONDITION PRECE DENT AS REGARDS THE ESCAPEMENT OF THE TAX PERTAINING TO THE ASSESSMENT YEAR BY THE ASSESSING OFFICER. THE ASSESSING OFFICER WAS REQUIRED TO FORM AN OPINION BEFORE HE I.T.A. NOS. 185 & 186/HYD/2016 285 & 286/HYD/2016 :- 17 -: PROCEEDED TO ISSUE A NOTICE. THE VALIDITY OF REASON S WHICH WERE SUPPOSED TO SUSTAIN THE FORMATION OF AN OPINION WAS CHALLENGEA BLE'. 14. IN THE CASE OF HINDUSTAN LEVER LTD. VS. R.B. WA DKAR ACIT (NO.1) (2004) 268 ITR 332 (BORN.) (H.C.) THE HON'BLE BOMBA Y HIGH COURT HELD AS FOLLOWS: 'THAT THE NOTICE WAS CLEARLY BEYOND THE PERIOD OF F OUR YEARS. THE REASONS RECORDED BY THE ASSESSING OFFICER NOWHERE S TATED THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND T RULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT FOR THAT ASSESSMENT YEAR. HENCE THE ASSESSING OFFICER HAD NO JURISDICTION TO REOPEN THE ASSESSMENT PROCEEDINGS. THE NOTICE WAS NOT VALID AND WAS LIABLE TO BE QUASHED.' 15. IN THE CASE OF MAHALAXMI MOTORS LTD. VS. DCIT R EPORTED IN (2004) 265 ITR 53 (A.P.) (H.C.) THE JURISDICTIONAL HIGH COURT HAS HELD THAT WHEN ALL THE FACTS HAD BEEN FULLY DISCLOSED BY THE PETITIONER T HE NOTICE OF RE- ASSESSMENT WAS NOT VALID AND WAS LIABLE TO BE QUASH ED. 16. WE RELY ON THE DECISIONS OF CIT VS. JET AIRWAYS (I) LTD. (2011) 331 ITR 236 (BOM.) AND ACIT VS. MAJOR DEEPAK MEHTA (2012) 3 44 ITR 641 TO CONCLUDE THAT THE A.O. HAS NOT COMPLIED WITH THE MA NDATORY CONDITION PRE-CONDITION FOR TAKING ACTION UNDER SECTION 147 N AMELY THAT 'REASON TO BELIEVE' THAT INCOME OF THE ASSESSEE HAD 'ESCAPED A SSESSMENT'. THE REASON TO BELIEVE IS LACKING. 17. FURTHER THE 'REASON TO BELIEVE' IS NOT BASED O N TANGIBLE MATERIAL. WE FIND THAT IN THE CASE OF RANJIT REDDY VS. DY.CIT H YDERABAD (2013) 144 ITD 361 THE COORDINATE BENCH OF THIS TRIBUNAL HAS D WELLED ON THE CONTENTION OF THE ASSESSEE THAT REOPENING OF THE AS SESSMENT IS NOT PERMISSIBLE AS THERE IS NO TANGIBLE MATERIAL. THE R ELEVANT PORTION OF THE ORDER IS REPRODUCED HERE UNDER: 'ONE NEEDS TO GIVE A SCHEMATIC INTERPRETATION TO TH E WORDS 'REASONS TO BELIEVE' FAILING WHICH SECTION 147 WOULD GIVE ARBI TRARY POWER TO ASSESSING OFFICER TO REOPEN ASSESSMENTS ON THE BASIS OF MERE CHANGE OF OPINION WHICH CANNOT BE PER SE REASON TO REOPEN. THE A.O. HAS NO POWER TO REVIEW; HE HAS THE POWER TO REASSESS. BUT REASSESSMENT HAS TO BE TAXED ON FULFILMENT OF CERTAIN PRE- CONDITIONS AND IF THE CONCEPT OF 'CHANGE OF OPINION ' IS REMOVED THEN IN THE GARB OF REOPENING THE ASSESSMENT REVIEW WOULD TAKE PLAC E. ONE MUST TREAT THE CONCEPT OF CHANGE OF OPINION AS AN INBUILT TEST TO CHECK ABUSE OF POWER BY THE A.O. HENCE THE A.O. HAS POWER TO REOPEN PROVIDED THERE IS 'TANGIBLE MATERIAL' TO COME TO THE CONCLUSION THAT THERE IS ESCAPEMENT OF INCOME FROM ASSESSMENT. REASONS MUST HAVE A LIVE LINK WITH THE FORMATION OF THE BELIEF' 17.1. FURTHER PARA 32 AT PAGE 483 IN THE CASE OF S . RANJIT REDDY (SUPRA) READS AS FOLLOWS: I.T.A. NOS. 185 & 186/HYD/2016 285 & 286/HYD/2016 :- 18 -: 'SAME VIEW WAS TAKEN BY THE THIRD MEMBER MUMBAI BEN CH IN THE CASE OF TELCO DADAJEE DHACKAJEE LTD. VS. DY. CIT ITA.NO .4613/MUM/2005 DATED 12TH MAY 2010. FURTHER SAME VIEW WAS TAKEN B Y DELHI HIGH COURT IN THE CASE OF CIT VS. ORIENT CRAFTS LTD. (2013) 29 TA XMANN.COM 392 AND ALSO BY GUJARAT HIGH COURT IN THE CASE OF INDUCTOTHERM ( INDIA) (P) LTD. V. DY. CIT IN SPECIAL CIVIL APPLICATION 858 OF 2006 DATED 6.8.2012. FURTHER BOMBAY BENCH IN THE CASE OF DELTA AIRLINES INC. VS. ITO (INTERNATIONAL TAXATION) (2013) 33 TAXMANN.COM 192 (MUM.) 17.2. FURTHER AT PAGE 485 IT IS STATED AS FOLLOWS: 'WHEN THE MATTER REACHED TO THE TRIBUNAL THE LEARNE D JUDICIAL MEMBER TOOK E VIEW THAT THERE WAS NO FRESH MATERIAL TO SUP PORT THE FORMATION OF THE BELIEF OF THE ASSESSING OFFICER THAT INCOME CHARGEA BLE TO TAX HAD ESCAPED ASSESSMENT AND IN THE ABSENCE OF ANY FRESH TANGIBLE MATERIAL HE CAME TO THE CONCLUSION THAT IT WAS NOT PERMISSIBLE FOR THE ASSE SSING OFFICER TO REOPEN THE ASSESSMENT. THE LEARNED ACCOUNTANT MEMBER HOWEVER TOOK A DIFFERENT VIEW RELYING ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF RAJESLI JHAVERI STOCK BROKERS (P) LTD. (SUPRA) AND THE MATTER THER EFORE WAS REFERRED TO A THIRD MEMBER FOR RESOLVING INTER ALIA THE FOLLOWIN G POINT OF DIFFERENCE :- 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE PROC EEDINGS INITIATED BY THE A.O. U/S 147 IS LIABLE TO BE CONFIRMED OR QUASHED WHEN THERE WAS NO FRESH MATERIAL AVAILABLE WITH THE AO AND THE ASSESSMENT HAD BEEN COMPLETED ORIGINALLY U/ S 143(1).' THE THIRD MEMBER AGREED WITH THE VIEW TAKEN BY THE LEARNED JUDICIAL MEMBER RELYING MAINLY ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF KELVINATOR OF INDIA LTD. (SUPRA) AND EICHER LTD. 320 ITR 561. IT WAS HELD BY THE THIRD MEMBER THAT SECTION 147 APPLIES BOTH TO SECTION 143(1) AS WELL AS SECTION 1 43(3) AND THEREFORE EXCEPT TO THE EXTENT THAT A REASSESSMENT NOTICE ISSUED U/S 148 IN A CASE WHERE THE ORIGINAL ASSESSMENT WAS MADE II/ S 143(1) CANNOT BE CHALLENGED ON THE GROUND OF A MERE CHANGE OF OPINION IT IS OPEN TO AN ASSESSEE TO CHALLENGE THE NOTICE ON THE GROUND T HAT THERE IS NO REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. AS REGARDS THE DECISION OF HON 'BLE SUPREME COURT IN THE CASE OF RAJESLI LHAVERI STOCK BROKERS (P) LTD. (SUPRA) CITED BY THE REVENUE AND RELIED UPON BY- THE ACCOUNTANT MEMBER THE THIRD MEMBER HELD THAT THE SAME WAS APPLICABLE IN CASES WHERE THE RETURN WAS P ROCESSED U/ S 143( 1) BUT LATER ON NOTICE WAS ISSUED U/ S 148 AND THE ASSESSEE CHALLEN GES THE NOTICE ON THE GROUND THAT IT IS PROMPTED BY A MERE CHANGE OF OPINION. THE THIRD MEM BER THEN REFERRED TO THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF KELUINATOR OF INDIA LTD. (SUPRA) WHEREIN IT WAS HELD THAT THERE SHOULD BE 'TANGIBLE