M/s SCL Infotech Limited,, Hyderabad v. Dy.CIT, Central Circle-2,, Hyderabad

ITA 641/HYD/2013 | 2003-2004
Pronouncement Date: 30-11-2017 | Result: Allowed

Appeal Details

RSA Number 64122514 RSA 2013
Assessee PAN AADCS2196P
Bench Hyderabad
Appeal Number ITA 641/HYD/2013
Duration Of Justice 4 year(s) 6 month(s) 28 day(s)
Appellant M/s SCL Infotech Limited,, Hyderabad
Respondent Dy.CIT, Central Circle-2,, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 30-11-2017
Appeal Filed By Assessee
Tags Issue relating to noitce u/s 148 and consequent application of sections 153A to 153C of the Act
Order Result Allowed
Bench Allotted A
Tribunal Order Date 30-11-2017
Date Of Final Hearing 12-10-2017
Next Hearing Date 12-10-2017
First Hearing Date 12-10-2017
Assessment Year 2003-2004
Appeal Filed On 02-05-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI D. MANMOHAN VICE PRESIDENT AND SHRI S. RIFAUR RAH MAN ACCOUNTANT MEMBER ITA NO . 641/HYD/2013 (AY 2003 - 2004 ) M/S. SCL INFRATECH LIMITED HYDERABAD. PAN:AADCS2196P VS. DY. CIT CENTRAL CIRCLE - 2 AAYAKAR BHAVAN BASHEERBAGH HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE: SHRI A. SRINIVAS FOR REVENUE : SHRI RAJEEV BENJWAL DR DATE OF HEARING : 02.11.2017 DATE OF PRONOUNCEMENT : 30 .11 .2017 ORDER PER D. MANMOHAN VP : THIS APPEAL IS FILED AT THE INSTANCE OF ASSESSEE - COMPANY AND IT IS DIRECTED AGAINST ORDER PASSED BY LD. CIT(A) - I HYDERABAD. THOUGH THE ASSESSEE - COMPANY HAS RAISED SIX GROUNDS BEFORE US AT THE TIME OF HEARING LD COUNSEL FOR THE ASSESSEE DID NOT PRESS GROUND NO.2; GROUNDS NO. 1 AND 6 ARE GENERAL IN NATURE. WE THEREFORE REJECT THOSE GROUNDS AND PROCEED TO CONSIDER GROUNDS NO.2 TO 5. 2. ASSESSEE - COMPANY IS ENGAGED IN INFRASTRUCTURE DEVELOPMENT PROJECTS. FOR THE YE AR UNDER CONSIDERATION ORIGINAL ASSESSMENT WAS COMPLETED ON A TOTAL INCOME OF RS. 2 08 20 880/ - . HOWEVER CONSEQUENT TO SEARCH AND SEIZURE O PERATION ON THE PREMISES OF MANAGING DIRECTOR (MD) A.O. SOUGHT TO REOPEN THE ASSESSMENT BY ISSUING NOTICE U/S 148 OF THE ACT. IT MAY BE NOTICED THAT ACCORDING TO INVESTIGATION WING SOME PAPERS PERTAINING TO ASSESSEE - COMPANY WERE FOUND AT THE RESIDENCE OF MD CONCERNING DETAILS FOR PURCHASE OF PROPERTY. SINCE THE MATTER RELATE S TO A.Y. 2003 - 2004 A NOTICE WAS ISSUE D TO ASSESSEE - COMPANY BY TAKING PRIOR APPROVAL OF CIT (CENTRAL). 