Malaxmi Agri Ventures Private Limited , Hyderabad V. Income Tax Officer, Ward-16(4), Hyderabad

ITA 1214/Hyd/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 5032 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2015-2016
• Appeal Filed On: 31-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K P R R MURTY
• Keywords: Depreciation
• Section: 234B; 115JB

Judgement Text

ITA No 1214 of 2019 Malaxmi Agri Ventures P Ltd Hyderabad Page 1 of 6 आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ A‘ Bench, Hyderabad Before Shri R.K. Panda, Accountant Member AND Shri Laliet Kumar, Judicial Member ITA No.1214/Hyd/2019 Assessment Year: 2015-16 Malaxmi Agri Ventures Private Limited, Hyderabad PAN:AACCC6517F Vs. Income Tax Officer Ward 16(4) Hyderabad (Appellant) (Respondent) Assessee by : Shri Pawan Kumar Chakrapani Revenue by: Shri K P R R Murty, DR Date of hearing: 20/07/2022 Date of pronouncement: 21/07/2022 ORDER Per R.K. Panda, A.M This appeal filed by the assessee is directed against the order dated 28.05.2019 of the learned CIT (A)-4, Hyderabad relating to A.Y.2015-16 2. Facts of the case, in brief, are that the assessee is a private limited company engaged in the business of contract farming and produce and produced cotton, red gram and alfalfa fodder and filed its return of income for the A.Y 2015-16 on 30.09.2015 declaring loss of Rs. 76,90,846/- under the normal provisions and book loss of Rs.71,47,302 u/s 115JB of the I.T. Act. During the course of assessment proceedings, the Assessing Officer noted that the assessee has declared revenue from sale of ITA No 1214 of 2019 Malaxmi Agri Ventures P Ltd Hyderabad Page 2 of 6 products and other income and claimed expenditure under various heads. He noted that the assessee has declared loss of Rs.76,20,399/- after reducing the other source income of Rs.13,34,730/-. According to the Assessing Officer, the assessee did not carry on any other activities except agricultural activity and the income from such activity is also exempt under section 10 of the I.T. Act. He, therefore, was of the opinion that the loss arising from such exempt source of income should not be considered either for set off nor for carry forward. Rejecting various explanations given by the assessee, the Assessing Officer brought to tax the amount of Rs.13,34,730/- as income from other sources and determined the net loss from agricultural activity at Rs.84,82,032/- and held that the same is not to be carried forward. 3. Before the learned CIT (A), the assessee made elaborate submissions. However, the learned CIT (A) dismissed the appeal filed by the assessee by observing as under: “6. I have carefully considered the assessment order and AR’s submissions in this regard. In this connection, the appellant submissions are not accepted due to the detailed reasons mentioned in the assessment order by the Assessing Officer. Therefore, I am in agreement with the Assessing Officer, hence, the addition of Rs.13,34,730/- towards income from other sources is hereby confirmed. As a result, the grounds raised in this regard are dismissed”. 4. Aggrieved with such order of the learned CIT (A), the assessee is in appeal before the Tribunal by raising the following grounds of appeal: “1. The order of the learned Authorities below in so far as it is against the Appellant is opposed to law, equity, weight of evidence, probabilities and the facts and circumstances in the Appellant's case. ITA No 1214 of 2019 Malaxmi Agri Ventures P Ltd Hyderabad Page 3 of 6 2. The Appellant denies himself liable to the assessed on a total income of Rs. 13,34,730/-, as against the loss returned of Rs. 76,90,846/-, under the facts and circumstances of the case. 3. Whether the learned Authorities below are justified in rejecting the claim of the Appellant that the Appellant is carrying on business operations, under the facts and circumstances of the case. 4. Whether the learned Authorities below are justified in not considering the fact that the Appellant falls in the definition of section 2(13) of the Act, under the facts and circumstances of the case. 5. Whether the learned Authorities below are justified in expenses treating business incurred by the Appellant of Rs. 97,46,315/, as expenses and agricultural reducing it from the circumstances agricultural income, under the facts and of the case. 6. The learned Authorities below ought to have considered agricultural only the expenses of Rs. 1,25,86,690/- and reduce it agricultural against the income of Rs. 1,38,50,973/-, under the facts and of circumstances the case. 7. Whether the learned Authorities below are correct in not fact that the appreciating the Appellant has incurred loss