Itta/63/2002 Of The Commissioner Of Income Tax Iii Hyd v. Y.ramachandra Reddy Hyd

THE HON’BLE SRI JUSTICE L.NARASIMHA REDDYANDTHE HON’BLE SRI JUSTICE CHALLA KODANDA RAM I.T.T.A.No.63 of 2002 JUDGMENT:(Per Hon’ble Sri Justice L.Narasimha Reddy) The respondent is an assessee under the Income Tax Act, 1961(for short ‘the Act’). His premises was searched on 04.03.1997. Theconcerned authority verified the record and found that the interest thatwas claimed and allowed by the respondent, over the block period of10 years preceding the search, was not genuine. Accordingly, hepassed block assessment order, dated 22.03.2001, for the blockperiod 1987-88 to 1997-98. Challenging the same, the respondentfiled ITA.No.IT (SS) A.No.16/Hyd/2001 before the Income TaxAppellate Tribunal, Hyderabad Bench ‘A’ (for short ‘the Tribunal’) andthe same was partly allowed. Hence, this appeal under Section 260-Aof the Act. Heard Sri J.V.Prasad, learned counsel for the appellant, and Sri A.V.Krishna Kaundinya, learned counsel for the respondent. In the block period 1987-88 to 1997-98, the respondent claimeddeduction of interest aggregating at about Rs.4.00 crores. Theconcerned Assessing Officer, who processed the Returns, allowed thesame without raising any objection. The allowance of components of interest was found fault with onthe basis of search conducted on 04.03.1997. The Tribunal took theview that once the interest was the subject-matter of the orders ofassessment for the block period, the Assessing Officer cannot re-openthe same in the block assessment order. Chapter 14-B of the Act does not permit the re-opening or re-appreciation of the orders passed by the Assessing Officers in thecorresponding Assessment years. It is only when an income, whichwas not reflected in the Returns, or the corresponding orders ofassessment for the block period are noticed, that an assessment inrelation thereto can be passed. In similar case, we took the view thatthe search operation cannot be treated as a device to re-open or re-appreciate the orders of assessment passed over the block period,which attained finality. We, therefore, dismiss the appeal as devoid of merits. Thereshall be no order as to costs. The miscellaneous petitions filed in this appeal shall also standdisposed of. ______________________ L.NARASIMHA REDDY,J 06.08.2014v v ____________________ CHALLA KODANDA RAM,J