3. IN RESPONSE TO THE SAID NOTICE ASSESSEE - COMPANY CONTENDED THAT THE SAID PAPERS HAVING BEEN FOUND IN THE COURSE OF SEARCH AT THE RESIDENCE OF MD ASSESSMENT 2 CANNOT BE REOPENED FOR THE YEAR UNDER CONSIDERATION U/S 148 OF THE ACT. A.O. HOWEVER OBSERVED THAT ON ACCOUNT OF FRESH EVI DE NCE FOUND AT THE TIME OF SEARCH REOPENING OF ASSESSMENT BY TAKING PRIOR APPROVAL OF CIT (CENTRAL) IS IN ACCORDANCE WITH LAW AND THUS HE PROCEEDED TO CONSIDER THE MAIN ISSUES ON MERITS. A NOTICE U/S 143(2) OF THE ACT WAS ISSUED ALONG WITH THE COPY OF THE SEIZED DOCUMENTS AND ASSESSEE - COMPANY WAS ASKED TO SUBMIT THEIR OBJECTIONS. AS PER PAGE 13 OF THE SEIZED DOCUMENTS IDENTIFIED AS A/DVN/5 THERE WERE CERTAIN F INANCIAL TRANSACTIONS SHOWING PAYMENTS BOTH IN CASH AND CHEQUE OUT OF WHICH THERE WAS A PAYMENT OF RS. 1 CR IN CASH PRIOR TO 31.3.2003 . IN THE ASSESSMENT ORDER THE SAID DOCUMENT WAS REPRODUCED TO HIGHLIGHT THAT A CASH PAYMENT IS RECORDED PRIOR TO 26.03. 2003 IN SHRI VENKAT AKKINANIS ACCOUNT. SHRI D.V. NAIDU MD OF ASSESSEE - COMPANY HAS STATED ON OATH THAT THE ENTIRE DOCUMENT BELONGS TO THE FINANCIAL TRANSACTION I.E. PAYMENT MADE TO SHRI VENKAT AKKINENI TOWARDS PURCHASE OF PROPERTY SITUATED AT ROAD NO.1 BANJARA HILLS HYDERABAD. IN THE STATEMENT IT WAS ADMITTED THAT AN AGREEMENT WAS ENTERED INTO BETWEEN SHRI D. SRINIVAS AND SHRI AKKINANI NAGESWARA RAO ON 20.03.2003 WHEREBY THE ABOVE PROPERTY WAS AGREED TO BE PURCHASED BY ASSESSEE - COMPANY AT RS. 2 000/ - PER SQ FT WITH A SUBJECTIVE CONDITION OF RE - FIXING THE RATE ON THE DATE OF BUYING AND ON BUYING ADDITIONAL SPACE AREA. SUBSEQUENTLY ON PARTITION THE ABOVE PROPERTY WAS BEQUEATHED TO SHRI VENKAT AKKINENI WITH WHOM ASSESSEE - COMPANY FINALIZED THE SALE TR ANSACTION. AS PER THE REVISED AGREEMENT OF SALE THE RATE WAS FIXED AT RS. 1 400/ - PER SQ FT. THE MD SUBMITTED THAT HE DOES NOT HAVE ANY DETAILS REGARDING THE SOURCE WITH REGARD TO PAYMENT OF CASH OF RS. 10 LAKHS ON 18.05.2004 AND ACCORDINGLY AGREED TO OF FER IT AS ADDITIONAL INCOME FOR FY 2004 - 05. W ITH REGARD TO NOTING OF CASH OF RS. 1 CR IT WAS ADMITTED THAT IT PERTAINS TO A PERIOD ON OR BEFORE 26.03.2002. 4. SINCE SHRI D.V. NAIDU ADMITTED THAT THE PAYMENTS WERE MADE TO SHRI VENKAT AKKINENI TOWARDS PURC HASE OF FLAT BUT THE SOURCE OF PAYMENT OF RS. 1 CR HAVING NOT BEEN EXPLAINED THE SAME WAS ADDED TO THE TOTAL INCOME OF ASSESSEE - COMPANY AS UNEXPLAINED INVESTMENT. 5. ASSESSEE HAS RAISED A TECHNICAL PLEA I.E. ISSUING NOTICE U/S 148 OF THE ACT ON THE GROUND THAT ANY PROCEEDINGS CONSEQUENT TO SEARCH AND SEIZURE OPERATION SHOULD BE UNDER THE PROVISIONS OF SECTION 153A OF THE ACT AND IN FACT ASSESSMENT PROCEEDINGS 3 U/S 153A HAVING BEEN INITIATED FOR A.YS 2004 - 05 TO 2009 - 10 REOPENING OF ASSESSMENT BY ISSUING A NOTICE U/S 148 OF THE ACT FOR THE A.Y. 2004 - 05 IS AGAINST THE STATUTE. 