Gamya Infrastructure Services Private Limited, Hyderabad V. Income Tax Officer, Ward-2(2), Hyderabad

ITA 1065/Hyd/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7470 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 17-10-2018
• Assessment Year: 2013-2014
• Appeal Filed On: 22-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C SRINIVAS REDDY
• Assessee Lawyers: V RAGHAVENDRA RAO
• Keywords: Additional evidence
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER I.T.A. NO. 1065/HYD/2017 ASSESSMENT YEAR: 2013-14 GAMYA INFRASTRUCTURE SERVICES PRIVATE LIMITED, HYDERABAD [PAN: AAECG2658R] VS THE INCOME TAX OFFICER, WARD-2(2) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI V. RAGHAVENDRA RAO, AR FOR REVENUE : SHRI C. SRINIVAS REDDY, DR DATE OF HEARING : 17-10-2018 DATE OF PRONOUNCEMENT : 16-01-2019 O R D E R PER SMT. P. MADHAVI DEVI, J.M. : THIS IS AN ASSESSEES APPEAL AGAINST THE ORDER OF TH E COMMISSIONER OF INCOME TAX (APPEALS)-2, HYDERABAD, DATED 31-03-2017. ASSESSEE HAS RAISED THE FOLLOWING GROUN DS OF APPEAL: 1) THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-2, HYDERABAD, DATED 31/03/2017 IS AGAINST LAW AND FACT S OF THE CASE AND OUGHT NOT TO HAVE DISMISSED THE APPEAL OF THE A PPELLANT HAVING REGARD TO THE FACTS OF THE CASE. 2) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -2, OUGHT NOT TO HAVE DISMISSED THE APPEAL FOR NON-PROSECUTION OF TH E APPEAL AS THE APPEARANCE COULD NOT BE CAUSED ON ACCOUNT OF FACTOR S WHICH ARE BEYOND THE CONTROL OF THE APPELLANT. ITA. NO. 1065/HYD/2017 :- 2 -: 3) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -2, OUGHT NOT TO HAVE CONFIRMED THE ADDITION OF RS.16,40,50,000/- ON ACCOUNT OF RECEIPT OF SHARE APPLICATION MONEY AS THE APPELLANT DISCHARGED THE PRIMARY ONUS OF PROVING SAID CREDITS BY FILING CONF IRMATION LETTERS FROM RESPECTIVE PARTIES. 4) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -2, OUGHT NOT TO HAVE CONFIRMED THE DISALLOWANCE OF EXPENSES OF RS.7 0,275/-, SINCE THE ENTIRE EXPENDITURE WAS INCURRED IN THE COURSE O F BUSINESS AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. 5) IN ANY EVENT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-2, OUGHT TO HAVE APPRECIATED THAT THE APPELLANT CANNOT BE EXPECTED TO PROVE THE SOURCE OF THE SOURCE OF CREDITS APPEARING IN THE BOOKS OF THE APPELLANT. 6) THE APPELLANT CRAVES LEAVE TO ADD, ALTER, VARY, OMIT, SUBSTITUTE OR AMEND THE ABOVE GROUNDS OF APPEAL, AT ANY TIME BEFO RE OR AT, THE TIME OF HEARING OF THE APPEAL. FURTHER, ON 14-08-2018, ASSESSEE HAS RAISED THE FOLLOWING ADDITIONAL GROUNDS OF APPEAL: 1. THE APPELLANT CRAVES LEAVE OF THE HON 'BLE INCO ME TAX APPELLATE TRIBUNAL, BENCH 'A' TO PRESENT ADDITIONAL GROUNDS O F APPEAL, IN THE MATTER OF THE ABOVE APPEAL FILED ON 22.06.2017. 