Krishnapatnam Port Company Limited, Hyderabad V. Dy. Commissioner of Income Tax, Central Circle-1(1), Hyderabad

ITA 1085/Hyd/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9869 (ITAT-HYDERABAD)
• Duration Of Justice: 4 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 19-07-2021
• Assessment Year: 2012-2013
• Appeal Filed On: 27-06-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DANDA SRINIVAS
• Keywords: Business income; Bad and doubtful debts
• Section: 153A; 115JB; 80IA; 64; 13; 22; 131; 6; 263; 10; 2; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD. BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI L . P . SAHU, ACCOUNTANT MEMBER (THROUGH VIRTUAL HEARING) ITA NO S . 899 TO 901 & 1083 TO 1086 /HYD/20 17 (ASSESSMENT YEAR S : 20 10 - 11 TO 2013 - 14 ) M/S. KRISHNAPATNAM PORT COMPANY LTD., HYDERABAD. PAN AAACK 8657J ..APPELLANT. VS. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1(1), H YDERABAD. ..RESPONDENT. APPELLANT BY : SHRI MOHD . AFZAL. RESPONDENT BY : SHRI DANDA SRINIVAS. (D.R.) DATE OF HEARING : 19.07 . 2021. DATE OF PRONOUNCEMENT : 22 .0 7 .2021. O R D E R PER SHRI S.S. GODARA, J.M. : THE INSTANT BATCH OF SEVEN APPEALS PERTAINS TO A SINGLE ASSESSEE HEREIN M/S. KRISHNAPATNAM PORT COMPANY LIMITED. ITS APPEALS ITA NOS.1083 TO 1086/HYD/2017 ARISE FROM THE COMMISSIONER OF INCOME TAX (APPEALS) - 11 , HYDERABAD COMMON ORDER DT.31.03.2017 PASSED IN CASE NOS.022 TO 025/DCIT/CC - 1(1)/CIT(A) - 11/15 - 16 INVOLVING PROCEEDINGS U/S .143(3) R.W.S. 153A (FOR A.YS 2010 - 11 TO 2012 - 13) AND 2 ITA NO S . 899 TO 901 & 1083 TO 1086/HYD/2017 SEC.143(3) OF THE INCOME TAX ACT, 1961 ('THE ACT') FOR A.Y. 2013 - 14 . ITS LAT T ER SET OF THREE APPEALS ITA NOS.899 TO 901/HYD/2017 FOR A.YS 2010 - 11 TO 2012 - 13 ARE DIRECTED AGAINST THE PCIT (CENTRAL CIRCLE) S SEPARATE ORDERS DT.27.3.2017 IN CASE NOS. PCIT(C)/HYD/263/08 , 10 & 11 /2016 - 17 , PCIT(C)/HYD/263/10/2016 - 17 AND IN ASSESSMENT YEAR S 2010 - 11 AND 2011 - 12 ; RESPECTIVELY I N PROCEEDINGS U/S. 263 OF THE INCOME TAX ACT, 1961 ('THE ACT'). HEARD BOTH THE PARTIES. CASE FILES PERUSED. 2. IT EMERGES AT THE OUTSET THAT THIS ASSESSEE HAD FILED ITS REGULAR RETURNS ON 1.10.2010, 28.9.2011, 28.9.2012 AND 29.11.2013 RE GARDING ASSESSMENT YEARS 2010 - 11 TO 2013 - 14; RESPECTIVELY. ALL TH IS FOLLOWED THE IMPUGNED SEARCH ACTION DT.14.12.2012 LEADING TO INITIATION OF 153A PROCEEDINGS FINALLY CULMINATING IN CORRESPONDING ASSESSMENT FRAMED O N 31.3.2015 IN THE SE FOUR ASSESSMENT YE ARS. THE ASSESSING OFFICER MAINLY DISALLOWED ITS CLAIM OF 80IA DEDUCTION ALONG WITH VARIOUS MISCELLANEOUS HEADS. THE CIT(A) HAS CONFIRMED THE SAME. 3. THE FIRST AND FOREMOST ISSUE THAT ARISES FOR OUR APT ADJUDICATION IN FORMER TWIN ASSESSMENT YEARS 2010 - 11 & 2011 - 12 IS AS TO WHETHER 3 ITA NO S . 