Income Tax Appellate Tribunal - Hyderabad
Ch. Madhavi, Hyderabad vs Assessee on 27 August, 2014
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCHES "A" : HYDERABAD
BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER
AND
SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER
ITA.No.235/Hyd/2014
Assessment Year 2007-2008
Ms. Ch. Madhavi ACIT, Circle 8 (1)
Hyderabad vs. Hyderabad
PAN AOHPM-1603-E
(Appellant) (Respondent)
ITA.No.236/Hyd/2014
Assessment Year 2007-2008
Smt. K. Vijayalakshmi ACIT, Circle 8 (1)
Hyderabad vs. Hyderabad
PAN AZEPK-3638-B
(Appellant) (Respondent)
For Assessee : Mr. A.V. Raghuram
For Revenue : Mr. P. Somasekhar Reddy
Date of Hearing : 27.06.2014
Date of pronouncement : 27.08.2014
ORDER
PER B. RAMAKOTAIAH, A.M.
Both the assessees are related and have purchased common property which was subject matter of present assessments under section 143(3) read with section 153C read with section 153A passed by the A.O. ACIT, Circle 8(1), Hyderabad as approved by the Ld. CIT(A), Vijayawada dated 21.12.2013 by a separate orders. Since facts are similar and are inter linked, these two appeals are considered together 2 ITA.No.235 & 236/Hyd/2014 Ms. Ch. Madhavi & Smt. K. Vijayalaxmi and disposed of by this common order. Assessees herein have raised common grounds which are as under :
"2. Ld. CIT(A) erred in holding that initiation of proceedings u/s.153C is valid without considering the decision relied upon by the assessee in a connected case of Sri T. Jaipal Reddy in ITA No.2056 & 2057/H/2011, dt. 28.6.2013 wherein it is held invalid.
3. The Ld. CIT(A) erred in holding that the consideration paid is Rs.94,50,000 though it is not demonstrated that the paper seized, a copy of which is actually provided only during appeal before the CIT(A), relate to assessee and though cross examination of the person who deposed is not allowed.
4. The Ld. CIT(A) erred in confirming the addition of Rs.10,06,083 in a cryptic manner without considering the submissions and the ratio of Supreme Court in the case of P.K. Noorjehan".
1.1. Except the amount in ground No.4 in case of Smt. K. Vijaya Lakshmi which is at Rs.1,77,000/- rest of the grounds are similar.
2. For the sake of convenience reference was made to facts in Ch.Madhavi case. Brief facts of the case are that a Search and Seizure operation u/s.132 of the Act was conducted In the case of Sri D. Nagarjuna Rao Sri K.Srinivasa Reddy and Others, Miyapur, Hyderabad on 29.10.2007 and certain books and documents were seized. During the assessment proceedings the Assessing Officer on analyzing the documents seized found that 525 sq yards of land at Sy. No. 228, 229/1 bearing Plot No 137 to 139 at Madinaguda was sold by M/s. Seetharamanjaneya Constructions through Sri K. Chakradhar Rao for an amount of Rs.94,50,000/- on 29.10.2007 to the assessees. It was noted by AO that the sale 3 ITA.No.235 & 236/Hyd/2014 Ms. Ch. Madhavi & Smt. K. Vijayalaxmi consideration as per the sale deed was only Rs.18,37,500/- whereas the actual sale consideration as per the notings was Rs.94,50,000/-. Sri D. Nagarjuna Rao, Sri Venkateswara Reddy and Sri Ravindranath also has confirmed the receipt of Rs.94,50,000/- as sale consideration from them. In this regard, during the course of assessment proceedings, the Assessing Officer has asked the assessee to explain the sources of investment in the said property. In response to which, the assessee denied to have paid on money for purchase of property for Rs.94,50,000/- and stated that she has purchased the property for Rs.18,37,500/- only along with Smt K Vijaya Lakshmi and accordingly filed returns of income for the Asst. Years 2002-03 to 2005-06 explaining the source of investment to the extent of sale consideration of Rs18,37,500/- only i.e for Rs.10,00,000/- as investment in the assessee's hand. Since there is evidence that the recipient has confirmed the receipt of Rs.94,50,000/- through the father of the assessee, summons have been issued to the assessee by the A.O asking to explain the source of investment of Rs. 94,50,000/-. The Assessing Officer after analyzing the seized material held that there is evidence clearly indicating the name of Sri Chakradhar Rao who is from the side of the assessee who has materialized the transaction. In view of the same, the claim of the assessee was not accepted and in the absence of any explanation giving source for the amount over and above the sale consideration of Rs.76,12,500/- was treated as unexplained investment u/s 69 of the Act and accordingly brought to tax the assessee's share of investment i.e., Rs.38,06,250/-
4ITA.No.235 & 236/Hyd/2014 Ms. Ch. Madhavi & Smt. K. Vijayalaxmi 2.1. In addition to the above which is common in both the cases, A.O. enquired the source of the amount stated to have paid in the investment of plot which is at Rs.10,06,083/- being 50% of the total cost. In the case of Smt. Ch. Madhavi A.O. made addition of entire amount of Rs.10,06,083/- as having no source of income whereas in the case of Smt. K. Vijayalaxmi he has made addition of Rs.1,77,000/- accepting the balance source of amount. Ld. CIT(A) after considering the assessee's submissions upheld the additions made in the case of both the assessees.
