Appeal details
Counselvise Citation
[2020] 111 COUNSELVISE.COM (IT) 8256 (ITAT-HYDERABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
5 year(s) 1 month(s) 27 day(s)
Appellant
Respondent
Appeal Type
Cross Objection
Pronouncement Date
23-01-2020
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
DB-B
Assessment Year
2010-2011
Appeal Filed On
26-11-2014
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO. A.Y. APPELLANT RESPONDENT 1433/HYD/14 2010-11 THE INCOME TAX OFFICER, WARD-16(2), HYDERABAD M/S.PENN BIO CHEMICALS PVT LTD., HYDERABAD [PAN: AACCP0402E] 980/HYD/14 2010-11 M/S.PENN BIO CHEMICALS INDIA PVT LTD., HYDERABAD [PAN: AACCP0402E] THE INCOME TAX OFFICER, WARD-16(2), HYDERABAD C.O. NO. 62/HYD/2014 (IN ITA NO.1433/HYD/2014) ASSESSMENT YEAR: 2010-11 M/S.PENN BIO CHEMICALS PVT LTD., HYDERABAD [PAN: AACCP0402E] VS THE INCOME TAX OFFICER, WARD-16(2), HYDERABAD (CROSS-OBJECTOR) (RESPONDENT) FOR REVENUE : SHRI KIRAN KATTA, DR FOR ASSESSEE : NONE DATE OF HEARING : 20-01-2020 DATE OF PRONOUNCEMENT : 23-01-2020 O R D E R PER SMT. P. MADHAVI DEVI, J.M. : ALL THESE THREE APPEALS ARE FILED AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-V, HYDERABAD, DATED 27-03-2014. I.T.A. NOS. 1433 & 980/HYD/2014 & C.O.NO. 62/HYD/2014 :- 2 -: 2. BRIEFLY STATED FACTS ARE THAT ASSESSEE-COMPANY, ENGA GED IN THE BUSINESS OF MANUFACTURE OF PHARMACEUTICALS, FILE D ITS RETURN OF INCOME FOR THE AY.2010-11 ON 18-10-2010, DECLARING T OTAL INCOME OF RS.13,53,145/-. THE RETURN OF INCOME WAS PROCESS ED U/S.143(1) OF THE INCOME TAX ACT [ACT] AND SUBSEQUENTLY, THE CAS E WAS SELECTED FOR SCRUTINY UNDER CASS. 3. DURING THE ASSESSMENT PROCEEDINGS U/S.143(3) OF THE ACT, THE ASSESSING OFFICER (AO) OBSERVED THAT (I) THE ASSESS EE HAS CLAIMED SUM OF RS.70.52 LAKHS U/S.35(2AB) OF THE ACT, BUT HAS NOT FILED FORM-3CL IN SUPPORT OF THE SAME; (II) THERE WERE OUTSTA NDING BALANCES OF SUNDRY CREDITORS I.E., MEHTA PHARMA, SATY ADEEPTH PHARMA, PIYUSH CHEMICALS AND J.P.PHARMA; (III) THER E WERE CASH DEPOSITS IN THE BANK ACCOUNTS OF SBI AND THE INDIAN B ANK; AND (IV) THERE WERE OUTSTANDING LIABILITIES OF EXCISE OF RS.19 .26 LAKHS AND VAT OF RS.9.29 LAKHS. THE ASSESSEE WAS DIRECTED TO EXPLAIN THE SAME, BUT SINCE THERE WAS NO COMPLIANCE, THE AO BROUG HT TO TAX THE UN-EXPLAINED SUNDRY CREDITORS OF RS.64,90,565/-, THE CLAIM OF DEDUCTION U/S.35(2AB) OF THE ACT AMOUNTING TO RS.70,52 ,875/- AND UN-EXPLAINED CASH DEPOSITS IN BANK, AMOUNTING TO RS.12,72,800/-. 3.1. