Narne Estates Private Limited , Hyderabad V. Income Tax Officer, Ward-16(2), Hyderabad

ITA 1260/Hyd/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1588 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 21-12-2020
• Assessment Year: 2005-2006
• Appeal Filed On: 09-08-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: H SRINIVASULU
• Keywords: Bad and doubtful debts; Revised return; Capital Gains
• Section: 234B; 139(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER I.T.A. NO. 1260/HYD/2019 ASSESSMENT YEAR: 2005-06 NARNE ESTATES PRIVATE LIMITED, HYDERABAD [PAN: AAACN4669F] VS INCOME TAX OFFICER, WARD-16(2), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI H.SRINIVASULU, AR FOR REVENUE : SHRI SUNIL KUMAR PANDEY, DR DATE OF HEARING : 07-12-2020 DATE OF PRONOUNCEMENT : 09-12-2020 O R D E R PER A. MOHAN ALANKAMONY, A.M.: THIS IS ASSESSEES APPEAL FOR THE AY.2005-06, DIRECT ED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)4, HYDERABAD, IN APPEAL NO. 10910/16-17/I TO, WD./CIT(A)-4/HYD./2019-20, DATED 31-05-2019. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PR IVATE LIMITED COMPANY, ENGAGED IN REAL ESTATE BUSINESS, FIL ED ITS RETURN OF INCOME FOR THE AY.2005-06 ON 23-03-2006, DI SCLOSING TAXABLE INCOME AT RS.90,77,150/-, INCLUDING INCOME FR OM LONG TERM CAPITAL GAINS OF RS.59,51,747/-. THE ASSESSEE HAS FILED THIS APPEAL AGGRIEVED BY THE ORDER OF THE LD.CIT(A), W HICH WAS WITH RESPECT TO THE CONSEQUENTIAL ORDER PASSED BY THE L D.AO, ITA NO.1260/HYD/2019 :- 2 -: GIVING EFFECT TO THE DIRECTIONS OF THE TRIBUNAL ORDER ON THE EARLIER INSTANCE. 3. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLLOW ING GROUNDS: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME -TAX (APPEALS) IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER WHERE IN THE ASSESSING OFFICER ALLOWED RELIEF OF ONLY RS.3,93,800/- AND NO T THE AMOUNT AS CLAIMED BY THE APPELLANT. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION MADE OF RS.22,78,530/- BY N OT ALLOWING THE DEDUCTION OF THE AMOUNT WRITTEN OFF. 4. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING LEVY OF INTEREST U/S.234A, U/S.234B AND U/S.234C OF THE I.T.ACT. 5. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME O F HEARING. 4. GROUND NO.1 IS GENERAL IN NATURE AND ACCORDINGLY, DISPOSED-OF. 5. GROUND NO.2 IS REGARDING GRANTING OF FULL RELIEF CLAIMED WITH RESPECT TO ISSUE OF LONG-TERM CAPITAL GAIN. 5.1. AT THE OUTSET, WE FIND THAT THE LD. REVENUE AUTHORITIE S HAVE COMPUTED THE CAPITAL GAINS IN ACCORDANCE WITH THE BELATED RETURN FILED BY THE ASSESSEE. NOW, THE ASSESSE E CLAIMS THAT THERE IS OMISSION/WRONG STATEMENT IN THE RETURN FILED BY THE ASSESSEE, WHICH IS REQUIRED TO BE RECTIFIED AND AC CORDINGLY, ITA NO.1260/HYD/2019 :- 3 -: THE ASSESSMENT ORDER NEEDS TO BE MODIFIED. WE DO NOT F IND ANY MERIT IN THE CLAIM OF THE ASSESSEE. IT IS AN ADMITTED F ACT THAT THE ASSESSEE HAS FILED THE RETURN BELATEDLY U/S.139(4 ) OF THE ACT. FURTHER SECTION 139(5) OF THE ACT FOR THE RELEVANT ASSESSMENT YEAR STIPULATES AS UNDER: - IF ANY PERSON, HAVING FURNISHED A RETURN UNDER SUB -SECTION (1), OR IN PURSUANCE OF A NOTICE ISSUED UNDER SUB-SECTIO N (1) OF SECTION 142, DISCOVERS ANY OMISSION OR ANY WRONG ST ATEMENT THEREIN, HE MAY FURNISH A REVISED RETURN AT ANY TIM E BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASS ESSMENT YEAR OR BEFORE THE COMPLETION OF THE ASSESSMENT WHICHEVE R IS EARLIER. FROM THE ABOVE IT IS CLEAR THAT, ANY OMISSION OR WRONG STATEMENT FURNISHED BY THE ASSESSEE CANNOT BE ENTERTAINED AS THE RETURN IS FILED BEYOND THE DUE DATE OF FILING OF TH E RETURN U/S.139(1) OF THE ACT AND