3. In the course of appeal before the Ld. CIT(A), assessee raised additional ground stating that invoking the provisions of section 153C are not correct inasmuch as there was no incriminating material to assume jurisdiction under section 153C of the I.T. Act. In raising the above additional ground, assessee submitted before the CIT(A) as under :
"The learned CIT(A) provided a copy of the letter of the AO along with copy of seized material which was not provided at the time of assessment. The appellant invite kind attention to the said seized material. The Honourable CIT(A) would find that there is no indication any where in the seized material that it is connected to the appellant. The title of the seized material which is in Telugu if translated in English is "CHAKRADAR RAO A/C 525 yds"
even the contents no where refer to the appellant or Mrs. Ch. Madhavi another purchaser. Therefore it is clear that this material could not have been relied upon. The AO states that recipient accepted the consideration to be Rs.94,50,000. For various reasons they may accept the receipt to be so much. But there should be evidence to that effect. Nowhere in the assessment order such evidence is referred to except the above said material and confirmation by recipient. On the other hand it is found that the said Seetharamanjaneya Constructions entered into an agreement for purchase from one Mr.T.Jaipal Reddy and claimed to have paid Rs.74,81,250 whereas the registered deed shown a consideration of Rs.18,37,500 which is similar to the amount paid by the 5 ITA.No.235 & 236/Hyd/2014 Ms. Ch. Madhavi & Smt. K. Vijayalaxmi appellant. On the said assertion by the said Seetharamanjaneya constructions addition was made in the hands of the said Sri T.Jaipal Reddy. The I.T.A.T., vide their order in ITA Nos.2056 & 2057/H/2011, Dt.28- 6-2013 has quashed the very assessment on the ground that the seized material does not refer to the said assessee. The appellant has already submitted a copy of the decision. As submitted earlier the seized document no where refers either to the appellant or there is any indication that the transaction relate to the same plot purchased by the appellant. The appellant therefore submit that assessment made u/s.153C is invalid".
3.1. Ld. CIT(A), however, referring to the provisions of section 153C held that the documents belongs to the assessee and therefore, A.O. is justified in invoking the provisions of section 153C of the I.T. Act in completing the assessment.
4. Ld. Counsel before us while referring to the material facts of the case submitted that from the same annexure at page 59, there was a transaction pertaining to Mr. Ravindra rao the same seized material pertaining to Mr. D. Nagarjuna Rao which was brought to tax in their hands of M/s. Shouri Constructions and Mr. T. Jaipal Reddy and ITAT vide order in ITA.No.2056 and 2057/Hyd/2011 dated 28.06.2013 has quashed the same on the ground that the seized material does not refer to the said assessee. Ld. Counsel also placed on record another order of the Coordinate Bench in the case of Mr. P. Gangadhar Rao ITA.No.2097/Hyd/2012 dated 09.04.2014, similarly, initiated proceedings u/s.153C on the loose sheet at page 38 of annexure A/DNR/18 which was also quashed. It was the submission that the seized document does not refer to either assessee or the transactions of the assessee and therefore, proceedings under 153C cannot be initiated.
6ITA.No.235 & 236/Hyd/2014 Ms. Ch. Madhavi & Smt. K. Vijayalaxmi
5. Learned D.R. however, supported the orders of the Assessing Officer.
6. Before adverting to the issue under 153C, it is necessary to extract page 63 of Paper book which is of the said annexure which is as under :
CHAKRADHARA RAO A/C. 525 sq.yards plot.