6. A.O. OBSERVED THAT THE PROCEEDINGS INITIATED U/S 148 OF THE ACT IS A SEPARATE PROCEEDING ON THE BASIS OF SEIZED MATERIAL FOUND AND GATHERED DURING THE COURSE OF SEARCH AND THUS THE OBJECTION RAISED BY ASSESSEE - COMPANY WAS NOT ACCEPTED. IN THIS REGARD HE ALSO OBSERVED THAT THERE WAS A TIME LIMIT FOR REOPENING OF ASSESSMENT AND THEREFORE A.O. HAD TAKEN PR IOR APPROVAL OF CIT (CENTRAL) TO INITIATE VALID RE - ASSESSMENT PROCEEDINGS. IT WAS REITERATED THAT THE DOCUMENT SEIZED CLEARLY REVEALS THAT A SUM OF RS. 1 CR WAS PAID PRIOR TO 26.03.2003 BUT THE SOURCES HAVING BEEN NOT EXPLAINED THE SAID AMOUNT DESERVES T O BE TREATED AS UNEXPLAINED INVESTMENT IN THE HANDS OF ASSESSEE - COMPANY AND ASSESSMENT WAS COMPLETED ACCORDINGLY. 7. AGGRIEVED ASSESSEE CONTENDED BEFORE LD. CIT(A) THAT REOPENING OF ASSESSMENT IS BAD IN LAW SINCE THE PROCEEDINGS WERE INITIATED CONSEQUEN T TO SEARCH AND SEIZURE OPERATION AT THE RESIDENTIAL PREMISES OF MD OF ASSESSEE - COMPANY. IT WAS ALSO CONTENDED THAT PROPER COURSE OF ACTION IS TO ISSUE A NOTICE U/S 1 5 3 OF THE INCOME TAX ACT 1961 AS THE ASSESSEE WOULD COME WITHIN THE AMBIT OF DEFINITION OF ANY OTHER PERSON. IN OTHER WORDS THE PLEA OF ASSESSEE WAS THAT A.O. OUGHT TO HAVE PASSED ON THE INFORMATION TO THE JURISDICTIONAL A.O. IF ASSESSEE WAS NOT A PART OF THE SEARCH PROCEEDINGS AND HE W HOULD NOT HAVE JURISDICTION OTHERWISE. IT WAS ALSO CONTENDED THAT ASSESSEE HAVING FURNISHED ALL MATERIAL FACTS DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS REOPENING OF ASSESSMENT BY ISSUING A NOTICE U/S 148 OF THE ACT IS BAD IN LAW. WITH REGARD TO ADDITION OF RS. 1 CR TOWARDS UNACCOUNTED INVEST MENT IT WAS CONTENDED THAT THE SAME DO NOT PERTAIN TO ASSESSEE. 8. LD. CIT(A) OBSERVED THAT PROVISIONS OF SECTION 153A OF THE ACT COVERS SIX YEARS WHEREAS A.Y. 2003 - 04 IS BEYOND THE PERIOD OF SIX YEARS AS PRESCRIBED U/S 153A OF THE A CT. A.O. HAVING NOTI CED THAT ASSESSEE DID NOT TRULY AND FULLY DISCLOSE THE PARTICULARS OF SUCH ON MONEY IN THE RETURN OF INCOME A NOTICE WAS ISSUED U/S 148 OF THE ACT FOR A.Y. 2003 - 04 AND THUS IT WAS VERY MUCH WITHIN LAW. 9. THE NEXT CONTENTION OF ASSESSEE WAS ONCE THE PRO VISIONS OF SECTION 153A OF THE ACT ARE INVOKED NO RECOURSE CAN BE TAKEN TO THE PROVISIONS OF SECTION 147 OF THE ACT. 4 IN THIS REGARD LD. CIT(A) OBSERVED THAT AS PER PROVISIONS OF SECTION 153A OF THE ACT ASSESSMENTS FOR THE IMMEDIATELY PRECEDING SIX YEAR S ONLY GET ABATED AND THIS WOULD NOT MEAN THAT DESPITE TIME BEING AVAILABLE NO ACTION U/S 147 CAN BE TAKEN FOR AN ASSESSMENT YEAR BEYOND THE SAID PERIOD OF SIX YEARS. HE ALSO REFERRED TO DECISIONS OF HONBLE MADHYA PRADESH HIGH COURT AND HONBLE KERALA H IGH COURT TO OBSERVE THAT IN THOSE CASES THE HONBLE COURTS HAVE NOT EXPRESSED ANY RESERVATION REGARDING REOPENING OF ASSESSMENT OF AN ASSESSMENT BEYOND THE SAID SIX PRECEDING AYS. HE THUS