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TMI Blog2023 (1) TMI 1394X X X X Extracts X X X X X X X X Extracts X X X X ..... taken by the AO in the instant case cannot be said to be not a possible view or that a view which cannot be said to be unsustainable in law. When the AO has taken a possible view, merely because the PCIT does not agree with the view taken by the AO, he cannot invoke the jurisdiction u/s 263. Once the AO has brought to tax the amounts as per the sale deeds in A.Y 2015-16 2016-17 in the hands of the assessee firm, a fact brought on record by the PCIT himself, therefore, we are of the considered opinion that the PCIT was not justified in invoking the jurisdiction u/s 263 - we set aside the order of the PCIT and the grounds raised by the assessee are allowed. - Shri R.K. Panda, Accountant Member And Shri K. Narasimha Chary, Judicial Member For the Assessee : Shri Murali Mohan Rao, CA. For the Revenue : Shri Jeevan Lal Lavidiya, DR. ORDER PER R.K. PANDA, A.M This appeal filed by the assessee is directed against the order dated 16.3.2022 passed u/s 263 of the I.T. Act, 1961 by the learned Pr.CIT (Central) Hyderabad relating to A.Y. 2014-15. 2. Facts of the case, in brief, are that the assessee is a partnership firm incorporated on 31.1.2014 and is in the business of real estate. It did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e three properties. Therefore, the order passed u/s 144/153A on 12.12.2019 was erroneous and prejudicial to the interest of the Revenue. He, therefore, issued a show-cause notice u/s 263 of the I.T. Act asking the assessee to explain as to why such unaccounted investment in the three properties should not be brought to tax and the assessment order should not be revised. 4.1 The assessee objected to the show-cause notice issued u/s 263 on 11.8.2021 and filed a letter requesting the PCIT to drop the proceedings. The PCIT dropped the proceedings-initiated u/s 263 vide notice issued dated 11.8.2021. Thereafter, he initiated separate proceeding u/s 263 to which the assessee again objected by contending as under: 1. These sale deeds have already been brought to tax by the Assessing Officer in Assessment Year 2014-15 in the hands of Sri. Gaddam Shyam Prasad Reddy. 2. The Assessing Officer has also brought to tax these sale deeds in Assessment Years 2015-16 and 2017-18 in the hands of the assessee. 3. At the time of recording statement, Sri. Gaddam Shyam Prasad Reddy was not aware of facts of accounting and bookkeeping records and subsequently filed retraction statement. 4. The proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that they have received the entire sale consideration as on the date of execution of the deeds. The Assessing Officer brought to tax cheque portion of payment totaling to Rs. 17 lakhs for the three properties in Assessment year 2014-15 and the cash portion in the years of registration i.e., Assessment years 2015-16 ( Rs. 25.17 crores in respect of two properties) and 2017-18 (Rs. 14.31 crores in respect of one property), which is without any basis. Thus, the view taken by the Assessing Officer is patently wrong. 5.2 The learned PCIT observed that on a matter, where two views are legitimately possible and the Assessing Officer has taken one of those views, substitution of the other view by the Pr. Commissioner of Income Tax through order u/s. 263 may amount to mere change of opinion. However, the facts of the present case clearly show that no two views were legitimately legally possible and the view taken by the Assessing Officer was patently wrong and because of this patently wrong view taken by the Assessing Officer, the Assessment Order passed u/s. 144 r.w.s. 153A on 12.12.2019 become erroneous as well as prejudicial to the interests of Revenue and amenable to the revisionary po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appreciated that there is no mistake of application of law or shortcoming or failure on the part of the AO in the making further enquiry or examination of the issues and thus the order not erroneous. 2(d) The Ld. Pr. CIT ought to have appreciated that the AO has verified all issues which, in the opinion of the AO, needs examination and therefore, taking recourse u/s 263 of the Act on the issues examined is erroneous. 2(e) The Ld. Pr. CIT ought to have appreciated the fact that AO has examined the issues during the course of assessment proceedings, when the assessment order is passed by a quasi-judicial authority, the same is to be considered as final when there is neither wrong application law nor omission of any issue to be examined. 2(f) The Ld. Pr. CIT ought to have appreciated that there is no lapse on the part of the Assessing Officer to examine the issues raised by the Pr. CIT and that there is no need to record in the assessment order all the issues examined and satisfied by the Assessing Officer and thus there is no error in the order calling for revenue u/s 263. 