ITO Ward-11(1), Hyderabad V. M/s. Sun Biotech Labs, Hyderabad

ITA 1031/HYD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66148 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 26-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMISHA S GUPT
• Assessee Lawyers: V SIVA KUMAR
• Keywords: Source of fund; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER I.T.A. NO. 1031/HYD/2011 ASSESSMENT YEAR 2006-07 INCOME TAX OFFICER WARD-11(1) HYDERABAD VS. M/S. SUN BIOTECH LABS HYDERABAD PAN; ABDFS7996M APPELLANT RESPONDENT APPELLANT BY: SMT. AMISHA S. GUPT RESPONDENT BY: SRI V. SIVA KUMAR DATE OF HEARING: 25 .07.2012 DATE OF PRONOUNCEMENT: 10.08.2012 O R D E R PER CHANDRA POOJARI, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-VI, HYDERA BAD DATED 15.2.2011 FOR ASSESSMENT YEAR 2006-07. 2. THE REVENUE RAISED THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL: 2. THE CIT(A) ERRED IN HOLDING THAT THE SOURCES OF THE PARTNERS AS EXPLAINED, THOUGH THE SAME WERE NOT VERIFIED BY THE ASSESSING OFFICER. 3. THE CIT(A) OUGHT TO HAVE CONFIRMED THE ASSESSMENT AS THE EVIDENCES SUBMITTED BY THE ASSESSEE ARE NOT BASED ON ANY FACTS. 3. BRIEF FACTS OF THE ISSUE ARE THAT THE ASSESSEE FILE D A 'NIL' RETURN OF INCOME. THE RETURN WAS PROCESSED U/S. 14 3(1) OF THE IT ACT. DURING THE SCRUTINY ASSESSMENT OF THE RETURN OF INCOME, IT WAS OBSERVED BY THE ASSESSING OFFICER THAT THERE WA S AN I.T.A. NO. 1031/HYD/2011 M/S. SUN BIOTECH LABS ===================== 2 INTRODUCTION OF CASH DEPOSIT AND BANK DEPOSIT IN TH E FIRM BOOKS TO THE TUNE OF RS. 62,28,000. THE ASSESSEE WAS ASKE D TO SUBSTANTIATE THESE CREDITS. IT WAS EXPLAINED THAT IT WAS THE CAPITAL INTRODUCED BY THE PARTNERS. THE ASSESSEE ALSO TAKE N A PLEA THAT THE PARTNERS HAVE AGRICULTURAL INCOME. FOR THIS EF FECT, THE ASSESSEE FILED CERTIFICATES FROM TAHSILDAR BUT THE DETAILS OF BANK ACCOUNTS OF THE PARTNERS WERE NOT PRODUCED. IN THE OPINION OF THE ASSESSING OFFICER, THE CREDITS ARE NOT SATISFAC TORILY EXPLAINED. HE, THEREFORE, TREATED THE SAME AS UNEXPLAINED CRED ITS U/S. 68 OF THE INCOME-TAX ACT, 1961. ON APPEAL, THE CIT(A), A FTER CALLING FOR A REMAND REPORT DELETED THE ADDITION TO THE TUNE OF RS. 61,56,500. AGAINST THIS DECISION OF THE CIT(A), TH E REVENUE IS IN APPEAL BEFORE US. 4. THE LEARNED DR SUBMITTED THAT THE CIT(A) ADMITTED CERTAIN ADDITIONAL EVIDENCE IN THE FORM OF CONFIRMA TION LETTERS, PATTADAR PASSBOOKS, LAND HOLDING CERTIFICATES, SALE DEED IN RESPECT OF AGRICULTURAL LAND, INCOME PROOF CERTIFICATE, ETC ., IN RESPECT OF PARTNERS AS WELL AS OTHER PERSONS WHO HAVE ADVANCED MONEY TO THE PARTNERS. SHE SUBMITTED THAT THE PARTNERS ARE NOT HAVING ENOUGH SOURCE OF FUNDS TO INTRODUCE THE CAPITAL AND MOST OF THE PARTNERS USED THE LOANS OBTAINED FROM OTHER PARTNER S TO INTRODUCE THE CAPITAL IN THE FIRM. SHE SUBMITTED T HAT THE SOURCE OF FUNDS AVAILABLE TO THE PARTNERS HAS TO BE EXAMIN ED. 5. ON THE OTHER HAND, THE LEARNED AR SUBMITTED THAT TH E ASSESSING OFFICER HAVING SENT THE REMAND REPORT AGA INST THE ADDITIONAL EVIDENCE PRODUCED BY THE ASSESSEE BEFORE THE CIT(A), HE CANNOT HAVE ANY GRIEVANCE AND OUGHT NOT HAVE FIL ED THIS APPEAL. HE RELIED ON THE ORDER OF THE CIT(A). I.T.A. NO. 1031/HYD/2011 M/S. SUN BIOTECH LABS ===================== 3 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. THIS IS A PARTNERSHIP FIRM. WHEN THE P ARTNERS INTRODUCED CAPITAL INTO THE FIRM'S ACCOUNT BY CASH OR BY CHEQUE THE FIRM IS LIABLE TO EXPLAIN THE IDENTITY AND CAPA CITY OF THE PARTNERS AND GENUINENESS OF THE TRANSACTIONS. IT I S AN ADMITTED FACT THAT BEFORE THE ASSESSING OFFICER, THE ASSESSE E HAS NOT PRODUCED THE REQUISITE DETAILS. HOWEVER, CERTAIN E VIDENCES WERE PRODUCED BEFORE THE CIT(A). THESE EVIDENCES WERE N OT THOROUGHLY VERIFIED BY THE ASSESSING OFFICER. THER E IS ALSO NO RECORDING OF FACT BY THE CIT(A) THAT WHETHER THE EV IDENCES PRODUCED BY THE ASSESSEE ARE WITH REGARD TO AVAILAB ILITY OF FUNDS TO THE PARTNERS TO INTRODUCE THE SAME AS CAPITAL IN THE FIRM. IN OUR OPINION, IN ALL FAIRNESS, THIS ISSUE HAS TO GO BACK TO THE ASSESSING OFFICER FOR FRESH CONSIDERATION. ACCORDI NGLY, THE ORDER OF THE CIT(A) IS SET ASIDE AND THE ENTIRE ISSUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER TO VERIFY THE ADD ITIONAL EVIDENCES FILED BEFORE THE CIT(A) AND DECIDE THE ISSUE DE NOVO . 7. IN THE RESULT, THE APPEAL BY THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH AUGUST, 2012. SD/ - (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/ - (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED 10 TH AUGUST, 2012 TPRAO I.T.A. NO. 1031/HYD/2011 M/S. SUN BIOTECH LABS ===================== 4 COPY FORWARDED TO: 1. THE INCOME TAX OFFICER, WARD - 11(1), 6 TH FLOOR, B BLOCK, IT TOWERS, AC GUARDS, HYDERABAD. 2. M/S. SUN BIOTECH LABS, PLOT NO. 100, ALEAP INDUSTRI AL ESTATE, GAJULARAMARAM, JEEDIMETLA, HYDERABAD. 3. THE CIT - V I , HYDERABAD. 4. THE CIT - V , HYDERABAD. 5. THE DR B BENCH, ITAT, HYDERABAD