CONCLUDED THAT REOPENING OF ASSESSMENT IS IN ACCORDANCE WITH LAW. 10. WITH REGARD TO ADDITION MADE BY A.O. ASSESSEE CONTENDED THAT THAT THERE IS NO INDICATION THAT THE PAYMENT WAS MADE DURING THE PREVIOUS YEAR RELEVANT TO A.Y. UNDER CONSIDERATION IN WHICH EVENT ADDITION CANNOT BE MADE. HOWEVER LD. CIT(A) WAS OF THE OP INION THAT MD OF ASSESSEE - COMPANY ADMITTED IN HIS SWORN STATEMENT THAT THE SAID AMOUNT WAS PAID PRIOR TO 26.03.2003. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT PROPERTY HAS BEEN PURCHASED BY ASSESSEE - COMPANY. THEREFORE PAYMENT OF RS. 1 CR RECORDED IN THE DOCUMENT PERTAINS TO THE AMOUNT PAID BY ASSESSEE - COMPANY AND HENCE THE SAME DESERVES TO BE ADDED. WITH REGARD TO THE CLAIM THAT THE NOTICE DOES NOT PERTAIN TO ASSESSEE - COMPANY LD. CIT(A) OBSERVED AS UNDER: - 08.0. I HAVE GONE THROUGH THE FACTS O F THE CASE AND THE SUBMISSIONS OF THE APPELLANT. FROM THE ASSESSMENT ORDER IT IS SEEN THAT IT WAS FOUND IN THE COURSE OF SEARCH THAT THE IMPUGNED PROPERTY WAS PURCHASED BY THE APPELLANT COMPANY AS PER THE TERMS AND CONDITIONS. THOUGH SHRI D.V. NAIDU IN HIS STATEMENT HAD STATED THAT THE PAYMENTS RECORDED ON PAGE NO.13 OF ANNEXURE A/DVN/5 RELATED TO THE PAYMENTS MADE TO SHRI VENKAT AKKINENI AS PER THE AGREEMENT ENTERED INTO BETWEEN HIM AND SHRI D. SRINIVAS ON 20.3.2003 IT CAN BE SEEN FROM THE COPY OF AG REEMENT OF SALE DATED 20.3.2003 THAT THE SAME IS NOT A REGISTERED DOCUMENT. LIKEWISE EVEN THE AGREEMENT OF SALE DATED 19.1.2004 BETWEEN THEM ALSO IS NOT A REGISTERED DOCUMENT. THEREFORE EVEN IF SHRI D. SRINIVAS HAS BEEN MENTIONED AS THE PURCHASER IN THOSE UNREGISTERED AGREEMENTS OF SALE SUCH DOCUMENTS ITSELF CANNOT ESTABLISH THAT THE PROPERTY WAS NOT TO BE PURCHASED BY THE APPELLANT COMPANY BUT BY SHRI D. SRINIVAS ONLY IN HIS INDIVIDUAL CAPACITY AND FURTHER THAT THE FINAL REGISTRATION OF PROPERTY WA S TO BE DONE IN FAVOUR OF SHRI D. SRINIVAS ONLY. ON THE OTHER HAND THE SEIZED DOCUMENT ITSELF SHOWS THAT SUBSTANTIAL PAYMENTS OUT OF THE TOTAL CONSIDERATION WERE PAID BY THE APPELLANT COMPANY THROUGH PAY ORDER AND CHEQUE. THEREFORE I AM OF THE VIEW THA T THERE IS NO MERIT IN THE CONTENTION OF THE APPELLANT THAT THE DOCUMENT AND THE NOTINGS THEREIN DO NOT PERTAIN TO THE APPELLANT - COMPANY. 11. IT WAS ALSO HIGHLIGHTED THAT MAJORITY OF THE ENTRIES IN THE SEIZED DOCUMENT WERE ADMITTED AS CORRECT AND THUS TH E REMAINING PART SHOULD ALSO BE TREATED AS TRUE AND CORRECT AND IT WAS INCUMBENT ON THE ASSESSEE TO EXPLAIN ENTRY OF RS. 1 CR IN THE 5 ABSENCE OF WHICH ADDITION IS CALLED FOR U/S 69 OF THE ACT. THE LD. CIT(A) UPHELD THE ORDER OF A.O. BY STATING THAT THE E NTRIES IN THE SEIZED PAPER ARE RECORDED CHRONOLOGICALLY