2(g)The Ld. Pr. CIT ought to have appreciated the fact that the amounts of purchase consideration paid have alre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly contemplates taxing of correct income in the year of its accrual and not in multiple years, more number of times on single income. 9. The appellant may add or alter or amend or modify or substitute or delete and/or rescind all or any of the grounds of appeal at any time before or at the time of hearing of the appeal. 7. The learned Counsel for the assessee strongly challenged the order passed by the learned PCIT u/s 263 of the Act by setting aside the assessment passed by the Assessing Officer u/s 144/153A of the I.T. Act. He submitted that the PCIT issued notice u/s 263 of the Act on 30.06.2021 proposing to set aside the assessment order dated 12.12.2019 for the impugned A.Y. However, he dropped the same on 22.2.2022 and on the very same day he again issued another notice u/s 263 of the Act to set aside the same assessment order dated 12.12.2019. Therefore, once the PCIT initiated the proceedings u/s 263 of the I.T. Act and dropped the same, therefore, again he should not have issued notice u/s 263 of the I.T. Act for the same issues. 8. The learned Counsel for the assessee in his next plank of argument submitted that the issues for which the PCIT invoked jurisdiction u/s 263 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment order cannot be said to be erroneous or prejudicial to the interest of the Revenue: i) Hon'ble A.P High Court in the case of Spectra Shares Scrips (P) Ltd (36 Taxman 348) ii) ITAT Hyderabad Bench in the case of Manisha Agri Biotech (P) Ltd (ITA 223/Hyd/2014) iii) ITAT Hyderabad Bench in the case of Zelan Projects (P) Ltd (ITA 1361/Hyd/2013). 11. Referring to the following decisions, he submitted that the Explanation (2) to proviso of section 263 introduced by the Finance Act, 2014 w.e.f. 1.5.2015 does not have retrospective effect: a) ITAT Delhi in the case of Brahma Center Dev. (P) Ltd vs. PCIT (ITA Nos. 4341 4342/Del/2019). b) ITAT Delhi in the case of M/s. Arun Kumar Garg HUF vs. PCIT (ITA No. 3391/Del/2018). c) ITAT Amritsar in the case of Smt. Surinder Kaur Brar vs. Income Tax Officer (ITA 204 to 205/ASR/2017). d) ITAT Mumbai in the case of M/s. Indus Best Hospitality Realtors (P) Ltd vs. PCIT (ITA 3125/Mum/2017). 12. Referring to the following decisions, he submitted that the addition of the same amount will amount to double taxation, therefore, the order of the learned PCIT invoking the jurisdiction u/s 263 of the I.T. Act is not in accordance with law. i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een passed taking prior approval from the Add./Jt.CIT u/s 153D of the I.T. Act. Referring to the various decisions, he submitted that when the order is passed after taking prior approval from the Add/Jt.CIT u/s 153D, provisions of section 263 cannot be invoked by the PCIT. 15. The learned DR, on the other hand, heavily relied on the order of the PCIT. He submitted that the PCIT has given justification in his elaborate order while setting aside the assessment passed by the Assessing Officer u/s 143(3) of the Act. He submitted that the order of the PCIT being in accordance with law should be upheld and the grounds raised by the assessee should be dismissed. 16. Referring to the decision of the Delhi Bench of the Tribunal in the case of Kapil Mehta vs. CIT in ITA No. 533/Del/2021, dated 11.10.2021, he submitted that the CIT has jurisdiction u/s 263 in case of orders passed by the Assessing Officer after taking approval from the Add/Jt.CIT u/s 153D of the Act. Referring to the decision of the Mumbai Bench of the Tribunal in the case of Crompton Greaves in ITA Nos. 1994 2863, dated 1.2.2016 for the A.Y 2007-08, he submitted that the CIT can invoke the provisions of 263 of the I.T. Act w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re as under: Q3. I am showing you, document no. 7200/2014,7201 and 12540/2016 being a sale deed(s) executed on 11.02.2014, which were found and seized during the course of search proceedings at your residence on 20.09.2017 and annexed as page no.5 to 37 of annexure A/GSPR/Res/01, where in land admeasuring Ac.3-11 guntas equivalent to 15,851 sq.yards, Ac.4.1l guntas (20,697 sq.yards) and Ac.411 guntas (20,691 sq. yards) respectively situated at Kondapur Village. Serilingampaly, Ranga Reddy district was purchased by M/s GRR Holdings, Hyderabad, a partnership firm represented by you and Mr. Syed Mohammed Fayaz for a valuable sale consideration of Rs. 10,88,50,000/, Rs. 14,38,50,000/- and Rs. 14,38,50,000/- respectively and that the said consideration was paid in cash. Please identify the same and explain the sources for the said consideration paid along with documentary evidence. S. No Document No. /date Extent of land Total consideration paid Cheque/DD/Pay order No. Paid in cash 1 7200/2014 dated 11.02.2014 Ac 3.11 guntas (15,851 sq.yards Rs.10,88,50,000 (5) Cheque of Rs. 1.50 lakhs vide No. 701837 of SBI Abids Branch dated 11.2.2014 6) Pay order No. 002209 for Rs. 1.50 lakhs dated ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of