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2016 (2) TMI 741 - ITAT HYDERABAD

2016 (2) TMI 741 - ITAT HYDERABAD - TMI - Revision u/s 263 - incorrect assessments under section 143(3) read with section 153A - Central subsidy given for installing the food processing units is to be tretaed as income of assessee as per CIT(A) - Held that:- A.O. could not have considered any other material, other than the material found during the course of search, during the assessments completed under section 143(3) read with section 153A of the I.T. Act. The Hon’ble Bombay High Court in the .....

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essment order is not erroneous in so far as it is prejudicial to the interests of the Revenue. Hence, on both the counts, we hold that the order of the Ld. CIT under section 263 is not sustainable. - Decided in favour of assessee - ITA.No.224, 225/Hyd/2015 - Dated:- 20-1-2016 - SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER For The Assessee : Mr. K.A. Saiprasad For The Revenue : Mr. Konda Ramesh ORDER PER SMT. P. MADHAVI DEVI, J.M. Both are assessee s appeals fo .....

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; 80,45,874 and ₹ 8,30,03,567 respectively. 2. Brief facts of the case are that the assessee company which is engaged in the business of manufacture and trading of edible oils, filed its return of income on 30.10.2007 for the A.Y. 2007-08 and on 25.09.2008 for the A.Y. 2008-09. Thereafter, there was a search and seizure operation in the case of the assessee and its group concerns on 30.06.2011. Accordingly, notices under section 153A of the Act for both the assessment years were issued on .....

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sed the assessment record and observed that the assessee has received ₹ 25 lakhs as Central subsidy (Food Proceeding) for each of the A.Ys which has been approved for the expansion of edible oil refinery. He observed that it is a capital subsidy and the amount was remitted to the company in two installments of ₹ 25 lakhs each during the F.Ys. 2006-07 and 2007-08 and the same was also reflected in the balance sheet for the years ending 31.03.2007 and 31.03.2008. He observed that the s .....

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the interest of the Revenue and accordingly, directed the A.O. to verify the Central subsidy for the relevant A.Ys and also directed the A.O. to re-do the assessment denovo, after providing reasonable opportunity to the assessee. Against this order of the Ld. CIT under section 263, the assessee is in appeal before us. 4. Challenging the validity of the proceedings under section 263 of the Act, Ld. Counsel for the Assessee, Mr. K.A. Saiprasad, submitted as under : 1. That the assessee had filed .....

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ection 153A can be made only in so far as seized material is concerned and there being no material seized during the course of search, the A.O. could not have considered any other issue relating to the regular assessment during the assessment proceedings under section 143(3) read with section 153A of the I.T. Act. In support of this contention, he placed reliance upon the judgment of the Hon ble Bombay High Court in the case of CIT vs. Continental Warehousing Corporation (Nhava Sheva) Ltd., repo .....

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ible oil refinery established in the backward areas and was not meant as a subsidy for purchase of any particular machinery and therefore it was not a capital subsidy but was a grant-in-aid and would not become income of the assessee. 6. The Ld. CIT s direction to re-do the assessment also makes it clear that the Ld. CIT was not sure as to the nature of the receipt and as to whether it was assessable as assessee s income and therefore, the Ld. CIT has not established the assessment order to be e .....

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he assessment under section 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents for undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. 5. The Ld. D.R. on the other hand, supported the orders of the authorities below and also placed reliance upon the judgment of jurisdictional High Court in the case of Gopal Lal Bha .....

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ssee has filed its returns of income for the relevant assessment years on 30.10.2007 and 25.09.2008 respectively and A.O. did not issue any further notices for completing the assessments under section 143(3) of the I.T. Act within the specified period i.e., within a period of twelve months from the end of the month in which the return is furnished. Therefore, as rightly submitted by the assessee, the assessments, for the above assessment years got concluded. 6.1. Thereafter, there was a search i .....

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ment proceedings under section 143(3) of the Act and the nature of receipt was also evident from the orders of the Government of A.P. while making the payment of the subsidy. Therefore, it is evident that relevant material for consideration of the issue was very much available on record and the A.O. has to be presumed to be aware of such information. It was pointed out by the Ld. Counsel for the assessee that the assessee had installed the machinery in month of August, 2003 and assessee has been .....

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