899 TO 901 & 1083 TO 1086/HYD/2017 REGULAR ASSESSMENT S IN ASSESSEE'S CASES COULD BE HELD TO BE PENDING AS PER SECTION 153A(1) SECOND PROVISO OR NOT. LEARNED CIT - DR FAILS TO DISPUTE THE CLINCHING STATUTORY PROVISION I.E. 143 (2) SECOND PROVISO ENVISAGES T IME LIMIT OF SIX MONTHS FROM THE END OF THE RELEVANT ASSESSMENT YEAR COMING TO 30.09.2011 AND 30.09.2012 HAD ALREADY EXPIRED BEFORE THE DATE OF SEARCH ON 14.12.2012 (SUPRA). NO ASSESSMENT IN THESE TWO ASSESSMENT YEARS COULD BE HELD TO BE PENDING WHICH COU LD BE TAKEN AS ABATED. AND ALSO THAT THE ASSESSEE HAD RAISED ALL THE CORRESPONDING CLAIMS IN REGULAR COMPUTATION WHILE FILING THE FOREGOING REGULAR RETURNS. WE THUS QUOTE CIT VS. KABUL CHAWLA (2016) 380 ITR 573 (DELHI); CIT VS. SALA S AR STOCK BROKING LTD. (CAL. H C IN GA 1929/2016) DT.24.8.2016, CIT VS. CONTINENTAL WAREHOUSING COPORATION (2015) 374 ITR 64 (BOM) THAT SECTION 153A PROCEEDINGS IN SUCH INSTANCE OF UNABATED ASSESSMENT COULD ONLY BE INITIATED IN CASE IF ANY INCRIMINATING MATERI AL IS FOUND OR SEIZED DURING THE COURSE OF SEARCH. WE HAVE NOT COME ACROSS ANY SUCH INCRIMINATING MATERIAL RELIED UPON BY THE LEARNED LOWER AUTHORITIES IN A.YS 2010 - 11 & 2011 - 12. WE THUS DECLINE THE REVENUES ARGUMENT QUOTING EN GOPA KUMAR VS. CIT (2016 ) 390 ITR 131 4 ITA NO S . 899 TO 901 & 1083 TO 1086/HYD/2017 (K ER ), CIT VS. KESARWANI ZARDA BHANDAR ITA NO.270/2014 AND CIT VS. RAJKUMAR ARORA 367 ITR 517 (ALL) TO HOLD THAT THE IMPUGNED ASSESSMENTS ARE NOT SUSTAINABLE IN LAW SINCE NOT BASED ON ANY INCRIMINATING MATERIAL FOUND OR SEIZED DURING THE CO URSE OF SEARCH. THE SAME STANDS QUASHED IN THE FORMER TWIN ASSESSMENT YEARS 2010 - 11 AND 2011 - 12. THE ASSESSEE'S CORRESPONDING APPEALS ITA NOS.1083 AND 1084/HYD/2017 ARE ACCEPTED ON THE FORGOING LEGAL ISSUE THEREBY RENDERING ALL OTHER PLEADINGS ON MERIT BE ING RENDERED INFRUCTUOUS. 4. WE NEXT ADVERT TO THE ASSESSEE'S CORRESPONDING SECTION 263 APPEALS ITA NOS.899 & 900/HYD/2017 PERTAINING TO THESE ASSESSMENT YEARS 2010 - 11 AND 2011 - 12 WHEREIN THE LEARNED PCIT HAS EXERCISED ITS REVISION JURISDICTION THERE BY TERMING THE ASSESSING OFFICERS ASSESSMENT DT.31.3.2015 AS ERRONEOUS ONE S CAUSING PREJUDICE TO I NTEREST OF THE REVENUE. WE KEEP IN MIND THE FACT THAT THE SAID ASSESSMENTS HAVE ALREADY BEEN QUASHED IN ASSESSEE'S FOREGOING APPEAL S IN PRECEDING PARAGRAPH S AND HOLD THAT THE LEARNED PCIT REVISION DIRECTION FORMING SUBJECT MATTER OF ADJUDICATION HAVE NO LEGS TO STAND. THE SAME ALSO 5 ITA NO S . 899 TO 901 & 1083 TO 1086/HYD/2017 F OLLOW SUIT THEREFORE. THE SE ASSESSEE'S CASES ITA 899 & 900/HYD/2017 ARE ALSO ACCEPTED IN THE VERY TERMS THEREFORE . 5. WE NEXT ADVERT TO ASSESSEE'S APPEALS ITA 1085 & 1086/HYD/2017 FOR THE A.YS 2012 - 13 AND 2013 - 14S ABATED ASSESSMENTS. ITS SOLE IDENTICAL SUBSTANTIVE GRIEVANCE IS THAT THE LEARNED LOWER AUTHORITIES HAVE ERRED IN LAW AND ON FACTS IN TREATING THE INTEREST INCOME(S) IN THESE TWIN ASSESSMENT YEARS AS INCOME FROM OTHER SOURCES THAN ELIGIBLE FOR SECTION 80IA DEDUCTION AS BUSINESS INCOME . WE PRIMA FACIE NOTICE THAT THE ASSESSEES INCOME FROM OTHER SOURCES ALSO INCLUDE D DIVIDEND FROM MUTUAL FUNDS AND RENTAL RECEIPTS, ETC. THERE IS NO INDICATION AT ALL IN THE LEARNED LOWER AUTHORITIES ORDER S AS TO WHETHER THE ASSESSEE HAD PROVED THE