M/s. Shree Ramakrishna Alloys Ltd, Nalgonda V. The ACIT, Range-9, Hyderabad

CO 50/HYD/2010

• Counselvise Citation: [2010] 122 COUNSELVISE.COM (IT) 5533 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 29-12-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 21-12-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 08-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K V N CHARYA
• Assessee Lawyers: A V RAGHURAM
• Keywords: Source of fund
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER I.T.A. NO. 996/HYD/2010 (ASSESSMENT YEAR 2006-07) ADDL. CIT, RANGE 9, HYDERABAD VS. M/S. SREE RAMAKRISHNA ALLOYS LTD., SURYAPET, PAN: AACCS8687A APPELLANT RESPONDENT C.O. NO. 50/HYD/2010 ARISING OUT OF I.T.A. NO. 996/HYD/2010 (ASSESSMENT YEAR 2006-07) M/S. SREE RAMAKRISHNA ALLOYS LTD., SURYAPET, PAN: AACCS8687A VS. ADDL. CIT, RANGE 9, HYDERABAD APPELLANT RESPONDENT ASSESSEE BY: SHRI A.V. RAGHURAM REVENUE BY: SHRI K.V.N. CHARYA O R D E R PER NRS GANESAN, JM: THE REVENUE HAS FILED THE APPEAL AGAINST THE ORDER OF THE CIT(A)-VI, HYDERABAD DATED 12.4.2010 AND PERTAINS T O THE ASSESSMENT YEAR 2006-07 AND THE ASSESSEE FILED THE CROSS OBJEC TION (CO) NO. 50/HYD/2010 AGAINST THE VERY SAME ORDER. THEREFORE , WE HEARD BOTH THE APPEAL OF THE REVENUE AND THE CO OF THE ASSESSE E TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON ORDER. 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IN THE A PPEAL OF THE REVENUE IS ADDITION OF RS.45,52,010 U/S. 68 OF THE INCOME-TAX ACT, 1961. I.T.A. NO.996 & CO.50/H YD/2010 M/S. SREE RAMAKRISHNA ALLOYS LTD. ========================== 2 3. SHRI K.V.N. CHARYA, THE LEARNED DR SUBMITTED THA T THE ASSESSEE WAS ASKED TO FILE THE DETAILS BY THE ASSESSING OFFI CER BY A LETTER DATED 12.11.2008. HOWEVER, THE ASSESSEE FILED INFORMATIO N ON 30.12.2008 IN RESPECT OF 55 CASES AND IN RESPECT OF 30 CASES CONF IRMATIONS COULD NOT BE FILED. THEREFORE, THE ASSESSING OFFICER HAS NO OCCASION TO VERIFY THESE CONFIRMATION LETTERS EVEN IN CASE OF 55 CASES . HOWEVER, THE CIT(A) ON THE BASIS OF THE INFORMATION FURNISHED BY THE ASSESSEE FOUND THAT THE ASSESSEE HAS FURNISHED ALL THE PARTICULARS INCLUDING THE PA NO. AND SOURCE OF FUNDS FOR INVESTMENT AND ACCORDINGLY ALLOWED THE APPEAL OF THE ASSESSEE IN RESPECT OF CASH CREDIT. THE LEA RNED DR SUBMITTED THAT THE INFORMATION WAS FURNISHED ONLY ON THE LAST DAY OF LIMITATION. THE ASSESSING OFFICER HAS TO NECESSARILY PASS THE O RDER ON 31ST DECEMBER, 2008. THEREFORE, FILING OF THE INFORMATI ON ON 30TH DECEMBER, 2008 CANNOT BE TAKEN INTO CONSIDERATION F OR THE PURPOSE OF ALLOWING THE CLAIM OF THE ASSESSEE. ACCORDING TO T HE LEARNED DR THE ASSESSEE HAS NOT PROVED THE IDENTITY OF THE CREDITO RS, GENUINENESS OF THE TRANSACTIONS AND THE CREDITWORTHINESS OF THE CR