Padmasri Townships Pvt Ltd., Hyderabad, Hyderabad V. ITO, Ward-16(2), Hyderabad, Hyderabad

ITA 1226/HYD/2015

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 0861 (ITAT-HYDERABAD)
• Duration Of Justice: 5 year(s) 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 01-02-2021
• Assessment Year: 2009-2010
• Appeal Filed On: 20-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SIBENDU MOHARANA
• Assessee Lawyers: P MURALI MOHANA RAO
• Keywords: Rejection of books of accounts
• Section: 40A(3); 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NO. A.Y. APPELLANT RESPONDENT 1226/HYD/15 2009-10 M/S.PADMASRI TOWNSHIPS PVT. LTD., HYDERABAD [PAN: AADCP9596L] INCOME TAX OFFICER, WARD-16(2), HYDERABAD 370/HYD/17 FOR ASSESSEE : SHRI P.MURALI MOHANA RAO, AR FOR REVENUE : SHRI SIBENDU MOHARANA, DR DATE OF HEARING : 01-02-2021 DATE OF PRONOUNCEMENT : 24-02-2021 O R D E R PER BENCH : THESE TWO ASSESSEES APPEALS FOR AY.2009-10 ARISE F ROM THE CIT-IV & CIT(A)-4, HYDERABADS ORDERS DATED 10-03 -2014 & 05-10-2016 IN PROCEEDINGS U/S. 263 & 143(3) R.W.S.2 63 OF THE INCOME TAX ACT, 1961 [IN SHORT, THE ACT]; RESPECTIVELY . HEARD BOTH THE PARTIES. CASE FILES PERUSED. 2. LEARNED CIT-DR PIN-POINTED AT THE OUTSET THAT THE ASSESSEES FORMER APPEAL ITA NO.1226/HYD/2015 CHALL ENGING CORRECTNESS OF THE CITS REVISION ORDER U/S.263 TERMIN ATING THE REGULAR ASSESSMENT DT.30-12-2011 AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, SUFFERS FRO M 591 DAYS DELAY IN FILING. 3. MR.MOHARANA NEXT SUBMITTED THAT ASSESSEES CONDONATION PETITION/AFFIDAVIT DT.19-10-2015 CONTAINS A SINGLE PARA OF EXPLANATION THAT THE RECORDS HAD BEEN MIS-PLACE D BY ITA NOS. 1226/HYD/2015 & 370/HYD/2017 :- 2 -: THE CONCERNED STAFF ONLY WITHOUT ANY MATERIAL PARTICULAR S IN SUPPORT THEREOF. 4. LEARNED AUTHORISED REPRESENTATIVE VEHEMENTLY OPPOSE D THE REVENUES FOREGOING CONTENTIONS. HE TOOK US TO THE ASSESSEES CONDONATION PETITION DT.12-08-2016 STATING THE REASONS OF THE IMPUGNED DELAY INTER ALIA ON ACCOUNT OF ABSENCE OF ITS MANAGING DIRECTOR, MISPLACEMENT OF THE CASE FILE AS WELL AS OTHER CORRESPONDING FACTORS. THE SAME SUFFICIENTLY SUGGEST THAT THE IMPUGNED DELAY IS NEITHER INTENTIONAL NOR DELIBE RATE ON ACCOUNT OF THE REASONS BEYOND ASSESSEES CONTROL. H ONBLE APEX COURTS LANDMARK DECISION COLLECTOR, LAND ACQUIS ITION VS. MST.KATIJI & ORS [167 ITR 471] (SC) HOLDS THAT THE CAUS E OF SUBSTANTIAL JUSTICE MUST PREVAIL OVER ALL TECHNICAL ASP ECTS AND MORE SO, WHEN AN ASSESSEE HAS PROVED SATISFACTORILY THAT IT WAS PREVENTED FROM FILING THE APPEAL WITHIN THE PRES CRIBED TIME LIMIT DUE TO UNAVOIDABLE CIRCUMSTANCES. WE THUS ACCEPT TH E ASSESSEES FOREGOING CONDONATION PETITION ITS FORMER A PPEAL ITA NO.1226/HYD/2015 IS TAKEN UP FOR HEARING. 