04.10.06 Cash remitted 1,18,000.00 09.10.06 Cash remitted 40,00,000.00 13.10.06 In respect of plot 15,00,000.00 as Subbaramireddy 16.10.06 Cash received by 5,00,000.00 self 26.10.06 Cash 3,00,000.00 26.10.06 Ch.No.020911 22,00,000.00 28.10.06 Cash 99,500.00 30.10.06 RT Ch.020911 2,20,000.00 31.10.06 Cash 2,00,000.00 08.11.06 Cash remitted 10,00,000.00 08.11.06 Cash remitted 12,82,500.00 20.11.06 Cash remitted 33,00,000.00 18.11.06 Cash remitted 10,00,000.00 21.11.06 Cash remitted 8,50,000.00 06.03.07 Cash from 1,00,000.00 Chakradhar Rao 06.03.07 Cash from 5,00,000.00 Subbirami Reddy 11.03.07 Cash from 1,00,000.00 Chakradhar Rao 29,20,000.00 1,23,70,000.00 29,20,000.00 11.03.07 Interest towards 94,50,000.00 plot for 3 months 13 days Paid to Subbirami 48,066.00 48,066.00 Reddy 94,01,934.00 7 ITA.No.235 & 236/Hyd/2014 Ms. Ch. Madhavi & Smt. K. Vijayalaxmi 6.1. As can be seen from the above, there is no mention of either of the assessees in the said document.
Moreover, the said account is in the name of Mr. Chakradhara Rao who has not been questioned at all in this transaction. As seen from the sale deed placed on record, the sale deed is between M/s. Shouri Constructions and Mr. T. Jaipal Reddy represented by AGPA holders Mr. K. Ravindranath and K.V. Reddy. Incidentally, these names do figure in the appeals of M/s. Shouri Constructions and Mr. T. Jaipal Reddy wherein also Mr. D. Nagarjuna Rao stated to have paid amount of Rs.74,81,250/- and registered property for Rs.18,37,500/- on 09.10.2006 in favour of Mr. K. Ravindranath and K. Venkateswara Reddy vide registered deed 09.10.2006. These two people are the sellers to the present assessees being vendees. Nowhere in the assessment order, the A.O. has not co-related how Mr. D. Nagarjuna Rao is concerned with the transactions between Mr. K. Ravindranath and K. Venkateswara Reddy who are the sellers to the assessee. It is also not sure from the documents seized above why Mr. Chakradhara Rao has to pay various amounts from 04.10.2006 to 11.03.2007 i.e., beyond the registration of the sale deed dated 30th November, 2006. As on 30th November, 2006 the total amount paid seems to be Rs.1,23,70,000/- out of which in the month of March and earlier also through one Mr. Subbarami Reddy an amount of Rs.29,20,000/- was refunded to Mr. Chakradhar Rao. In these circumstances, it cannot be stated why the entire amount accounted therein should pertain to the property in question. Moreover, on similar facts in another transaction between M/s. Seetharamanjaneya Constructions represented by Mr. Nagarjuna Rao the sale consideration as per the record 8 ITA.No.235 & 236/Hyd/2014 Ms. Ch. Madhavi & Smt. K. Vijayalaxmi assessed in the hands of M/s. Shouri Constructions and Mr. T. Japial Reddy was stated to be Rs.74,81,250/-, to that same value in the name of assessees at Rs.18,37,500/-. Mr. D. Nagarjuna Rao stated to have registered to them on 09.10.2006 for consideration of Rs.18,37,500/- which in turn was purchased by the assessee for the same amount on 30th November, 2006. In case, if A.O's contention were correct and the amounts are paid by Mr. Chakradhar Rao as early as on 04.10.2006 and 09.10.2006 then, it is not understandable why the property was registered in the name of Mr. K. Ravindranath and Smt. K. Venkateswar rao on 09.10.2006 which in turn was registered in the name of the assessees on 30th November, 2006. In view of these, we are unable to understand whether the said document do pertain to property purchased by the assessee. In the absence of any co-relation between 'Mr. Chakradhar Rao account for 525 sq. yards' to that of property purchased by the assessee and considering the inter-linking transactions between various persons in the same note book seized, it cannot be said that this particular account maintained do pertain to the assessees.