FROM 26.03.2003 AND HENCE THE PAYMENT RECORDED PRIOR TO THE SAID DATE AS ADMITTED BY MD OF THE ASSESSEE - COMPANY SHOULD BE TREATED AS PAYMENT MADE DURING THE PREVIOUS YEAR RELEVANT TO A.Y. 2003 - 04. SINCE THE INITIAL AGREEMENT HAS BEEN ENTERED INTO ON 20.03.2003 LD. CIT(A) CONCLUDED THAT THE PAYMENT OF RS. 1 CR TOOK PLACE DURING THE ASSESSMENT YEAR 2003 - 2004. HE THUS CONFIRMED THE ACTION OF A.O. FURTHER AGGRIEVED ASSESSEE IS IN APPEAL BEFORE THE T RIBUNAL. 12. LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SEARCH PROCEEDINGS WERE INITIATED ON 18.11.2009 WHEREAS ASSESSMENT SOUGHT TO BE REOPENED IS FOR A.Y. 2003 - 04 OVERLOOKING THE FACT THAT U/SS 153A TO 153C OF THE ACT THE ASSESSING OFFICER IS COMPETE NT TO MAKE ASSESSMENTS FOR 6 YEARS PRIOR TO THE DATE OF SEARCH. IN OTHER WORDS NOTICE ISSUED U/S 148 IS BAD IN LAW. LD COUNSEL FOR THE ASSESSEE ADVERTED OUR ATTENTION TO PAGE 9 OF THE PAPER BOOK TO SUBMIT THAT IN SO FAR AS A.Y. 2003 - 04 IS CONCERNED ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT WHEREIN THE DETAILS WITH REGARD TO THE AGREEMENT OF SALE ON PAYMENT THEREOF WERE LOOKED INTO (PAGES 3 AND 5 OF THE PAPER BOOK) AND ACCEPTED SOURCE OF INVESTMENT IN WHICH EVENT RE - ASSESSMENT PROCEEDINGS ARE BAD IN LAW SINCE THERE IS NO SPECIFIC INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. LD COUNSEL FOR THE ASSESSEE ALSO REFERRED TO PAGES 15 16 AND 19 OF THE PAPER BOOK TO SUBMIT THAT NOWHERE IT WAS SPECIFIED BY SHRI D.V. NAIDU THAT A SUM OF RS. 1 CR IF ANY WAS PAID BY THE ASSESSEE - COMPANY. IN FACT A SUM OF RS. 10 LAKHS WAS ADMITTED AS ADDITIONAL INCOME IN THE HANDS OF SHRI D. SRINIVAS WHICH WAS ACCEPTED BY THE TAX AUTHORITIES. TH E R E I S NOTHING ON RECORD TO INDICATE THAT A SUM OF RS. 1 CR WAS AN U NDISCLOSED INVESTMENT OF THE ASSESSEE - COMPANY AND IN THE ABSENCE OF FORMING ANY OPINION F O R REOPENING ASSESSMENT THE RE - ASSESSMENT PROCEEDINGS ARE BAD IN LAW IN THE LIGHT OF THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF VARSHABEN SANATBH AI PATEL VS. ITO (282 CTR 75) WHEREIN THE COURT OBSERVED THAT FOR THE PURPOSE OF REOPENING OF ASSESSMENT THE A.O. CANNOT PLACE RELIANCE UPON THE MATERIAL FROM AN EXTERNAL SOURCE WHICH DOES NOT FORM PART OF THE RECORD AND IT WAS FURTHER OBSERVED THAT A STAT EMENT GIVEN BEFORE THE DGIT (INV.) CANNOT BE UTILISED FOR FORMING A BELIEF THAT THERE WAS ESCAPEMENT OF INCOME CHARGEABLE TO TAX AND THE SUBSEQUENT REASONS WOULD NOT MAKE THE PROCEEDINGS VALID. 