2. THE ISSUES IN APPEAL ARE THE APPELLATE ORDER PAS SED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), HYDER ABAD [CIT(A)] EX-PARTE BY FAILURE TO NOTICE THE RESPONSE OF THE A SSESSEE TO THE POSTING NOTICES BY THE OFFICE OF THE CIT(A) AND THE ADDITION MADE IN THE ASSESSMENT U/S. 68 OF THE INCOME TAX ACT OF RS. 16,20,50,000/- AND DISALLOWANCE OF EXPENSES OF RS. 71,275/-. ASSES SEE RECEIVED INVESTMENTS FROM 18 INVESTORS DURING THE PREVIOUS Y EAR UNDER THE HEAD 'SHARE APPLICATION MONEY' PENDING ALLOTMENT. 3. OUT OF EIGHTEEN INVESTORS, IN THE CASE OF NINE I NVESTORS, ASSESSEE FILED CONFIRMATION LETTERS FROM THEM SPECIFYING THE NATURE AND SOURCE OF INVESTMENT, IN EACH OF THE LETTERS. ASSESSEE COU LD NOT PRODUCE CONFIRMATION LETTERS FROM THE REMAINING INVESTORS F OR WANT OF ADEQUATE OPPORTUNITY. ITA. NO. 1065/HYD/2017 :- 3 -: 4. A.O DID NOT ACCEPT THE INVESTMENT IN THE CASES O F THE NINE PERSONS WHO FILED CONFIRMATION LETTERS ON THE GROUND THAT T HE ASSESSEE DID NOT FILE COPIES OF THEIR (INVESTORS) BANK ACCOUNTS AND INCOME TAX RETURNS IN SUPPORT OF CONFIRMATION LETTERS. AND IN REGARD T O OTHER NINE INVESTORS, ADDITION HAS BEEN MADE FOR WANT OF CONFI RMATION LETTERS. 5. DISALLOWANCE OF EXPENDITURE OF RS. 70,275/- INCU RRED TO MAINTAIN THE STATUS OF THE COMPANY FOR COMPLIANCE WITH STATU TORY PROVISIONS RELATING TO COMPANY LAW HAS NOT BEEN ALLOWED ON THE GROUND THAT THE ASSESSEE DID NOT HAVE TAXABLE INCOME. 6. ON APPEAL, THE LEARNED CIT(A) DISMISSED THE APPE AL EX-PARTE FOR REASON OF LACK OF RESPONSE TO POSTING NOTICES. ON M ERITS HE UPHELD THE FINDINGS OF THE A.O. IN FACT, THE ASSESSEE HAS RESP ONDED TO THE POSTING NOTICES REQUESTING FOR ADJOURNMENT WHICH TH E LEARNED CIT(A) FAILED TO TAKE NOTE. 7. WHILE FILING THE GROUNDS OF APPEAL BEFORE THE HO N'BLE TRIBUNAL, THE ASSESSEE DID NOT RAISE GROUNDS OF APPEAL WHICH ACTU ALLY WOULD GO TO ROOT OF THE MATTER. THEREFORE THE ASSESSEE CRAVES L EAVE OF THE HON'BLE TRIBUNAL TO FILE ADDITIONAL GROUNDS OF APPEAL. 8. IT IS SUBMITTED THAT THE ADDITIONAL GROUNDS OF A PPEAL COVERING FUNDAMENTAL ISSUES WERE NOT RAISED IN PROPER DETAIL BY OVERSIGHT AND INADVERTENCE. IT IS SUBMITTED THAT OVERSIGHT AND IN ADVERTENCE IS A COMMON HUMAN FAILING. THE OMISSION TO FILE ADDITION AL GROUNDS OF APPEAL OCCURRED FOR BONA FIDE REASONS AND NOT AFTER INTENTIONAL OR DELIBERATE CONSIDERATION. 9. IT IS HUMBLY AND EARNESTLY PRAYED THAT ADDITIONA L GROUNDS OF APPEAL BE KINDLY ADMITTED FOR CONSIDERATION. OTHERW ISE THE INTERESTS OF ASSESSEE WILL FALL IN GREAT JEOPARDY. IT IS PLEA DED THAT ADMISSION OF ADDITIONAL GROUNDS OF APPEAL WILL BE IN THE INTERES TS OF JUSTICE, IN THE FACTS AND CIRCUMSTANCES OF THE CASE. IN SUPPORT OF THE GROUNDS OF APPEAL, ASSESSEE HAS AL SO FILED FRESH EVIDENCE UNDER RULE 29 OF THE ITAT RULES AND S OUGHT ADMISSION OF THE SAME. 2. BRIEF FACTS OF THE CASE ARE THAT, ASSESSEE-COMPANY F ILED ITS RETURN OF INCOME FOR THE AY. 2013-14 ON 14-03-2015 ITA. NO. 1065/HYD/2017 :- 4 -: ADMITTING NIL INCOME. THE CASE WAS SELECTED FOR SCRUTI NY UNDER CASS. NOTICE U/S. 143(2) OF THE INCOME TAX AC T [ACT] DT. 18-09-2015 WAS ISSUED AND DULY SERVED ON THE ASSESSE E. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE REPRESENTATIVES OF THE ASSESSEE APPEARED FROM TIME TO TI ME AND FURNISHED INFORMATION CALLED FOR BUT DID NOT PRODUCE TH E BOOKS OF ACCOUNT. AFTER EXAMINATION OF THE INFORMATION FURNI SHED, THE ASSESSING OFFICER OBSERVED FROM THE FY. 2012-13 THAT THE ASSESSEE RECEIVED SHARE APPLICATION MONEY PENDING A LLOTMENT TO AN EXTENT OF RS. 16,40,50,000/- FROM VARIOUS PARTIES . ASSESSEE WAS THEREFORE ASKED TO SUBMIT THE CONFIRMATION LETTERS, BANK ACCOUNT STATEMENTS AND INCOME TAX RETURNS IN RESPECT OF THIS SHARE APPLICATION MONEY. HOWEVER, ASSE SSEE COULD PRODUCE CONFIRMATION LETTERS OF FEW OF THE PARTI ES, THE BANK ACCOUNT STATEMENTS AND INCOME TAX RETURNS OF THE SAID PARTIES. ASSESSEE, HOWEVER, COULD NOT SUBMIT THE CONFI RMATIONS FROM THE BALANCE OF THE PARTIES. OBSERVING THAT THE ASSE SSEE HAS FAILED TO DISCHARGE THE ONUS TO ESTABLISH THE THREE LIMBS OF THE PROVISIONS OF SECTION 68 OF THE ACT I.E., - IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE PARTIES WITH RESPECT TO SHARE APPLICATION MONEY OF RS. 16,40,50,000/-, ASS ESSING OFFICER TREATED IT AS UNEXPLAINED INCOME AND BROUGHT I T TO TAX U/S. 68 OF THE ACT. 2.1. FURTHER, ASSESSING OFFICER ALSO OBSERVED THAT ASS ESSEE- COMPANY BOOKED EXPENSES OF RS. 70,275/- AND DISALLO WED THE SAME HOLDING THAT THEY DO NOT RELATE TO THE INCOME EARNE D DURING THE YEAR. ITA. NO. 1065/HYD/2017 :- 5 -: 3. AGGRIEVED, ASSESSEE FILED AN APPEAL BEFORE THE CI T(A), STATING THAT THE INVESTMENTS ARE NOT CASH DEPOSITS BUT CAM E THROUGH ACCOUNT PAYEE CHEQUES. THEREFORE, THE IDENTITY OF THE PERSONS HAS BEEN PROVED. THE CIT(A), HOWEVER, OBSE RVED THAT INSPITE OF SEVERAL OPPORTUNITIES GIVEN TO THE ASSESSEE , NONE APPEARED BEFORE HIM. THEREFORE, HE DECIDED TO DISMI SS THE APPEAL AGAINST THE ASSESSEE. 4. AGGRIEVED, ASSESSEE HAS FILED THE SECOND APPEAL B EFORE US ALONG WITH RELEVANT INFORMATION IN THE FORM OF ADDITIONA L EVIDENCE. SINCE THE ADDITIONAL GROUNDS OF APPEAL AND ADDITIONAL EVIDENCES ARE ALL IN RELATION TO THE ADDITI ONS MADE BY THE ASSESSING OFFICER AND NO VERIFICATION OF FRESH FACTS ARE NECESSARY, WE ARE INCLINED TO ADMIT THE SAME AND REMIT THE SAME TO THE FILE OF ASSESSING OFFICER FOR DENOVO CONSIDERATION IN ACCORDANCE WITH LAW. NEEDLESS TO MENTION THAT ASSES SEE SHALL BE GIVEN A FAIR OPPORTUNITY OF HEARING. 5. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH JANUARY, 2019 SD/- SD/- (S. RIFAUR RAHMAN) (P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMB ER HYDERABAD, DATED 16 TH JANUARY, 2019 TNMM ITA. NO. 1065/HYD/2017 :- 6 -: COPY TO : 1. GAMYA INFRASTRUCTURE SERVICES PRIVATE LIMITED, C /O. P.R. DATLA & CO., CHARTERED ACCOUNTANTS, 6-3-788/A/ 9, FIRST FLOOR, DURGA NAGAR, AMEER PET, HYDERABAD. 2. THE INCOME TAX OFFICER, WARD-2(2), HYDERABAD. 3. CIT(A)-2, HYDERABAD. 4. PR.CIT-2, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.