6.2 On similar facts in the case of M/s. Shouri Constructions, Hyderabad vs. ACIT, Hyderabad ITA.Nos. 2056 & 2057/Hyd/2011 & ITA.No.2058/Hyd/2011 dated 28.06.2013 the Coordinate Bench has examined the submissions and held as under :
"10. We have heard submissions of the parties and perused the material on record as well as the orders of the revenue authorities On a perusal of the assessment order, it is very much evident that the seized material on the basis of which the Assessing Officer has initiated proceedings u/s 153C of the Act is page-38 of annexure A/DNR/18. The 9 ITA.No.235 & 236/Hyd/2014 Ms. Ch. Madhavi & Smt. K. Vijayalaxmi learned DR has also produced a copy of seized material before us.
11. The translated version of the aforesaid seized material which also forms part of the statement recorded from Tirumala Rao has been extensively quoted in para-4 of the assessment order. The same reads as under:-
"Tirumala Rao account"
Date Description Amount (Rs.)
25-08-2006 cash 60,000
02-09-2006 cash 10,00,000
05-09-2006 cash 40,00,000
20-09-2006 cash 29,50,000
21-09-2006 cash 1,38,000
------------------
81,48,000
A perusal of the aforesaid seized document clearly mentions that in the heading it is mentioned as 'Tirumala Rao account' and below that dates and amounts along with the word cash have been mentioned. Nothing has been mentioned whether they are receipts or payments. The aforesaid loose sheet neither mentions the name of the assessee nor it refers to the plot Number, survey number etc., for which the payment was allegedly made. There is nothing in the seized document to suggest that it relates to the sale transaction of plot No.22, Survey No.230 admeasuring 420 sq. yards at Madinaguda. Apart from the aforesaid seized document, the only other evidence on the basis of which the Assessing Officer concluded that the assessee has paid the amount of Rs.81,48,000/- is the statement recorded from D. Nagarjuna Rao wherein he stated that an amount of Rs.81,48,000/- was received from Tirumala Rao towards sale consideration of the property. However the statement recorded from B. Tirumala Rao would show that he has categorically denied of having paid Rs.81,48,000/- to D. Nageswara Rao. The assessee also in the statement recorded from him has denied of having paid anything over and above the amount mentioned in the sale deed.10
ITA.No.235 & 236/Hyd/2014 Ms. Ch. Madhavi & Smt. K. Vijayalaxmi
12. In the aforesaid circumstances in our view, the Assessing Officer could not have initiated proceedings u/s 153C of the Act solely on the basis of the loose sheets i.e., page No.38 of annexure A/DNR/18. Reading of section 153C of the Act makes it clear that the primary condition for initiating proceedings u/s 153C, the Assessing Officer must be satisfied that jewellery and other valuable articles or books of accounts or documents seized belongs to a person other than the person referred to in section 153A of the Act. In the present case, the so called seized material on the basis of which the Assessing Officer has initiated proceedings u/s 153C of the Act was admittedly not seized from the possession of the assessee but a third person Sri D. Nagarjuna Rao against whom the search and seizure operation was carried out u/s 132 of the Act. Further, the said person not only admitted that the seized material belongs to him but the entries made therein are also in his hand writing. A reference to the seized material also makes it clear that neither it mentions the name of the assessee nor has any reference towards the property purchased by the assessee. Only thing it mentions is the name of Tirumala Rao and some entries with regard to the cash payment/receipts. Since the seized document has no reference either to the assessee or to the property purchased by the assessee it cannot be said to be belonging to the assessee as envisaged u/s 153C of the Act. Besides, merely because D. Nagarjuna Rao has stated that he has received the amount of Rs.81,48,000/- from Tirumala Rao towards sale of the property in question it cannot be inferred on that basis alone, that the assessee has paid the said amount towards purchase of the property. More so, both the assessee and Tirumala Rao have denied of making the said payment to B. Nagarjuna Rao. In the aforesaid circumstances, the inference drawn by the Assessing Officer, in our view, is not legally sustainable.