Rs. 17 lakhs was paid by the firm through banking channels, the sources for the same cannot be explained. In view of which in reply to question no.11, in my statement recorded on 20.09.2017, u/s. 132(4) of the Act, at my residence i.e., Villa No. 19, Bhavya's Alluri Meadows, Whitefields, Kondapur, Hyderabad in the case of Mis. GRR Holdings, Hyderabad, Shri G.Shyam Prasad Reddy and Ms. GRR Holdings Pvt. Ltd., Hyderabad, I have admitted the amount of Rs. 17 lakhs as my undisclosed income for the financial year 2013-14, relevant to asst, year 2014-15. I re-affirm that the amount of Rs. 17 lakhs paid to the vendors by the firm were out of my undisclosed income for the financial year 2013-14, relevant to the asst, year 2014- 15 and shall pay taxes on such amount accordingly. 19. The various other questions put by the Investigation Wing has also been considered by the Assessing Officer in the body of the assessment order which are as under: Q.5 Please go through the registered sale deed(s) bearing nos. 7200/14,7201/14 and 12540/16 registered in the name of Mis. GRR Holdings, Hyderabad on 11.02.2014 wherein the stamp duty paid works out to Rs. 1,68,91,012/, Rs. 1,90,28,892/ a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n his reply he deposed that as his share, he had invested Rs. 20 lakhs in M/s. GRR Holdings, Hyderabad. Accordingly, while recording question no.15 of the said statement, he was shown your statement recorded u/s. 132(4) of the Act on 20.09.2017, wherein you had deposed that Mr Syed Mohammed Fayaz had paid/invested/contributed an amount of Rs. 5 crores. Ongoing through your statement, he deposed as under: Yes I have through the statement of Sri G. Shy am Prasad Reddy recorded u/s. 132(4) of the IT Act at his residence on 20-09-2017 at his residence. In his statement, he has deposed that I have paid/contributed Rs. 5,00,00,000/- towards purchase of land by M/s. GRR Holdings, Hyderabad in which I am a partner, I once again reiterate that I have paid/contributed Rs. 20,00,000/- (Twenty Lakhs only) towards purchase of land. I do not know under which circumstances Mr. G. Shyam Prasad Reddy has deposed that I have paid/contributed Rs. 5,00,00,00%- towards purchase of land by M/s. GRR Holdings, Hyderabad. I once again confirm that I have paid/contributed of Rs. 20,00,000/- only. The above deposition was once again reiterated by Mr. Syed Mohammed Fayaz in his statement recorded ws.132(4) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .5.14 2015-16 8311180 3 7201/14 (P659/14) Behind Page No. 3 2650120 30.5.14 2015-16 2650120 4 7201/14 (P659/14) Behind Page No. 4 1073960 1.9.14 2015-16 1073960 6 7200/14 (P658/14) Behind Page No. 2 500000 11.2.14 2014-15 500000 7 7200/14 (P658/14) Behind Page No. 2 6633180 22.5.14 2015-16 6633180 8 7200/14 (P658/14) Behind Page No. 3 1966120 30.5.14 2015-16 1966120 9 7200/14 (P658/14) Behind Page No. 4 886760 4.9.14 2015-16 886760 10 11 12540/16 (P660/14) Behind Page No. 2 1000000 4.2.14 2014-15 1000000 12 12540/16 (P660/14) Behind Page No. 2 1000000 22.5.14 2015-16 100000 13 12540/16 (P660/14) Behind Page No. 3 5188125 9.9.16 2017-18 5188125 14 12540/16 (P660/14) Behind Page No. 3 5847500 22.9.16 2017-18 5847500 15 16 TOTAL PAID 36056945 2500000 22521320 11035625 36056945 20. A perusal of the statement shows that for the payment of on-money, the partners have owned up in their individual hands for which the Assessing Officer in their hands has made the addition and this fact has also been accepted by the PCIT where the submission of the assessee before the PCIT and relevant portion of the findings are as under: Further contentions of the assessee in the written submission are as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax. The Assessing Officer in the assessment order has considered the cheque amount paid and the registration expenses in the hands of the firm whereas he has not brought to tax the cash portion in the hands of the partnership firm but added the same as undisclosed income in the hands of the partners, a fact not disputed by the PCIT in the order passed u/s 263. Once the cash amount is brought to tax in the hands of the partners as per their admission before the Investigation Wing at the time of search, the same should not have been brought to tax in the hands of the firm because that would have amounted to double taxation. Therefore, the view taken by the Assessing Officer in the instant case cannot be said to be not a possible view or that a view which cannot be said to be unsustainable in law. 23. It has been held in various decisions that when the Assessing Officer has taken a possible view, merely because the PCIT does not agree with the view taken by the Assessing Officer, he cannot invoke the jurisdiction u/s 263 of the I.T. Act. The various decisions relied on by the learned Counsel for the assessee support the above proposition. 24. We further find the tax rate for all the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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