MATERIAL' TO CO ME TO THE CONCLUSION THAT INCOME HAD ESCAPED ASSESSMENT. RELYING ON THE SAID DECISION I T WAS HELD BY THE THIRD MEMBER THAT WHILE RESORTING TO SECTION 147 EVEN IN A CASE WHERE ONLY AN INTIMATION HAD BEEN ISSUED U/ S 143(1)(A) IT IS ESSENTIAL THAT THE ASSESSING OFFIC ER SHOULD HAVE BEFORE HIM TANGIBLE MATERIAL JUSTIFYING HIS REASON TO BELIEVE THAT INCO ME HAD ESCAPED ASSESSMENT. SINCE THERE WAS NO SUCH TANGIBLE MATERIAL BEFORE THE AO FROM WH ICH HE COULD ENTERTAIN THE BELIEF THAT INCOME OF THE ASSESSEE CHARGEABLE TO TAX HAD ESCAPE D ASSESSMENT THE THIRD MEMBER HELD I.T.A. NOS. 185 & 186/HYD/2016 285 & 286/HYD/2016 :- 19 -: THAT REASSESSMENT PROCEEDINGS INITIATED BY THE ASSE SSING OFFICER WERE LIABLE TO BE QUASHED ON THE GROUND THAT THERE WAS NO TANGIBLE MATERIAL B EFORE THE ASSESSING OFFICER EVEN THOUGH THE ASSESSMENT WAS COMPLETED ORIGINALLY U/ S. 143(1 ). IN OUR OPINION THE THIRD MEMBER DECISION OF THE TRIBUNAL IN THE CASE OF TELCO DADAJ EE DHACKJEE LTD. (SUPRA) IS SQUARELY APPLICABLE IN THE PRESENT CASE AND RESPECTFULLY FOL LOWING THE SAME WE HOLD THAT THE INITIATION OF REASSESSMENT PROCEEDINGS BY THE ASSES SING OFFICER ITSELF WAS BAD IN LAW AND THE REASSESSMENT COMPLETED IN PURSUANCE THEREOF IS LIABLE TO BE QUASHED BEING INVALID. WE ORDER ACCORDINGLY AND ALLOW GROUND NO.1 OF THE ASSE SSEE'S APPEAL. 18. TO CONCLUDE (I) THE RECORDING OF REASONS BEFORE THE ISSUE OF NO TICE UNDER SECTION 148 HAS ABSOLUTELY NO NEXUS WITH THE ASSESSMENT MADE. (II) THAT THE ASSESSMENT MADE UNDER SEC.143(3) CANN OT BE REOPENED UNDER SEC. 148 BEYOND PERIOD OF 4 YEARS AS THERE IS NO FA ILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL THE MATERI AL FACTS IN THE ORIGINAL ASSESSMENT ITSELF. (III) THE ASSESSING OFFICER HAD NO TANGIBLE MATERIA L TO COME TO THE CONCLUSION THAT THERE WAS ESCAPEMENT OF INCOME FROM THE ORIGINAL ASSESSMENT. (IV) THE REOPENING WAS ON WRONG FOUNDATION OF REASO NING OF THE FINANCIAL IMPLICATION BETWEEN THE ASSESSEE-COMPANY AND M/S. S ATYAM COMPUTER SERVICES LIMITED WHICH WAS NOT ESTABLISHED IN THE REASSESSMENT TO JUSTIFY THE REOPENING. (V) AS CAN BE SEEN FROM THE ASSESSMENT ORDER THE A SSESSMENT COMPLETED HAS NO RELATION AT ALL WITH THE REASONS FOR REOPENI NG. EVEN THOUGH ASSESSEE BELONGS TO SATYAM GROUP OF COMPANIES THER E IS NO EVIDENCE OF SIPHONING OF FUNDS OR ESCAPEMENT OF INCOME. WHAT TH E ASSESSING OFFICER HAS DONE IN THE ASSESSMENT IS DENIAL OF THE EXPLANA TIONS GIVEN BY THE ASSESSEE WITH REFERENCE TO VARIOUS INVESTMENTS MADE THROUGH THE BOOKS OF ACCOUNTS VARIOUS CREDITS AND LOANS OBTAINED AND AL SO ADDITION TO FIXED ASSETS ON THE REASON THAT THE EVIDENCES HAVE NOT BE EN FILED. THUS AS CAN BE SEEN FROM THE ORDER THERE IS NO NEXUS AT ALL WI TH REFERENCE TO THE REASONS FOR REOPENING AND THE ASSESSMENT COMPLETED. 