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TMI Blog2022 (3) TMI 1422X X X X Extracts X X X X X X X X Extracts X X X X ..... or not. Assessee s stand all along is that the impugned advances by way of non-current investments nowhere carried out any interest-bearing funds at all. Revenue s contentions on the other hand is that the assessee had itself sought to claim finance costs pertaining to its borrowing regarding development of plots. Be that as it may, this is apart from the fact that the clinching issue as to whether the assessee s borrowings or advances in plotting activity contain interest stipulation or not has nowhere been examined in light of all relevant facts. We therefore deem it appropriate to restore this entire instant issue back to the Assessing Officer for his afresh factual verification. It is made clear that the assessee shall be very much at liberty to raise all factual as well as legal arguments in consequential proceedings as per law. Validity of reopening of assessment u/s 147 or u/s 153A r.w.s. 153C - HELD THAT:- We find no merit in assessee s instant legal ground since there is no material found in the Assessing Officer s reopening reasons suggesting the impugned proceedings as based on any seized material belonging, pertaining or relating to this taxpayer. We thus hold t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... am Sr. A.R. Swapnil. ORDER Per S. S. Godara, J.M. The instant batch of thirty four appeals pertains to thirteen assessees. All relevant particulars thereof are stated as under : Sl.No. Appellant ITA No. Asst. Year Order under challenge Order under challenge and case No. Proceedings under section 1. Dakshin Infrastructures Private Limited, Hyderabad. 651/Hyd/2020 2012-13 CIT(A)-12, Hyderabad 10301/2019-20 dt.18.09.2020 143(3) r.w.s 153A 2. Kapil Property Developers Limited, Hanumakonda. 652/Hyd/2020 2013-14 -do- 10243/2019-20 dt.18.09.2020 143(3) r.w.s 147 3. Kapil Foods and Structures Private Limited, Warangal. 653/Hyd/2020 2012-13 -do- 10239/2019-20 dt.18.09.2020 -do- 654/Hyd/2020 2013-14 10255/2019-20 dt.18.09.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 013-14 10226/2019-20 dt.18.09.2020 -do- 675/Hyd/2020 2014-15 10229/2019-20 dt.18.09.2020 -do- 676/Hyd/2020 2017-18 10306/2019-20 dt.18.09.2020 143(3) 10. Kausalya Shelters Private Limited, Karimnagar. 678/Hyd/2020 2013-14 -do- 10252/2019-20 dt.18.09.2020 143(3) r.w.s. 147 679/Hyd/2020 2014-15 10260/2019-20 dt.18.09.2020 -do- 680/Hyd/2020 2017-18 10309/2019-20 dt.18.09.2020 143(3) 11. M/s. Kausalya Avenues Private Limited, Karimnagar. 681/Hyd/2020 2012-13 -do- 10225/2019-20 dt.18.09.2020 143(3) r.w.s. 153A 682/Hyd/2020 2013-14 10227/2019-20 dt.18.09.2020 -do- 683/Hyd/2020 2016-17 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessee had itself sought to claim finance costs pertaining to its borrowing regarding development of plots. Be that as it may, this is apart from the fact that the clinching issue as to whether the assessee s borrowings or advances in plotting activity contain interest stipulation or not has nowhere been examined in light of all relevant facts. We therefore deem it appropriate to restore this entire instant issue back to the Assessing Officer for his afresh factual verification. It is made clear that the assessee shall be very much at liberty to raise all factual as well as legal arguments in consequential proceedings as per law. 5. This appeal ITA 651/Hyd/2020 is partly allowed for statistical purposes in foregoing terms. 6. We next come to the 2nd assessee herein Kapil Property Developers Limited s appeal ITA No.652/Hyd/2020 for A.Y. 2013-14. 7. Its twin substantive grounds pleaded in the instant appeal challenge validity of section 147 / 148 proceedings in light of the fact that the same had arisen in connection with or as a consequence to search and seizure carried out in Kapil Group; and more particularly, M/s. Kapil Consultancy Services Pvt. Ltd. on 07.04.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.55,85,000) under Schedule No.6.1 - Trade Payables - Advance for Sale of Plots, in the audited Balance sheet for the year ending 31-03-2014 . 8.3. I have carefully considered the submissions made by the appellant as well as the observations of the AO in the impugned order. The AO has brought to tax notional interest @14% on debentures and the appellant contested the same stating that there is no material with the AO to conclude that payment has been made by the investee companies. The appellant has not brought any material to prove that such income has not been receivable by it except stating that AO has no material to make such addition. The appellant has filed certain evidences which were not admissible as it was not stated why the same were not filed before the AO as per Rule 46A. therefore the addition made by the AO is confirmed. Grounds pertaining to this are DISMISSED. 9. Suffice to say, there is no material on record in either the Assessing Officer or the CIT(A) s detailed discussion throwing light in the corresponding details of the debentures scheme in issue which could be taken as benchmark for making the impugned addition. It further transpires that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g section 147 / 148 proceedings as in the main appeal ITA 652/Hyd/2020 decided in the preceding paragraphs. Same stands rejected in the very terms. The assessee s second substantive grievance avers that both the lower authorities have erred in law and on facts in disallowing its finance cost of Rs.1,90,52,483/- in the course of assessment dt.31.12.2019 as upheld in the CIT(A) s order which has passed on the same lines in ITA No.651/Hyd/2020 decided hereinabove. We thus adopt the very course of action herein as well to restore the instant issue back the Assessing Officer. 