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A), ALONG WITH ADDITIONAL EVIDENCE AND THE CIT(A) CALLED FOR REMAND REPORT FROM THE AO ON SUCH EVIDENCE FILED BY THE ASSE SSEE. THE AO FILED THE REMAND REPORT, STATING THAT THE EVIDENCE FILED BY THE ASSESSEE IS NOT RELIABLE. THE ASSESSEE ALSO FILED ITS REPLY TO THE REMAND REPORT AND THEREAFTER, THE CIT(A) DELETED THE ADDI TION OF UN-EXPLAINED CASH DEPOSITS INTO BANK ACCOUNTS AND ALS O THE I.T.A. NOS. 1433 & 980/HYD/2014 & C.O.NO. 62/HYD/2014 :- 3 -: SUNDRY CREDITORS OF RS.64,90,565/-. HOWEVER, HE CONF IRMED THE DISALLOWANCE OF RS.70,52,875/- ON THE GROUND THAT THE ASSESSEE HAS NOT FILED RELEVANT FORMS IN SUPPORT OF THE CLAIM U /S.35(2AB) OF THE ACT. AGAINST THE RELIEF GRANTED BY THE CIT(A), THE REVENUE I S IN APPEAL BEFORE US AND THE ASSESSEE IS IN APPEAL AGAIN ST THE CONFIRMATION OF THE DISALLOWANCE OF CLAIM U/S.35(2AB) OF THE ACT. 4. AT THE TIME OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE. 5. THE LD.DR HAS FILED THE COPY OF REPORT OF THE AO TH AT THE NOTICE OF HEARING BEFORE THE TRIBUNAL HAS BEEN SERVED AT THE LAST KNOWN ADDRESS OF THE ASSESSEE BY WAY OF AFFIXTURE. SI NCE THERE IS NO COMPLIANCE OR APPEARANCE BY THE ASSESSEE BEFORE T HE TRIBUNAL, WE ARE CONSTRAINED TO CONSIDER THE MERITS OF THE ISSUE EX-PARTE THE ASSESSEE. 6. HAVING REGARD TO THE FACT THAT WITH REGARD TO THE SUND RY CREDITORS, THE ASSESSEE HAS FILED CONFIRMATION LETTERS OF THE CREDITORS BEFORE THE CIT(A) AND IN THE REMAND REPORT CA LLED FOR ON THOSE CONFIRMATION LETTERS FROM THE AO BY THE CIT(A), THE RE IS NO COMMENT BY THE AO, BUT THE CIT(A) HAS DELETED THE ADDITIO N MADE BY THE AO, WE ARE OF THE OPINION THAT THE ISSUE NEEDS TO BE REMANDED TO THE FILE OF CIT(A) FOR RECALLING A REMAND REPORT ON THE SAME AND RE-CONSIDER THE ISSUE IN ACCORDANCE WITH LAW . EVEN WITH REGARD TO THE DISALLOWANCE CLAIM U/S.35(2AB) OF THE A CT, WHICH IS THE ISSUE IN THE ASSESSEES APPEAL AND CROSS-OBJECTI ON, WE FIND THAT THIS ISSUE ALSO NEEDS RE-CONSIDERATION BY THE CIT(A) A S THE RELEVANT I.T.A. NOS. 1433 & 980/HYD/2014 & C.O.NO. 62/HYD/2014 :- 4 -: FORMS MIGHT HAVE BEEN RECEIVED BY THE ASSESSEE SUBSEQ UENTLY FROM THE RELEVANT MINISTRY. THEREFORE, BOTH THE APPEALS OF A SSESSEE AND THE REVENUE AS WELL AS THE CROSS-OBJECTIONS OF ASSESSE E ARE REMANDED TO THE FILE OF CIT(A) FOR RE-CONSIDERATION AN D RE-ADJUDICATION ON MERITS, IN ACCORDANCE WITH LAW. 7. IN THE RESULT, BOTH THE APPEALS OF ASSESSEE AND THE REVENUE AS WELL AS THE CROSS-OBJECTIONS OF ASSESSEE ARE TREATE D AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD JANUARY, 2020 SD/- SD/- ( A. MOHAN ALANKAMONY ) ( P. MADHAVI DEVI ) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 23 RD JANUARY, 2020 TNMM I.T.A. NOS. 1433 & 980/HYD/2014 & C.O.NO. 62/HYD/2014 :- 5 -: COPY TO : 1. THE INCOME TAX OFFICER, WARD-16(2), HYDERABAD. 2. M/S.PENN BIO CHEMICALS INDIA PVT.LTD., 141/B, ID A, MALLAPUR, HYDERABAD. 3. CIT (APPEALS)-V, HYDERABAD. 4. THE CIT-IV, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.