19. HENCE THERE BEING NO NEXUS OR LIVE-LINK WITH T HE REASONS RECORDED AND THE 'FORMATION OF BELIEF TO COME TO A CONCLUSION TH AT THERE WAS ESCAPEMENT OF INCOME AND ALSO SINCE THE ASSESSMENT HAS BEEN RE OPENED BEYOND THE PERIOD OF 4 YEARS WHEN THERE IS NO FAILURE ON THE P ART OF THE ASSESSEE TO FULLY AND TRULY DISCLOSE ALL MATERIAL FACTS IN THE ORIGINAL ASSESSMENT ITSELF AND THERE BEING 'NO TANGIBLE MATERIAL' FOR THE REOP ENING OF THE ASSESSMENT THE CIT(A) ERRED IN CONFIRMING THE ORDER OF THE ASS ESSING OFFICER. WE THEREFORE HOLD THAT THE REOPENING OF THE JURISDICT ION UNDER SECTION 147 IS BAD IN LAW AND IS TO BE QUASHED. I.T.A. NOS. 185 & 186/HYD/2016 285 & 286/HYD/2016 :- 20 -: 11.2. RESPECTFULLY FOLLOWING THE ABOVE DECISION WH ICH APPLIES ON ALL FOURS WE HAVE NO HESITATION IN HOLDING THAT THE ASSESSMENT COMPLETED HAS NO NEXUS WITH THE REASONINGS GIVEN FO R REOPENING OF ASSESSMENT. ON THAT REASON PROCEEDINGS ARE HELD AS BAD IN LAW. 12. EVEN ON MERITS LD. CIT(A) HAS CONSIDERED THE LA W ON THE POINTS AND GAVE SUBSTANTIAL RELIEF ON MANY OF THE IS SUES ON WHICH REVENUE HAS COME IN APPEAL. WE DO NOT FIND AN Y MERIT IN THOSE GROUNDS RAISED BY REVENUE AS THOSE FINDINGS OF LD. CIT(A) ARE IN TUNE WITH THE FINDINGS OF THE ITAT IN VARIOUS CASES AND LAW ON THE ISSUE. NOT ONLY THAT ON THE ISSUES REFERRED TO THE AO FOR EXAMINATION AO HAS ALLOWED THE CLAIMS IN THE CONSEQUE NTIAL ORDER. THE ONLY MAJOR ISSUE CONTESTED IN ASSESSEES APPEAL IS WITH REFERENCE TO DISALLOWANCE OF THE COST OF THE ROADS AND FEES PAID TO HUDA. EVEN THOUGH AO RELIED ON THE AGREEMENT TO ST ATE THAT THE AGREEMENT WAS SUBSEQUENT TO THE LAYING OF THE ROAD AND THE AMOUNT CANNOT BE CLAIMED AS AN EXPENDITURE IN ASSESS EES BUSINESS ALONG WITH THE FEES PAID TO HUDA ON PERUSAL OF THE AGREEMENT WITH THE FOURTEEN LAND OWNING COMPANIES WHO GAVE 85.90 ACRES OUT OF THE TOTAL AREA OF 374 ACRES (24.96% ) FOR DEVELOPMENT IT WAS SPECIFIED THAT THE COST OF THE ROADS AND FEES PAID TO HUDA AND OTHER DEVELOPMENTAL ACTIVITIES ARE TO BE BORNE BY ASSESSEE-COMPANY. WE DO NOT FIND ANY REASON TO DISA LLOW THE EXPENDITURE WHEN ASSESSEES PROJECT ON 1/4 TH LAND IS USING THOSE LANDS DEVELOPED BY LAND OWNING COMPANIES AS WELL AS OTHER COMPANIES. THE TOTAL COST INCURRED BY THEM WAS REIMBU RSED BY ASSESSEE TO AN EXTENT OF 25% WHICH IS SAME AS THAT OF LA ND GIVEN FOR DEVELOPMENT TO ASSESSEE. I.T.A. NOS. 185 & 186/HYD/2016 285 & 286/HYD/2016 :- 21 -: 13. ON PERUSING THESE FACTS WHICH ARE PLACED ON REC ORD DURING THE COURSE OF HEARING WE DO NOT FIND ANY MER IT IN THE ORDER OF THE AO AND CIT(A) IN DISALLOWING THE EXPENDITURE B Y READING IN BETWEEN THE LINES OF THE AGREEMENT. THE AGREEMENT SP ECIFICALLY PROVIDES FOR BEARING THE COST OF ROADS AND DEVELOPME NT FEE PAYABLE TO HUDA AND SO ASSESSEE REIMBURSED THE COST AND ALSO F EES PAID TO HUDA. THE LD. CIT(A) ALLOWED THE COST OF FEES OF HUD A PAID DIRECTLY BY ASSESSEE BUT DID NOT ALLOW THE AMOUNT OF FEE REIMBURSED TO THE LAND OWNING COMPANIES ON