EDITORS. THEREFORE, THE CASE-LAWS RELIED UPON BY THE CIT(A) MAY NOT BE APPLICABLE TO THE FACTS OF THIS CASE. 4. ON THE CONTRARY, SHRI A.V. RAGHURAM, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE FURNISHED THE DETAILS AS REQUIRED BY THE ASSESSING OFFICER. THEREFORE, IT I S FOR THE ASSESSING OFFICER TO VERIFY THE PARTICULARS. RELYING ON THE JUDGEMENT OF THE I.T.A. NO.996 & CO.50/H YD/2010 M/S. SREE RAMAKRISHNA ALLOYS LTD. ========================== 3 JURISDICTIONAL HIGH COURT IN CIT VS. LANCO INDUSTRI ES, 242 ITR 357, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT WHE N THE ASSESSEE HAS FURNISHED ALL THE PARTICULARS WITH REGARD TO TH E SHAREHOLDERS' PA NO. AND THE SOURCE OF FUND, THE ASSESSEE HAS DISCHARGED ITS ONUS. THEREFORE, NO ADDITION COULD BE MADE IN THE HANDS O F THE ASSESSEE. THE LEARNED COUNSEL FOR THE ASSESSEE HAS ALSO PLACE D HIS RELIANCE ON THE JUDGEMENT OF THE APEX COURT IN CIT VS. ORISSA C ORPORATION, 159 ITR 78 AND IN CIT VS. STELLA INVESTMENTS, 251 ITR 2 63. REFERRING TO THE CO, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMIT TED THAT THE SHARE APPLICATION MONEY TO THE EXTENT OF RS.17,00,310 WAS RECEIVED FROM 30 PERSONS. SINCE SUFFICIENT TIME WAS NOT GIVEN TO TH E ASSESSEE THE SAME COULD NOT BE FILED BEFORE THE ASSESSING OFFICER. H OWEVER, THE SAME WAS FURNISHED BEFORE THE CIT(A). THE CIT(A) FOUND THAT THE ASSESSEE COMPANY HAS FILED ONLY THE NAMES AND ADDRESSES OF T HE INVESTORS. ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE W HEN THE ASSESSEE HAS FILED THE NAMES AND ADDRESSES OF THE INVESTORS IT IS FOR THE ASSESSING OFFICER TO VERIFY WHETHER THEY HAVE ACTUA LLY DEPOSITED THE FUNDS OR THE FUNDS WERE SHOWN FROM THE CORPUS OF TH E ASSESSEE COMPANY. THEREFORE, ACCORDING TO THE LEARNED COUNS EL FOR THE ASSESSEE THE CIT(A) IS NOT CORRECT IN CONFIRMING TH E SHARE APPLICATION AMOUNT TO THE EXTENT OF RS.17,00,310. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADM ITTEDLY THE ASSESSING OFFICER CALLED FOR INFORMATION BY A LETTE R DATED 12.11.2008. I.T.A. NO.996 & CO.50/H YD/2010 M/S. SREE RAMAKRISHNA ALLOYS LTD. ========================== 4 HOWEVER, THE SAME WAS FILED BY THE ASSESSEE WITH RE GARD TO 55 CASES ONLY ON 30.12.2008. THE LIMITATION FOR PASSING THE ORDER WOULD EXPIRE ON 31.12.2008. THEREFORE, WE CANNOT BLAME THE ASSE SSING OFFICER FOR NOT VERIFYING THE DETAILS FILED BY THE ASSESSEE. I N RESPECT OF THE REMAINING 30 CASES THE ASSESSEE COULD NOT FILE THE CONFIRMATION LETTERS. THE ASSESSEE APPEARS TO HAVE STATED BEFORE THE ASSE SSING OFFICER THAT DUE TO TIME CONSTRAINT THE SAME COULD NOT BE FILED. THE FACT REMAINS IS THAT IN RESPECT OF 55 CASES THE ASSESSEE HAS FILED THE DETAILS WITH REGARD TO NAME AND ADDRESS, PA NO., MODE OF DEPOSIT OF FUNDS AND SOURCE OF THE CREDITOR