6 13. ON MERITS IT WAS SUBMITTED THAT THE LO O SE PAPER WAS FOUND IN THE PREMISES OF SHRI D.V. NAIDU MANAGING DIRECTOR OF THE ASSESSEE - COMPANY AND IT WAS SEIZED AND PLACED ON RECORD AS DVN INDICATING D.V. NAIDU . T HUS IT CANNOT BE TREATED AS DOCUMENT FOUND IN THE PREMISES OF THE ASSESSEE - COMPANY. EVEN DURING THE COURSE OF EXAMINATION OF SHRI D.V. NAIDU NO SPECIFIC QUESTION WAS ASKED WITH REGARD TO RS. 1 CR AND THE ASSESSEE - COMPANY WAS NOT INVOLVED - BY OBTAINING THE SIGNATURE OF THE AUTHORISED PERSON OF THE ASSESSEE - COMPANY. IN FACT W H I L E EXPLAINING THE TRANSACTIONS SHRI D.V. NAIDU STATED THAT CERTAIN AMOUNTS WERE RECORDED IN THE BOOKS OF M/S. SCL INFRATECH LTD. AND CERTAIN AMOUNTS WERE PAID BY OTHERS AND ACCORDINGLY OFFERED TO TAX A SUM OF RS. 10 LAKHS IN THE INDIVIDUAL HANDS OF SHRI D. SRININVAS BUT TH ERE IS NO SPECIFIC QUESTION WITH REGARD TO THE SOURCE OF RS. 1 CR AND WHETHER IT WAS AN AMOUNT PAID BY THE MANAGING DIRECTOR FROM HIS INDIVIDUAL SOURCE OR THE AMOUNT WAS PAID BY THE COMPANY. THUS I F AT ALL IT HAS TO BE ADDED IT WOULD HAVE BEEN ADDED IN THE INDIVIDUAL HANDS. THUS REVENUE FAILED IN PROVING THAT A SUM OF RS. 1 CR WAS ACTUALLY PAID BY THE ASSESSEE - COMPANY. RELIANCE WAS PLACED UPON THE DECISION OF THE ITAT B BENCH HYDERABAD IN THE CASE OF G. MAHESH BABU VS. DCIT (ITA NOS. 256/HYD/2015 A ND BATCH DATED 27.11.2015) WHEREIN THE BENCH OBSERVED THAT BASED ON A LOOSE SHEET FOUND IN THE HANDS OF A THIRD PARTY WHICH CONTAINS CERTAIN PAYMENTS MADE TO SOME PERSONS AN ADDITION CANNOT BE MADE IN THE ABSENCE OF ANY OTHER MATERIAL / EVIDENCE TO DEMONS TRATE THAT CASH PAYMENT WAS ACTUALLY MADE BY THE ASSESSEE. 14. ON THE OTHER HAND LD DEPARTMENTAL REPRESENTATIVE STRONGLY RELIED UPON THE ORDERS PASSED BY THE TAX AUTHORITIES. SINCE IT EMANATES FROM SEARCH AND SEIZURE PROCEEDINGS AND CONSEQUENT REOPENING OF ASSESSMENT THE BENCH WANTED TO VERIFY THE ASSESSMENT RECORD BUT THE LD DR DID NOT OBTAIN THE ASSESSMENT RECORD THOUGH AS PER THE CBDT DIRECTIONS IT IS THE DUTY OF THE ASSESSING OFFICER TO FORWARD A NOTE AND ASSESSMENT RECORD AND EQUALLY I T I S T H E DUTY OF THE L D DR TO OBTAIN THE ASSESSMENT RECORD PARTICULARLY WHEN IT PERTAINS TO FACTUAL VERIFICATION OF CERTAIN DETAILS SUCH AS THE NAME UNDER WHICH THE SEARCH AND SEIZURE PROCEEDINGS WERE INITIATED THE RELEVANCE OF DVN IN THE SWORN STATEMENT OBTAINED FROM THE MA NAGING DIRECTOR OF THE ASSESSEE - COMPANY WHETHER IT IS THE DOCUMENT SEIZED IN THE INDIVIDUAL CAPACITY 7 OF THE MANAGING DIRECTOR OR FOR AND ON BEHALF OF THE ASSESSEE - COMPANY AND ALSO TO VERIFY FURTHER DETAILS. 