5. WE NEXT ADVERT TO THE CITS REVISION ORDER UNDER CHALLENGE. HE HAS REPRODUCED HIS SHOW CAUSE NOTICE ISSUED TO THE ASSESSEE THAT THE ASSESSEE HAD MADE CASH PAYMENTS TO LAND OWNERS OF RS.1,22,97,207/- WHICH ATTRACTED SECTI ON 40A(3) DISALLOWANCE AND THE ASSESSING OFFICER HAD NO T VERIFIED THE SAID PAYMENTS. WE FIND THAT THE CIT HAS ERRED IN INV OKING THE IMPUGNED REVISION MECHANISM. A PERUSAL OF THE ASSESSMENT ORDER DT.30-12-2011 MAKES IT CLEAR THAT THE ASSESSING OFFICER HAD APPLIED 8% INCOME ELEMENT ON ASSESSEES RECEIPTS THEREBY REJECTING ITS BOOKS OF ACC OUNTS. ITA NOS. 1226/HYD/2015 & 370/HYD/2017 :- 3 -: HONBLE JURISDICTIONAL HIGH COURTS MUCH DELIBERATED DECISION IN INDWELL CONSTRUCTIONS VS. CIT [232 ITR 776] (AP) H OLDS THAT THE ABOVE STATED STATUTORY PROVISION DOES NOT COME INTO P LAY IN CASE OF REJECTION OF BOOKS OF ACCOUNTS FOLLOWED BY E STIMATION OF PROFITS. THAT BEING THE CASE, WE HOLD THAT THE ASSESSING OFFICERS ACTION IN NOT INVOKING THE IMPUGNED DISALLO WANCE U/S.40A(3) IS NEITHER ERRONEOUS NOR PREJUDICIAL TO TH E INTEREST OF THE REVENUE SINCE THE ASSESSEES PROFITS ALREADY STO OD ESTIMATED @8%. WE THUS REVERSE THE CITS REVISION DIR ECTIONS ON THIS COUNT ALONE. THE ASSESSEES FORMER APPEAL ITA NO.1226/HYD/2015 IS ALLOWED. 6. THE ASSESSEES LATTER APPEAL ITA NO.370/HYD/2017 IS IN SECTION 143(3) R.W.S.263 PROCEEDINGS AS A NECESSARY CONSEQUENCE TO THE CITS REVISION DIRECTIONS. THIS ASS ESSMENT ITSELF STANDS QUASHED, SINCE THE IMPUGNED ADDITION OF DISALLOWANCE OF RS.1,22,97,207/- ALONG WITH RS.1,46, 71,043/- ON LAND DEVELOPMENT, VEHICLE MAINTENANCE AND CAR HIR E CHARGES HAVE NO LEGS TO STAND IN VIEW OF OUR FINDINGS IN SECTION 263 APPEAL. ITA NO.370/HYD/2017 IS ALSO ACCEPTED. 7. THESE TWO ASSESSEES APPEALS ARE ALLOWED, IN ABO VE TERMS. A COPY OF THIS COMMON ORDER BE PLACED IN THE R ESPECTIVE CASE FILES. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH FEBRUARY, 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.G ODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD, DATED: 24-02-2021 TNMM ITA NOS. 1226/HYD/2015 & 370/HYD/2017 :- 4 -: COPY TO : 1.M/S.PADMASRI TOWNSHIPS PVT. LTD., C/O. P. MURALI & CO., CHARTERED ACCOUNTANTS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD. 2.THE INCOME TAX OFFICER, WARD-16(2), HYDERABAD. 3.CIT(APPEALS)-4, HYDERABAD. 4.PR.CIT-IV, HYDERABAD. 5.D.R. ITAT, HYDERABAD. 6.GUARD FILE.