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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 ..... 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.18.09.2020 -do- 4. Nalgonda Realtors Private Limited, Secunderabad. 655/Hyd/2020 2012-13 -do- 10241/2019-20 dt.18.09.2020 -do- 656/Hyd/2020 2013-14 10253/2019-20 dt.18.09.2020 -do- 657/Hyd/2020 2017-18 10355/2019-20 dt.18.09.2020 -do- 5. Ujwala Publications and Developers Pvt. Ltd., Warangal. 658/Hyd/2020 2012-13 -do- 10244/2019-20 dt.18.09.2020 -do- 659/Hyd/2020 2013-14 10341/2019-20 dt.18.09.2020 -do- 6. M/s. Indur Avenues and Foods Private Limited, Nizamabad. 666/Hyd/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 's order as follows : ....xxxx - Space left blank intentionally - - Space left blank intentionally - 3. We have given our thoughtful consideration to rival submissions and find no reason to accept either parties' stand in entirety. This is for the clinching reason that both the learned lower authorities appear to have placed reliance on alleged concession made by the group concern M/s. Indur Developers and Agencies Pvt. Ltd wherein there is no clarity as to whether the same specifically covered all other group activities or the said assessee only which are specifically assessed; or not. 4. Coupled with this, the 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. The 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 dee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee did not substantiate its claim with any evidences. Further, the interest on redeemable debentures is taxable income. The assessee did not show the interest on redeemable debentures in its computation. Hence, the interest on redeemable debentures is calculated @ 14% which is worked out to RS.7,81,900/-. Addition:Rs.7,81,900/-". 8.2. The appellant has contested the said disallowance, and in support of his claim, the following submissions have been made by the appellant's AR: "Since debentures were not allotted to our company, our company has regrouped / re-c1assified the previous years debit balance amount of Rs.55,85,000/- by deducting it from the credit balance amount of Rs.27,25,25,090/- received, as advance for Sale of Plots and disclosed the Net figure of Rs.26,69,40,090/- (Rs.27,25,25,090/- - Rs.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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee had not disclosed all the relevant particulars "fully" and "truly" in light of section 147 1st proviso. We make it clear that there is hardly any scope for addition or deletion or substitution in such reopening reasons in light of hon'ble Bombay high court's landmark decision in Hindustan Lever Ltd Vs. R.B. Wadkar (2004) 268 ITR 332 (Bom) holding that re-opening reasons recorded by the Assessing Officer have to be read on standalone basis only. We thus quash the impugned reopening for this sole reason. All other pleadings on merits are rendered academic. 13. This assessee's appeal ITA 653/Hyd/2020 is allowed. 14. Coming to its next appeal ITA 654/Hyd/2020 for A.Y. 2013-14, assessee's first and foremost substantive grievance seeks to reverse both the lower authorities' action involving 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 orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paragraphs that section 147 / 148 mechanism set into motion by the Assessing Officer is not based on any seized material found during the course of search. The impugned re-opening is accordingly upheld therefore. Its latter substantive ground seeking to delete finance cost disallowance of Rs.15,37,601/- is restored back to the Assessing Officer in light of the foregoing detailed discussion in its group entity cases. This appeal ITA No.658/Hyd/2020 is partly allowed for statistical purposes in very terms. 20. We now advert to ITA No.659/Hyd/2020 involving A.Y. 2013-14. We note qua the assessee's legal ground challenging validity of the impugned re-opening that the Assessing Officer had framed his section 143(3) regular assessment on 22.03.2016 followed by the departmental search action dt.07.04.2017 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 ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es Private Limited filed three appeals ITA No.670 to 672/Hyd/2020 for A.Y.s 2012-13, 2013-14 and 2016-17; respectively. Suffice to say, its first and foremost appeal herein i.e. ITA No.670/Hyd/2020 has arisen on account of section 148 proceedings initiated on 28.03.2019 for re-opening a regular assessment framed on 09.03.2015 in A.Y. 2012-13. We thus invoke section 147 1st proviso in light of our detailed discussion in preceding paragraphs to accept the assessee's arguments challenging validity of the impugned re-opening. All other pleadings are rendered academic. This assessee's appeal ITA No.670/Hyd/2020 is allowed. 27. Same order to follow in this assessee's latter appeal ITA No.671/Hyd/2020 involving A.Y. 2013-14 and section 143(3) regular assessment on 29.03.2016 followed by section 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s very well with 4 years from the end of the relevant assessment year 2014-15. We therefore placed reliance on our preceding detailed discussion to uphold validity of the impugned re-opening. The assessee's latter substantive ground raising issue of difference of interest credited to the profit and loss account and interest on light of Form 26AS is more found to be requiring more a reconciliation at the Assessing Officer's end than any substantive adjudication. The same stands restored back to the learned assessed authority for his consequential factual verification. This appeal ITA No.679/ Hyd/2020 is partly allowed for statistical purposes. 37. We now come to ITA No.680/Hyd/2020 raising the sole substantive ground of disallowance of finance charges of Rs.18,19,149/- 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar assessments herein on 09.03.2015 and 10.03.2016 in the former instant twin appeals; respectively followed by his section 148 notice dt.27.03.2019 issued beyond a period of 4 years from the end of the relevant assessment year in light of section 147 first proviso. We thus quash the impugned re-opening proceedings in light of our preceding detailed discussion. These former twin appeals ITA Nos.688 & 689/Hyd/2020 are allowed. 45. We are now left with ITA Nos.690/Hyd/2020 for A.Y. 2017-18 raising the sole substantive grievance of finance cost amounting to Rs.99,42,325/- upheld in the CIT(A)'s order which is restored back to the Assessing Officer for his afresh factual verification and adjudication in light of our detailed discussion in the preceding 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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