15. THE CASE WAS ADJOURNED FROM TIME TO TIM E SINCE 2013. THE RECORD INDICATES THAT THE CASE WAS ADJOURNED ON SEVERAL OCCASIONS AT THE REQUEST OF EITHER THE ASSESSEE OR THE REVENUE AND IN FACT ON 20.06.2016 THE DEPARTMENTAL REPRESENTATIVE SOUGHT ADJOURNMENT ON THE GROUND THAT HE WOULD LIKE TO FILE THE EVIDENCE CONNECTING TO DOCUMENTS. THE ASSESSMENT RECORD WAS NOT AVAILABLE TO OPPOSE THE CLAIM OF THE LD COUNSEL FOR THE ASSESSEE WITH REGARD TO SEARCH AND SEIZURE PROCEEDINGS. THE FACT REMAINS THAT THERE IS NO REPORT FROM THE AS SESSING OFFICER NO PANCHANAMA ON RECORD AND IT IS NOT KNOWN A S T O WHETHER THE SEIZURE IS IN THE NAME OF M/S. SCL INFRATECH LTD. OR SEARCH AND SEIZURE WAS CONDUCTED IN THE NAME OF MANAGING DIRECTOR OF THE ASSESSEE - COMPANY. LD DR MERELY RELIED UPON PAGE 4 OF THE ASSESSMENT ORDER T O SUBMIT THAT THE SEARCH MIGHT HAVE TAKEN PLACE IN THE NAME OF THE ASSESSEE - COMPANY. 16. HOWEVER VIDE WRITTEN SUBMISSIONS DATED 12.10.2017 LD DR SUBMITTED THAT THE SEARCH AND SEIZURE OPERATIONS WERE CONDUCTED IN THE CASE OF MA NAGING DIRECTOR OF THE ASSESSEE - COMPANY AND DURING THE COURSE OF SEARCH PROCEEDINGS A DOCUMENT WAS FOUND IN THE PREMISES OF THE MANAGING DIRECTOR WHICH INDICATES THAT THE ASSESSEE - COMPANY PAID A SUM OF RS. 1 CR TO SHRI VENKATA AKKINENI IN CASH AND A STATEM ENT OF MANAGING DIRECTOR OF THE ASSESSEE - COMPANY SHOWS THAT HE HAS ACCEPTED THAT PAYMENT OF RS. 1 CR PERTAINS TO THE PERIOD ON OR BEFORE 26.03.2003. IN FACT THE MANAGING DIRECTOR ACCEPTED THAT THE CASH PAYMENT SHOWN ON 18.04.2004 FOR A SUM OF RS. 10 LAKH S AS PER THE SAME SEIZED DOCUMENT WAS OFFERED TO TAX AS ADDITIONAL INCOME IN THE HANDS OF HIS SON. HE ALSO SUBMITTED THAT THE INITIATION OF PROCEEDINGS U/S 148 OF THE ACT WITH RESPECT TO AN ASSESSMENT YEAR FALL I N G BEYOND THE PERIOD OF 6 YEARS IS VALID IN LAW IN THE LIGHT OF THE DECISION RELIED UPON BY THE LD. CIT(A). HE ALSO RELIED UPON A DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF PRAFUL CHUNILAL PATE VS. ACIT (236 ITR 832) (GUJ.) TO SUBMIT THAT REASON TO BELIEVE C A N N O T M E A N THAT THE A.O SHOULD HAVE FI NALLY ASCERTAINED THE FACT BY A LEGAL EVIDENCE SO LONG AS THE A.O BELIEVES FROM ANY EXAMINATION HE MAKES AND FROM ANY INFORMATION HE RECEIVED HE CAN ASSUME JURISDICTION U/S 148 OF THE ACT. 8 17. THE BENCH WANTED TO KNOW AS TO WHETHER THE SUM OF RS. 10 LAK HS WAS OFFERED IN THE INDIVIDUAL HANDS OF SHRI SRINIVAS AND WHETHER IT IS ACCEPTED AS SUCH AND SIMILARLY WHETHER THE SUM OF RS. 1 CR WAS PAID BY THE COMPANY OR BY ANY OTHER PERSON AND IF IT IS PAID BY THE MANAGING DIRECTOR OR SOMEONE ELSE ON BEHALF OF TH E ASSESSEE - COMPANY WHETHER ANY PROCEEDINGS WERE INITIATED THEREIN. NO SUCH EVIDENCE COULD BE BROUGHT ON RECORD AND AT THE COST OF REPETITION IT MAY BE STATED THAT NO REPORT WAS OBTAINED FROM THE ASSESSING OFFICER. 18. JOINING THE ISSUE LD COUNSEL APPEAR ING FOR THE ASSESSEE SUBMITTED THAT THE DOCUMENT DVN SHOWS THAT IT IS NOT A DOCUMENT OF M/S. SCL INFRATECH LTD. AND HENCE PRESUMPTION U/S 132(4A) OF THE ACT DOES NOT APPLY. 19. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE RECORD. THE PLEA OF THE ASSESSEE ALL THROUGH WAS THAT NO PAYMENT WAS MADE BY THE ASSESSEE - COMPANY DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. THE LOOSE S HEET WAS OBTAINED IN THE RESIDENTIAL PREMISES OF SHRI D.V. NAIDU WHICH DOES NOT INDICATE THAT THE ASSESSEE - COMPANY MADE A PAYMENT OF RS. 1 CR. IN FACT IN THE SAME SHEET ANOTHER SUM OF RS. 10 LAKHS WAS SHOWN TO HAVE BEEN PAID TO THE SELLER BUT IT WAS OFFE RED TO TAX IN THE HANDS OF SHRI D. SRINIVAS AND NEITHER ANY COMMENT WAS MADE BY THE ASSESSING OFFICER IN THAT R E G A R D NOR ADDED IN THE HANDS OF THE ASSESSEE - COMPANY WHICH IS AN INDICATION THAT THE FIGURES MENTIONED IN THE LOOSE SHEET NEED NOT AUTOMATICALLY BE TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE. IN OTHER WORDS IT CANNOT BE TREATED AS AN INCRIMINATING MATERIAL SO AS TO INITIATE PROCEEDINGS U/S 148 OF THE ACT IN THE HANDS OF THE ASSESSEE AS RIGHTLY POINTED BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF VARSHABEN SANATBHAI PATEL VS. ITO (282 CTR 75). D ECISION OF THE ITAT B BENCH HYDERABAD ALSO IN A WAY SUPPORTS THE STAND OF THE ASSESSEE. HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE WE ARE OF THE VIEW THAT THERE IS NO INCRIMINATIN G MATERIAL IN THE POSSESSION OF THE ASSESSING OFFICER TO REOPEN THE ASSESSMENT O R I G I N A L L Y C O M P L E T E D U/S 143(3) OF THE ACT AND EVEN TILL DATE THERE WAS NO MATERIAL TO INDICATE THAT THE IMPUGNED SUM IS REFERABLE TO THE AMOUNT PAID BY THE ASSESSEE - COMPANY A PART FROM THE FA CT THAT THE DATE OF PAYMENT IS NOT SPECIFIED ; T HOUGH IT CAN BE ASSUMED THAT THE PAYMENT WAS MADE BETWEEN THE DATE OF AGREEMENT OF SALE AND PRIOR TO 26.03.2003 AND HENCE IT MAY FALL WITHIN THE ACCOUNTING 9 YEAR RELEVANT TO THE A.Y. 2003 - 04. ON A CONSPECTUS O F THE MATTER WE HOLD THAT THE ASSESSING OFFICER HAS NOT MADE OUT A CASE FOR EITHER REOPENING OF AN ASSESSMENT OR FOR MAKING AN ADDITION OF RS. 1 CR IN THE A.Y. 2003 - 04 AND ACCORDINGLY WE SET ASIDE THE ORDERS PASSED BY THE A.O. AND THE LD. CIT(A) ON THIS A SPECT AND DELETE THE ADDITION. 20. IN THE RESULT APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 0 T H NOVEMBER 2017. S D / - S D / - (S. RIFAUR RAHMAN ) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT HYDERABAD DATED: 3 0 T H NOVEMBER 2017 OKK SR.PS COPY TO 1. M/S. SCL INFRATECH LIMITED 6 - 2 - 913 914 VTH FLOOR PROGRESSIVE TOWERS KHAIRATABAD HYDERABAD. 2. DCIT CENTRAL CIRCLE - 2 AAYAKAR BHAVAN BASHEERBAGH HYDERABAD. 3. CIT(A) - 1 HYDERABAD. 4. CIT (CENTRAL) HYDERABAD. 5. D.R. ITAT A BENCH HYDERABAD. 6. GUARD FILE