THE ASSESSEE IS BARED FROM FILING REVISED RETURN U/S 139(5) OF THE ACT. MOREOVER, THE A SSESSEE HAS NOT BROUGHT OUT BEFORE US THE PROPOSED CORRECTIONS TO BE CARRIED OUT IN THE ASSESSMENT ORDER OTHER THAN SIMPLY STATING THAT CERTAIN CORRECTIONS ARE TO BE GIVEN EFFECT. FURTHER IT APPEARS FROM THE ARGUMENTS ADVANCED BY THE LD.AR THAT THE RE ARE NO DRASTIC ADJUSTMENTS REQUIRED TO BE MADE IN THE O RDER OF THE LD.AO WHICH OTHERWISE WILL LEAD TO SUBSTANTIAL MISC ARRIAGE OF INJUSTICE TO THE ASSESSEE. THE LD.AR ALSO HAS CONCE DED THAT THE LD.AO HAD ASSESSED THE INCOME OF THE ASSESSEE IN ACCORDANCE WITH THE BELATED RETURN OF INCOME FILED BY THE ASSESSEE. IT IS ALSO PERTINENT TO MENTION THAT THIS IS THE SECOND ROUND OF LITIGATION BEFORE US AND THIS GROUND WAS NEVE R RAISED ON THE EARLIER OCCASIONS. IN THIS SITUATION WE DO NOT FIND ANY ITA NO.1260/HYD/2019 :- 4 -: MERITS IN THE ARGUMENTS ADVANCED BY THE LD.AR ON THE I SSUE. THEREFORE, THIS GROUND RAISED BY THE ASSESSEE IS DEVO ID OF MERITS AND ACCORDINGLY DISPOSED-OFF. 6. GROUND NO.3 RELATES TO DISALLOWANCE OF RS.22,78,5 30/- UNDER THE HEAD BAD DEBTS, BEING THE ADVANCES MADE BY THE ASSESSEE AS DETAILED HEREIN BELOW: I. RS.10,87,250/- PAID TO M/S.NARNE PUBLICATIONS PVT. LTD ., TOWARDS INTEREST FREE ADVANCES. II. RS.3,21,279/- PAID TO M/S.DANTESWARI MINERAL LTD., TOWARDS INTEREST FREE ADVANCES. III. RS.8,22,000/- PAID AS LOANS TO VARIOUS PARTIES/MEMBER S. IV. RS.48,000/- INVESTED IN M/S.RIVERDALE FOODS LTD. 6.1. THE ASSESSEE HAS CLAIMED THAT, THE ABOVE IRRECOV ERABLE ADVANCES WERE RELATED TO THE BUSINESS OF THE ASSESSEE A ND THEREFORE IT SHOULD BE ALLOWED TO BE TREATED AS BAD DE BTS. THE LD.AO HAD DENIED THE DEDUCTION AS BAD DEBTS BECAUSE THE ASSESSEE HAS NOT ESTABLISHED THAT THE AFORESAID ADVANC ES ARE RELATED TO THE BUSINESS OF ASSESSEE WITH COGENT EVIDENCE . LD.CIT(A) ALSO CONFIRMED THE ORDER OF THE LD.AO BECAU SE EVEN BEFORE HIM THE ASSESSEE HAS NOT PRODUCED PROPER EVIDE NCE TO ESTABLISH ITS CLAIM. 6.2. BEFORE US, THE LD.AR VEHEMENTLY ARGUED THAT ALL THE SE ADVANCES ARE WITH RESPECT TO BUSINESS OF THE ASSESSEE AND THEREFORE IT MUST BE ALLOWED AS DEDUCTION UNDER THE HEAD BAD ITA NO.1260/HYD/2019 :- 5 -: DEBTS BECAUSE THE AFORESAID RECEIVABLES ARE NOT RECO VERABLE. NEVERTHELESS, EVEN BEFORE US AT THIS STAGE THE LD.AR D ID NOT PRODUCE ANY COHERENT EVIDENCE TO SUBSTANTIATE THAT THE AFORESTATED ADVANCES MADE BY THE ASSESSEE IS RELATED TO THE BUSINESS OF THE ASSESSEE. HOWEVER KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, AND THE PRAYER OF THE L D.AR, IN THE INTEREST OF JUSTICE, WE ARE OF THE CONSIDERED VIEW THAT ONE MORE OPPORTUNITY IS REQUIRED TO BE PROVIDED TO THE ASSE SSEE TO ESTABLISH ITS CLAIM BEFORE THE LD. REVENUE AUTHORITIES. THEREFORE, WE HEREBY REMIT THIS ISSUE BACK TO THE FILE OF LD.AO FOR DENOVO CONSIDERATION. 7. GROUND NO.4 IS RELATED TO LEVY OF INTEREST U/S.234A, 234B AND 234C OF THE ACT. 7.1. AT THE OUTSET, WE FIND THAT THE INTEREST LEVIABLE U/S. 234A, 234B AND 234C OF THE ACT ARE CONSEQUENTIAL IN N ATURE AND THEREFORE, THE ORDERS OF THE LD. REVENUE AUTHORITIE S DO NOT CALL FOR ANY INTERFERENCE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED A S PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH DECEMBER, 2020 SD/- SD/- ( P. MADHAVI DEVI ) ( A. MOHAN ALANKA MONY ) JUDICIAL MEMBER ACCOUNTANT MEMBE R HYDERABAD, DATED: 09-12-2020 TNMM ITA NO.1260/HYD/2019 :- 6 -: COPY TO : 1.M/S.NARNE ESTATES PRIVATE LIMITED, 1, GUNROCK ENC LAVE, KARKHANA, SECUNDERABAD. 2.THE INCOME TAX OFFICER, WARD-16(2), HYDERABAD. 3.CIT(APPEALS)-4, HYDERABAD. 4.THE PR.CIT-4, HYDERABAD. 5.D.R. ITAT, HYDERABAD. 6.GUARD FILE.