13. It is a fact that D. Nagarjuna Rao is engaged in the business of real estates and Sri Tirumala Rao by his own admission is a broker. In the aforesaid circumstances, the entries made in the seized document in the name of Tirumala Rao if at all can be said to be representing receipts/payments it could very well be relating to some other transaction, but certainly it cannot be treated to be the payments made by the assessee towards purchase of the property in question. It will be pertinent to mention here that on the basis of the said seized material i.e., A/DNR/18 11 ITA.No.235 & 236/Hyd/2014 Ms. Ch. Madhavi & Smt. K. Vijayalaxmi relating to some some other transactions similar assessments u/s 153C of the Act were also made in case of M/s Shouri Constructions and T. Jaipal Reddy. When the issue came up before the Tribunal the co-ordinate bench of the Tribunal in ITA Nos. 2056 and 2057/Hyd/2011 in case of M/s Shouri Constructions and T. Jaipal Reddy dated 28- 6-2013 (supra) while considering the issue of validity of proceedings initiated u/s 153C of the Act accepted the contention of the assessee and held that the proceedings initiated u/s 153C of the Act on the basis of the so called incriminating material is invalid in law. At this point, it will be relevant to look into the finding of the Tribunal in this regard which is extracted hereunder:-
"10. Thus the condition precedent for assumption of jurisdiction u/s 153C is, the AO must be satisfied that the seized materials belongs to such other person. The word belong has not been defined under the Act. As per the dictionary meaning 'belong to' means be the property of; be the rightful possession of; be due to. Undisputedly seized document on the basis of which proceeding u/s 153C is initiated against the assessee is a loose sheet marked as 'A/DNR/18'. At our request the learned DR has submitted a copy of the aforesaid seized material which is reproduced below:
11. Since the seized document reproduced hereinabove is not properly visible, we are also annexing herewith a copy of the said document to this order, which should be treated as part of this order.
"Tirumala Rao account"
Date Description Amount (Rs.)
25-08-2006 cash 60,000
02-09-2006 cash 10,00,000
05-09-2006 cash 40,00,000
20-09-2006 cash 29,50,000
21-09-2006 cash 1,38,000
-----------------------
81,48,000
-----------------
12
ITA.No.235 & 236/Hyd/2014
Ms. Ch. Madhavi & Smt. K. Vijayalaxmi
12. This document was seized from the business premises of D. Nagarjuna Rao in course of action u/s 132 of the Act against him. In the impugned assessment order the AO has also observed that the said D. Nagarjuna Rao had admitted that entries in the seized documents were made by him in his own handwriting. While considering the objection of the assessee, the AO has also admitted the fact that neither the name of the assessees appear in the seized document nor it bears their signature. The notings made in the seized document only shows that an amount of Rs. 74,81,250/- was paid to Mr. Venkatesh towards sale consideration of the property. When the document in question was not seized from the assessee but from a third party, who admittedly has made the entries therein and furthermore when the seized document neither mentions the name of the assessee or bears his signature, then by no stretch of imagination it can be said to be belonging to the assessee. Thus, the precondition for initiating proceeding u/s 153C is not satisfied. Therefore, the initiation of proceeding u/s 153C against the assessee is without jurisdiction. The Hon'ble Gujarat High Court in case of Vijaybhai N. Chandrani Vs. ACIT [supra] while considering identical issue held as under:-
"12. On a plain reading of the aforesaid provisions it is apparent that sections 153A, 153B and 153C lay down a scheme for assessment in case of search and requisition. Section 153A deals with procedure for issuance of notice and assessment or reassessment in case of the person where a search is initiated under section 132 or books of account, other documents or assets are requisitioned under section 132A after the 31st day of May, 2003. Section 153B lays down the time limit for completion of assessment under section 153A. Section 153C which is similarly worded to section 158BD of the Act, provides that where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing. or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A he shall proceed against each such other person and issue such other person notice and assess or reassess 13 ITA.No.235 & 236/Hyd/2014 Ms. Ch. Madhavi & Smt. K. Vijayalaxmi income of such other person. However, there is a distinction between the two provisions inasmuch as under section 153C notice can be issued only where the money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belong to such other person, whereas under section 158BD if the Assessing Officer is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under section 132 or whose books of account or other documents or assets were requisitioned under section 132A, he shall proceed against such other person under section 158BC.
13. Thus a condition precedent for issuing notice under section 153C and assessing or reassessing income of such other person, is that the money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned should belong to such person. If the said requirement is not satisfied, recourse cannot be had to the provisions of section 153C of the Act.
14. Examining the facts of the present case in the light of the aforesaid statutory scheme, it is an admitted position as emerging from the record of the case, that the documents in question, namely the three loose papers recovered during the search proceedings do not belong to the petitioner. It may be that there is a reference to the petitioner inasmuch as his name is reflected in the list under the heading Samutkarsh Members Details and certain details are given under different columns against the name of the petitioner along with other members, however, it is nobody's case that the said documents belong to the petitioner. It is not even the case of the revenue that the said three documents are in the handwriting of the petitioner. In the circumstances, when the condition precedent for issuance of notice is not fulfilled any action taken under section 153C of the Act stands vitiated."
