Income Tax Appellate Tribunal - Hyderabad
Acit, Central Circle-3(1), Hyd, ... vs Musaddilal Constructions & Real Estate ... on 30 December, 2016
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCH "B", HYDERABAD
BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER
AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER
ITA No. 1250/Hyd/2016
Assessment Year: 2010-11
Asst. Commissioner of Income- vs. M/s Musaddilal Construction &
tax, Central Circle - 3(1), Real Estate (P) Ltd.,
Hyderabad. Hyderabad.
PAN - AACCM 4185H
(Appellant) (Respondent)
Revenue by : Smt. U. Mini Chandran
Assessee by : Shri P. Murali Mohana Rao
Date of hearing 28-12-2016
Date of pronouncement 30-12-2016
O RDE R
PER S. RIFAUR RAHMAN, A.M.:
This appeal filed by the Revenue is directed against the order of CIT(A)-11, Hyderabad, dated 14/06/2016 for AY 2010-11 wherein the Revenue has raised the following ground of appeal:
"1. Whether on the facts and circumstances of the case, the CIT(A) was correct in setting aside the order passed by the AO u/s 143(3) rws 263 and treating it as infructuous, when revenue has preferred an appeal u/s 260A before the Hon'ble High Court against the order of the Hon'ble ITAT".
2. Briefly the facts of the case are that consequent upon search and seizure operation conducted in the MBS Jewellers group certain incriminating material belonging to the assessee was found and seized basing on which a notice u/s 153C was issued. In response to the notice issued, the assessee filed its return of income on 14/10/2011 declaring income at Rs.9,29,960/- and the assessment u/s 2 ITA No. 1250/H/16 Musaddilal Constructions & Real Estate (P) Ltd.
143(3) r.w.s. 153C was completed on 27/12/2011 by accepting the income returned.
2.1 Subsequently, the Principal Commissioner of Income Tax(Central), Hyderabad passed an order u/s 263 of the Act setting aside the assessment with directions to verify whether treatment of rental income by the assessee as 'business income' should have been considered as Rental income. Consequent to the order u/s 263, the DCIT, Central Circle-3(1), Hyderabad, completed the assessment u/s 143(3) r.w.s. 263 of the Act on 26/02/2015, after due process treating the rental income as 'income from house property' and determined the income from house property at Rs.16,24,832/-.
3. Aggrieved, the assessee preferred an appeal before the CIT(A) and brought to the notice of the CIT(A) that the assessee preferred appeal before the ITAT against the order passed u/s 263 and the ITAT quashed the said order vide its order dated 17/07/2015 in ITA No. 1088/Hyd/2014. He therefore, submitted that the consequential order passed by the AO u/s 143(3) rws 263 of the Act becomes null and void.
4. After considering the submissions of the assessee, the CIT(A) observed that in view of the fact that the assessment is cancelled on the threshold issue of validity of the revision order u/s 263, the consequential order of assessment becomes bad in law. He, therefore, concluded that there is no occasion or necessity to adjudicate the order on factual issues.
5. Aggrieved by the order of the CIT(A), the revenue is in appeal before us.
6. Considered the rival submissions and perused the material facts on record. As the ITAT quashed the order of Principal CIT passed u/s 3 ITA No. 1250/H/16 Musaddilal Constructions & Real Estate (P) Ltd.
263 of the Act, the consequential order passed by the AO u/s 143(3) r.w.s. 263 of the Act becomes non-existent. Therefore, we do not find any infirmity in the action of the CIT(A) in quashing the consequential order passed by the AO u/s 143(3) rws 263 of the Act. Accordingly, we uphold the order of the CIT(A) and the ground raised by the revenue on this issue is dismissed.
7. As per the ground raised, the revenue preferred appeal before the Hon'ble High court, in such case, the result/outcome of the appeal in future may be adopted by applying principle of merger. At this point of time, the order of the coordinate bench will bind on the AO.
8. In the result, appeal of the revenue is dismissed.
Pronounced in the open court on 30 th December, 2016.
Sd/- Sd/-
(P. MADHAVI DEVI) (S. RIFAUR RAHMAN)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Hyderabad, Dated: 30 th December, 2016
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Copy to:-
1) ACIT, Central Circle - 3(1), 7 th Floor, Aayakar Bhavan, Basheerbagh, Hyderabad - 500 004
2) M/s Musaddilal Constructions & Real Estates Pvt. Ltd., 1 st floor, Elite Plaza, Punjagutta, Hyderabad.
3 CIT(A) -11, Hyd.
4) Pr. CIT (Central), Hyderabad
5) The Departmental Representative, I.T.A.T., Hyderabad.
6) Guard File 4 ITA No. 1250/H/16 Musaddilal Constructions & Real Estate (P) Ltd.
D es c ri p t i o n Date Intls
S . N o.
1. D r af t di c t at ed on S r. P . S . / P . S
2. D r af t pl ac e d be f or e a ut h or S r. P . S / P S
3 D r af t p ro p os ed & pl ac e d b ef o re t h e s e c on d J M/ A M
Mem b er
4 D r af t di s c us s e d/ a pp r ov e d b y s e c o n d Mem b er J M/ A M
5 A p pr ov e d D r af t c om es t o t he S r . P . S . / P S S r. P . S . / P . S
6. K e pt f or p r o no u nc em e nt on S r. P . S . / P . S .
7. Fi l e s en t t o t h e B e nc h C l erk S r. P . S . / P . S
8 D a t e o n w hi c h f i l e g o es t o t h e H e ad C l e rk
9 D a t e o f D i s p at c h o f o rd e r