THE REASO N THAT THEY PAID THE HUDA FEES MUCH EARLIER TO THE INCORPORATION O F ASSESSEE- COMPANY. IN FACT ASSESSEE-COMPANY WAS FLOATED FOR COMPLETING THE PROJECT WHICH WAS APPROVED IN VARIOUS INDIVIDUAL COMPANIES AND AGREEMENTS SPECIFICALLY PROVIDE FOR THE COST TO BE BORNE BY ASSESSEE-COMPANY. ACCORDINGLY IT HAS MADE DEBIT ENT RIES IN THE BOOKS OF ACCOUNT CREDITING THOSE COMPANIES TO AN EXTE NT OF 25% OF THE AMOUNT OF COST ON ROADS AND THE HUDA FEES PAID. CONSIDERING THE AGREEMENTS AND THE ENTRIES IN THE BOOKS OF ACCOUNT W E ARE OF THE OPINION THAT THIS EXPENDITURE IS ALLOWABLE AS PART OF PROJECT COST. WE ARE ALSO NOT SURE HOW THE EXPENDITURE DEBITE D TO PROJECT COST COULD BE DISALLOWED AND BROUGHT TO TAX WHEN THE P ROJECT IS NOT COMPLETE AND ASSESSEE WAS ESTIMATING A PROPORTIONATE I NCOME TO THE EXTENT OF THE PROJECT COMPLETED. IN VIEW OF THAT WE ARE NOT IN A POSITION TO APPROVE THE ORDERS OF THE AO EVEN ON THE MER ITS OF THE ADDITIONS MADE. 14. BE THAT AS IT MAY THE ISSUES ON MERIT WILL BECOME ACADEMIC SINCE WE HAVE ALREADY GIVEN A FINDING THAT THE PROCEEDINGS INITIATED ITSELF ARE BAD IN LAW AND THE AS SESSMENT COMPLETED WITHOUT MAKING ANY ADDITION ON THE REASONS FO R I.T.A. NOS. 185 & 186/HYD/2016 285 & 286/HYD/2016 :- 22 -: REOPENING BEING BAD IN LAW. IN VIEW OF THAT ASSESSE ES GROUND NOS. 1 & 2 ARE ALLOWED IN BOTH THE YEARS AND OTHER GROUND S ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. REVENUES APPEA LS ARE DISMISSED. 15. BEFORE PARTING WE WOULD LIKE TO PLACE ON RECORD OUR DISPLEASURE ON THE CONDUCT OF MR. B.V. GOPINATH CIT W HO WAS POSTED AS DEPARTMENTAL REPRESENTATIVE FOR A WEEK AND W E DIRECT THE REGISTRY TO FORWARD ONE COPY EACH TO REVENUE SECR ETARY & CHAIRMAN CBDT SO THAT THEY ASSESS THE PROBLEMS ARISI NG ON ACCOUNT OF POSTING DRS ON TEMPORARY BASIS WHO DESPITE BEING SENIOR OFFICERS OPENLY ADMIT THAT THEY HAVE NO KNOWLE DGE OF CERTAIN BRANCHES OF TAX LAWS (PARTICULARLY TRANSFER PRICING P ROVISIONS) AND SEEK ADJOURNMENTS UNDAUNTINGLY AND WHEN BENCH SHOWS I TS DISPLEASURE THEY UNSCRUPULOUSLY GO TO THE EXTENT OF REC USING TO APPEAR BEFORE THAT BENCH DISRUPTING COURT PROCEEDINGS. 16. TO SUM-UP ASSESSEES APPEALS ARE ALLOWED AND R EVENUES APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 30 TH SEPTEMBER 2016 SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMB ER HYDERABAD DATED 30 TH SEPTEMBER 2016 TNMM I.T.A. NOS. 185 & 186/HYD/2016 285 & 286/HYD/2016 :- 23 -: COPY TO : 1. M/S.HILL COUNTY PROPERTIES LTD. (FORMERLY M/S. MAYTAS PROPERTIES LTD. ) HYDERABAD. C/O. SRI S. RAMA RAO ADVOCATE FLAT NO. 102 SHRIYAS ELEGANCE 3-6-643 STREET NO. 9 HIMAYAT NAGAR HYDERABAD. 2. ADDL. COMMISSIONER OF INCOME TAX CENTRAL RANGE- 3 HYDERABAD. 3. ASST. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE -3(2) HYDERABAD. 4. CIT (APPEALS)-11 HYDERABAD. 5. PR.CIT (CENTRAL) HYDERABAD. 6. D.R. ITAT HYDERABAD. 7. GUARD FILE.