15. This appeal ITA 654/Hyd/2020 is partly allowed for statistical purposes. 16. Next comes M/s. Nalgonda Realtors Pvt. Ltd having filed its three appeals ITA Nos.655 to 657/Hyd/2020 for A.Ys. 2012-13, 2013-14 and 2017-18; respectively. Its first and foremost substantive ground challenging validity of reopening in appeal ITA 655/Hyd/2020 is rejected in light of our detailed discussion in appeal ITA No.654/Hyd/2020 in the preceding paragraphs. Ordered accordingly. It next emerges that the assessee s second substantive grievance pleaded herein seeks to delete section 36(1)(iii) interest disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7.04.2017 finally leading to initiation of section 148 proceedings vide notice dt.27.03.2019 i.e., beyond four years period from the end of the relevant assessment year in light of section 147 first proviso. There is further no dispute that the Assessing Officer had not attributed the assessee s failure fully and truly disclosing all the relevant particulars in the first round. We therefore quash the impugned reopening itself for this precise reason in light of our foregoing detailed discussion. 21. Next comes M/s. Indur Avenues and Foods Private Limited having filed its appeals ITA Nos.666 and 667/Hyd/2020 for A.Ys. 2012-13 and 2013-14; respectively. Its foregoing first appeal raises two substantive grounds i.e. validity of section 147 proceedings and finance cost disallowance of Rs.15,78,237/-; respectively. Suffice to say, we make it clear that its former substantive ground carries no merit since the impugned reopening is not based on any seized material (supra). And that the latter issue of finance cost disallowance alone stands restored back to the Assessing Officer in the preceding paragraphs. Ordered accordingly. This appeal ITA 666/Hyd/2020 is partly allowed for stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 148 notice dt.23.08.2019. This appeal ITA No.671/Hyd/2020 stands accepted therefore. 28. Coming to ITA No.672/Hyd/2020 for A.Y. 2016-17 raising the sole substantive issue of disallowance of finance charges amounting to Rs.25,15,910/-, both the learned representatives very much agree that the same also deserves to be restored back to the Assessing Officer in light of our detailed discussion in the preceding paragraphs. Ordered accordingly. This appeal ITA No.672/ Hyd/2020 is allowed for statistical purposes. 29. Next comes M/s. Kousalya Agro Farms and Developers Private Limited s four appeals ITA Nos.673 to 676/Hyd/2020 involving A.Ys.2012-13 to 2014-15 and 2017-18; respectively. 30. We find at the outset that its former twin appeals involve section 143(3) assessments framed on 14.03.2015 and 24.03.2016; respectively followed by the Assessing Officer s section 148 as many notices issued on 28.03.2019 issued after a period of 4 years from the end of the relevant assessment year. We thus quote section 147 1st proviso in light of our preceding detailed discussion to quash both these re-openings. All other pleadings on merits in both these appeals are rendered academic. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 149/- which stands restored back to the Assessing Officer in preceding terms. This appeal ITA No.680/Hyd/2020 is allowed for statistical purposes. 38. Next assessee is M/s. Kausalya Avenues Private Limited having filed appeals ITA Nos.681 to 685/Hyd/2020 for A.Y. 201213, 2013-14, 2016-17, 2017-18 and 2018-19; respectively. Its identical sole substantive ground in all assessment years (except A.Y. 2013-14) seeks to reverse both the lower authorities action disallowing finance costs of Rs.54,22,428/-, Rs.54,95,788/-, Rs.95,48,200/- and Rs.79,87,930/-; respectively, which stands restored back to the Assessing Officer in light of our foregoing findings in preceding paragraphs. Ordered accordingly. The assessee s sole substantive grievance in A.Y. 201314 seeking to delete interest income on redeemable debentures of Rs.1,47,63,000/- is restored back to the assessing authority in preceding terms. These five appeals ITA Nos.681 to 685/Hyd/2020 are allowed for statistical purposes. 39. Next assessee / appellant is M/s.Kapil Infrastructure Avenues Pvt. Ltd. having filed two appeals 686 and 687/Hyd/2020 in A.Ys. 2012-13 and 2013-14 respectively. 40. We do not find any merit in its f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng paragraphs. This last appeal ITA No.690/Hyd/2020 is allowed for statistical purposes. 46. It is made clear before parting that Mr. Ramarao had vehemently argued that it is only the amount (s) in issue of finance costs in all these appeals; as upheld in the CIT(A) s order than the entire sum(s) taken in assessment that ought to form subject matter of adjudication in the consequential proceedings. He sought to buttress the point that the CIT(A) has already granted part relief in all these cases which has nowhere been challenged at the Revenue s behest. We find no merit in the assessees instant arguments since the Assessing Officer has to examine the assessees fund position as well as the clinching issue as to whether the corresponding borrowings claimed to have been carrying no interest involving plotted land buyers, afresh and in light of all the evidence on wholesome basis only. The assessees foregoing argument stands rejected therefore. Ordered accordingly. 47. To sum up, these assessees appeals ITA Nos.653, 659, 667 to 671, 673, 674, 678, 687, 688 and 689/Hyd/2020 are allowed and remaining appeals i.e. ITA Nos.651, 652, 654 to 658, 666, 667, 672, 675, 676, 679 to 686 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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