INCLUDING THE CONFIRMATION L ETTERS. IN RESPECT OF 30 CASES THE ASSESSEE HAS FURNISHED THE NAMES AND A DDRESSES. THEREFORE, WHETHER THE SHAREHOLDERS DEPOSITED THE F UNDS AS CLAIMED BY THE ASSESSEE OR THE SAME WAS FLOWN FROM THE CORPUS OF THE ASSESSEE CAN VERY WILL BE EXAMINED BY THE ASSESSING OFFICER. SINCE THE DETAILS WERE FURNISHED ON THE LAST DAY OF LIMITATION THE AS SESSING OFFICER COULD NOT VERIFY THE SAME. THE CIT(A) HAS NOT VERIFIED T HE PARTICULARS. HOWEVER, ON THE BASIS OF THE DETAILS FOUND IN THE C ONFIRMATION LETTERS, THE CIT(A) DELETED THE ADDITION MADE IN RESPECT OF 55 CASES. IN OUR OPINION, THE MATTER NEEDS TO BE EXAMINED BY THE ASS ESSING OFFICER ON THE BASIS OF MATERIAL FILED BY THE ASSESSEE. WHEN THE ASSESSEE FILED THE CONFIRMATION LETTERS, PA NO., MODE OF INVESTMEN T AND SOURCE OF FUNDS FOR THE INVESTMENT BEFORE THE ASSESSING OFFIC ER, EVEN THOUGH ON THE LAST DAY, THE CIT(A) OUGHT TO HAVE EXAMINED THE SAME BY CALLING FOR A REMAND REPORT. WITHOUT EXAMINATION OF THE SAME, THE CIT(A) IS NOT I.T.A. NO.996 & CO.50/H YD/2010 M/S. SREE RAMAKRISHNA ALLOYS LTD. ========================== 5 JUSTIFIED IN ACCEPTING THE CLAIM OF THE ASSESSEE WI TH REGARD TO 55 CASES. MOREOVER, WHEN THE NAMES AN ADDRESS OF THE SHAREHOL DERS ARE AVAILABLE IT CAN VERY WELL BE EXAMINED BY THE ASSES SING OFFICER AS TO WHETHER THEY HAVE IN FACT DEPOSITED THE FUNDS AS CL AIMED BY THE ASSESSEE OR THE FUNDS WERE FLOWN FROM THE CORPUS OF THE ASSESSEE COMPANY. THE MATERIAL AVAILABLE ON RECORD WAS NOT EXAMINED BY THE LOWER AUTHORITIES. IN OUR OPINION, THE ASSESSING O FFICER HAS TO RE- EXAMINE THE ISSUE AFRESH. ACCORDINGLY WE SET ASIDE THE ORDER OF THE LOWER AUTHORITIES AND REMAND BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL EXA MINE THE MATERIALS FILED BY THE ASSESSEE AND THEREAFTER DECIDE THE ISS UE IN ACCORDANCE WITH LAW AFTER GIVING A REASONABLE OPPORTUNITY OF B EING HEARD TO THE ASSESSEE. WE MAKE IT CLEAR THAT IS ALSO OPEN TO TH E ASSESSEE TO FILE ALL THE MATERIALS WHICH ARE RELEVANT FOR COMPLETING THE ASSESSMENT. 6. WITH THE ABOVE OBSERVATIONS, BOTH THE APPEAL OF THE REVENUE AND THE CO OF THE ASSESSEE ARE ALLOWED FOR STATISTI CAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29TH DECEMBER, 2010. SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER SD/- (N.R.S. GANESAN) JUDICIAL MEMBER HYDERABAD, DATED 29TH DECEMBER, 2010 TPRAO I.T.A. NO.996 & CO.50/H YD/2010 M/S. SREE RAMAKRISHNA ALLOYS LTD. ========================== 6 COPY FORWARDED TO: 1. THE ADDL. CIT< RANGE 9, 2ND FLOOR, 'D' BLOCK, I. T. TOWERS, A.C. GUARDS, HYDERABAD-4. 2. M/S. SREE RAMAKRISHNA ALLOYS LTD., 1-2-270/45/1, KUDA KUDA ROAD, SURYAPET, NALGONDA DISTRICT., A.P. 3. THE CIT(A)-VI, HYDERABAD. 4 THE CIT-VI, HYDERABAD 5. THE DR A BENCH, ITAT, HYDERABAD