13. The ITAT, Bangalore Bench in case of P. Srinivas Naik Vs. ACIT [supra] has held as under :
14ITA.No.235 & 236/Hyd/2014 Ms. Ch. Madhavi & Smt. K. Vijayalaxmi "7. We have heard both the parties. It is an undisputed fact that books of account or document does not belong to the assessee, as these were seized from the premises of Shri Reddy. It is nowhere stated that these books of account or documents showed that all the transactions belonging to the assessee. Such books of account or documents contained the transactions relating to the group concerns of Shri Reddy. No valuable belonging to the assessee has been seized during the course of search. The term belonging, implied something more than the idea of casual association. It involves the notion of continuity and indicates one more or less intimate connection with the person over a period of time.
The books of account or documents seized during the course of search have a close association with the group concern of Shri Reddy. It records the transaction carried out by that group. It does not record the transaction carried out by the assessee. Under Wealth-tax Act, assets belonging to assessee were taxable. The expression belonging to the assessee connotes both the complete ownership and limited ownership of interest. Of course belonging to is capable connoting, interest, which is less than absolute perfect legal title. However, there should be some limited ownership of interest, if it is to be permitted that the assets belongs to the assessee. In the instant case, documents or books of account found during the course of search and seized cannot be termed, to be indicating any limited interest of the ownership of the assessee in such books of account or documents. The language used in section 153C is materially different from the language used under section 158BD. As per section 158BD, if any undisclosed income relates to other person, then action against such other person can be taken provided such undisclosed income is referable to the document seized during the course of search. However, section 153C says that if valuable or books of account or documents belonging to other persons are seized then action under section 153C can be taken against that person. In the instant case, we are satisfied that books of account or 15 ITA.No.235 & 236/Hyd/2014 Ms. Ch. Madhavi & Smt. K. Vijayalaxmi documents do not belong to the assessee and, therefore, the Assessing Officer was not justified in initiating action under section 153A read with section 153C of the Income-tax Act. The Assessing Officer is free to take proper remedial measure as per law."
14. We, in the preceding paragraphs, have already held that the seized document on the basis of which proceeding u/s 153C was initiated cannot be said to be belonging to the assessee. Therefore, considered in the light of the ratios laid down in the judicial precedents referred to above, the assumption of jurisdiction u/s 153C has to be held as invalid and consequentially the assessment order passed must be declared as without jurisdiction. Accordingly, we set aside the order passed by the CIT(A) and allow the appeal of the assessee.
6.3 As can be seen from the aforesaid observations, the Tribunal has categorically held that since the seized material has no reference to the assessee, it cannot be considered to be belonging to the assessee for enabling the initiation of proceedings u/s 153C of the Act. Facts in the present case being materially the same, as the Assessing Officer has relied upon the same seized material i.e., A/DNR/18 and since the seized material has no reference to the assessee, it cannot be said to be belonging to the assessee so as to empower the Assessing Officer to assume jurisdiction u/s 153C of the Act. In the aforesaid view of the matter, we hold that the assessment proceedings initiated not being in accordance with the provisions of section 153C, is invalid in law and consequently the assessment order passed is nullity in eye of law. Accordingly, we set aside the order of the CIT (A) and allow the appeals of the assessee on this legal issue.
16ITA.No.235 & 236/Hyd/2014 Ms. Ch. Madhavi & Smt. K. Vijayalaxmi
7. Since we have allowed the appeals of the assessees on the legal issue of validity of proceedings u/s 153C of the Act, we desist ourselves from dwelling upon the merits of the addition made by the Assessing Officer as raised in other grounds.
8. In the result appeals of asseessee are allowed.
Order pronounced in the open Court on 27.08.2014.
Sd/- Sd/- (ASHA VIJAYARAGHAVAN) (B.RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, Dated 27th August, 2014 VBP/- Copy to 1& Ms. Ch. Madhavi & Smt. K. Vijayalaxmi, Hyderabad
2. C/o. Mr. K. Vasantkumar & Mr. A.V. Raghuram Advocates, 610, 6th Floor, Babukhan Estate, Basheerbagh, Hyderabad-1.
3. ACIT, Circle 8(1), I.T. Towers, Hyderabad.
4. CIT(A), Vijayawada + 1 copy
4. CIT-II, Hyderabad
5. D.R. "A" Bench, ITAT, Hyderabad.