from business of Rs. 89,55,129/, under the facts and circumstances of the case. 8. Whether the learned Authorities below are correct in Appellant has not presuming that the carried any business operations, and expenditure of Rs. disallowing the 97,46,315/-, claimed by the Appellant towards business, under the facts and circumstances of the case. 9. Whether the learned Authorities below are correct in not allowing the income from other sources of Rs. 13,34,730/-, set off under section 71 of the Act, against the loss under the head business of Rs. 89,55,129/-, under the facts and circumstances of the case. 10. Whether the learned Authorities below are correct in disallowing the carry forward of the unabsorbed business loss of Rs. 69,23,479/- and depreciation loss of Rs. 6,96,920/-, under the facts and circumstances of the case. 11. Without prejudice, whether the stating that the learned Authorities below are correct in Appellant has carried only agricultural business, even when operations and not the Appellant has demonstrated that the agricultural activity was carried out on leased lands by employing advance machinery, technology and under the facts and circumstances of the case. 12. The Appellant denies himself liable to be charges to interest under section 234B and 234D of the Income Tax Act, 1961, under the facts and circumstances of the case. ITA No 1214 of 2019 Malaxmi Agri Ventures P Ltd Hyderabad Page 4 of 6 13. The Appellant craves leave to add, alter, modify, delete or substitute any of the grounds urged above. 14. In the view of the above and other grounds that may be urged at the time of the hearing of the appeal, the Appellant prays that the appeal may be allowed in the interest of justice and equity”. 5. The learned Counsel for the assessee strongly challenged the order of the learned CIT (A). He submitted that despite voluminous written submissions filed by the assessee, the learned CIT (A) without considering the same dismissed the appeal filed by the assessee in a very cryptic order. He accordingly submitted that since the learned CIT (A) has not passed a speaking order, therefore, he has no objection, if the matter is restored to the file of the CIT (A). 6. The learned DR, on the other hand, heavily relied on the order of the learned CIT (A). 7. We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned CIT (A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us by the learned Counsel for the assessee. We find the AO in the instant case made addition of Rs.13,34,730/- treating the same as “income from other sources” on the ground that the assessee had declared loss of Rs.76,24,300/- after reducing the other sources income of Rs.13,34,730/- and the assessee did not carry on any other activity other than agricultural activity, the income of which is exempt from tax. Therefore, the assessee cannot claim the reduction of other sources income of Rs.13,34,730/- from such exempt activity. We find the learned CIT (A) dismissed the appeal filed by the assessee, the reasons of which have already been ITA No 1214 of 2019 Malaxmi Agri Ventures P Ltd Hyderabad Page 5 of 6 reproduced in the preceding paragraph. A perusal of the order of the learned CIT (A) shows the assessee has made elaborate submissions which has been reproduced by him on the body of the impugned order but the decision of the learned CIT (A) is a very cryptic one and he has simply dismissed the appeal filed by the assessee stating that the submissions are not accepted due to the reasons mentioned in the assessment order by the Assessing Officer. Since the order of the learned CIT (A) is a very cryptic one and does not address the various submissions made by the assessee to counter the allegation of the Assessing Officer therefore, considering the totality of the fact of the case and in the interest of justice, we deem it fit and proper to restore the issue to the file of the learned CIT (A) with a direction to adjudicate the issue by passing a speaking order. The learned CIT (A) shall decide the issue as per fact and law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes. 8. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 21 st July, 2022. Sd/- Sd/- (LALIET KUMAR) JUDICIAL MEMBER (R.K. PANDA) ACCOUNTANT MEMBER Hyderabad, dated 21 st July, 2022. Vinodan/sps ITA No 1214 of 2019 Malaxmi Agri Ventures P Ltd Hyderabad Page 6 of 6 Copy to: S.No Addresses 1 Malaxmi Agri Ventures P Ltd, Survey No.157, Malaxmi Courtyard, Khajaguda Village, Golconda Post, Hyderabad 500008 2 Income Tax Officer Ward 16(4) 1 st Floor, B Block, IT Towers, Masab Tank, Hyderabad 3 CIT (A)-4 ,Hyderabad 4 Pr. CIT-4, Hyderabad 5 DR, ITAT Hyderabad Benches 6 Guard File By Order