CORRESPONDING RECEIPT TO HAVE BEEN DERIVED FROM THE ELIGIBLE UNDERTAKING(S) OR NOT. F ACED WITH THIS SITUATION, WE DEEM IT APPROPRIATE TO RESTORE THE INSTANT IDENTICAL ISSUE BACK TO THE ASSESSING OFFICER TO BE EXAMINED AFRESH SUBJECT TO THE CONDITION THAT IT SHALL BE THE DUTY AND RESPONSIBILITY OF TH E TAX PAYER ONLY TO PROVE THE FOREGOING C LINCHING DIRECT NEXUS BETWEEN ITS INTEREST AND OTHER INCOME DERIVED FROM THE ELIGIBLE UNDERTAKING WITHIN THREE EFFECTIVE OPPORTUNITIES OF HEARING. WE 6 ITA NO S . 899 TO 901 & 1083 TO 1086/HYD/2017 ORDER ACCORDINGLY. THESE TWIN APPEALS ITA NOS.1085 & 1086/HYD/2017 ARE PARTLY ACCEPTED FOR STATISTICAL PURPOSES SINCE NO OTHER GROUND HAS BEEN PRESSED BEFORE US. 6. WE ARE NOW LEFT WITH THE ASSESSEE'S APPEAL ITA NO.901/HYD/2017 FOR ASSESSMENT YEAR 2012 - 13 . THE SAME PERTAINS TO THE EXERCISE OF THE PCITS REVISION JURISDICTION HOLDING THE CORRESPON DING ASSESSMENT DT.31.3.2015 AS AN ERRONEOUS ONE CAUSING PREJUDICE TO THE INTEREST OF REVENUE ON THE GROUND THAT THE ASSESSING OFFICER HAD FAILED TO COMPUTE 115JB SECTION MAT QUA ASSESSEE'S PROVISION FOR BAD AND DOUBTFUL DEBTS OF RS.1968.10 LAKHS AS PER EX PLN.( 1 ) (I) OF THE ACT . LEARNED COUNSEL SUBMITTED BEFORE US THAT THE ASSESSEE HAD VERY WELL MA D E SIMULTANEOUS REDUCTION FROM THE LOANS AND ADVANCES ON THE ASSETS SIDE OF THE BALANCE SHEET WHICH AMOUNTED TO WRITE OF OF THE SAID DEBTS NOT HIT BY THE FOREGOIN G STATUTORY PROVISION. MR. AFZAL QUOTED HONBLE GUJARAT HIGH COURTS F ULL B ENCH DECISION IN CIT VS. VODAFONE ESSAR GUJARAT LIMITED DT.4.8.2017. WE FIND NO MERIT IN THE ASSESSEE'S FOREGOING ARGUMENT SINCE IT HAS NOT PLACED ON RECORD THE CORRESPONDING BOOK S OF ACCOUNT SUGGESTING CORRESPONDING SIMULTANEOUS REDUCTION O F THE LOANS AND 7 ITA NO S . 899 TO 901 & 1083 TO 1086/HYD/2017 ADVANCES ON THE ASSET SIDE OF THE BALANCE SHEET. WE THUS QUOTE HON'BLE APEX COURT LANDMARK DECISION IN MALABAR INDUSTRIAL COMPANY LTD. VS. CIT 243 ITR 83 (SC) AND HOLD THAT THE LEARNED PCIT HAS RIGHTLY EXERCISED ITS 263 REVISION JURISDICTION IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE. THE SAME STAND CONFIRMED. THE ASSESSEE'S INSTANT APPEAL ITA NO.901/HYD/2017 FAILS. 7. TO SUM UP, ASSESSEE'S APPEALS ITA NOS.1083, 10 84, 899 & 900/HYD/2017 ARE ALLOWED. ITS NEXT TWIN APPEALS ITA NOS.1085 & 1086/HYD/2017 ARE ALLOWED FOR STATISTICAL PURPOSE S AND ITA NO.901/HYD/2017 IS DISMISSED. ORDERED ACCORDINGLY. A COPY OF THIS COMMON ORDER BE PLACED IN THE RESPECTIVE FILES. ORDER PRONOUNCED IN THE OPEN COURT ON 22ND JU LY , 2021. SD/ - SD/ - (L .P. SAHU) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DT. 22 .0 7 .2021. * REDDY GP 8 ITA NO S . 899 TO 901 & 1083 TO 1086/HYD/2017 COPY TO : 1. M/S. KRISHNAPATNAM PORT COMPANY LTD., SMR HOUSE, PLOT NO.73, PLOT NO.379, ROAD NO.10, JUBILEE HILLS, HYDERABAD. 2. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1(1), HYDERABAD. 3. PR. C I T (CENTRAL) , HYDERABAD. 4. CIT(APPEALS) - 11, HYDERABAD. 5. DR, ITAT, HYDERABAD. 6. GUARD FILE. BY ORDER SR. PVT. SECRETARY, ITAT, HYDERABAD.