Joint Commissioner of Income Tax (OSD), Hyderabad V. Magnaquest Technologies Limited, Hyderabad

ITA 128/Hyd/2021

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 7094 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-A
• Assessment Year: 2017-2018
• Appeal Filed On: 21-02-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “A” : HYDERABAD BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER I.T.A. No. 128/HYD/2021 Assessment Year: 2017-18 Joint Commissioner of Income Tax (OSD), Circle-5(1), HYDERABAD Vs Magnaquest Technologies Limited, HYDERABAD [PAN: AACCM3117F] (Appellant) (Respondent) For Revenue : Shri Rajendra Kumar, CIT-DR For Assessee : Shri K.C.Devdas, AR Date of Hearing : 07-03-2022 Date of Pronouncement : 10-03-2022 O R D E R PER S.S.GODARA, J.M. : This Revenue’s appeal for AY.2017-18 arises from the CIT(A)-4, Hyderabad’s order dated 17-07-2020 passed in case No.10588 / 19-20 / DCIT,Cir-16(2) / CIT(A)-4 / 20-21, involving proceedings u/s.143(3) of the Income Tax Act, 1961 [in short, ‘the Act’]. Heard both the parties. Case file perused. 2. It transpires at the outset that this Revenue’s instant appeal suffers from 122 days’ delay. Hon'ble apex court’s recent directions “IN RE: COGNIZANCE FOR EXTENSION OF LIMITATION”, Miscellaneous Application No. 21 of 2022 in Suo ITA No. 128/Hyd/2021 :- 2 -: Motu Writ Petition(C) No.3 of 2020 has directed exclusion of Covid-19 pandemic outbreak time period from 15-03-2020 to 28-02-2022 from all limitations. The impugned delay stands condoned accordingly. 3. The Revenue’s sole substantive ground raised before us in the instant appeal challenges correctness of the CIT(A)’s action deleting Section 36(1)(vii) r.w.s.36(2) bad debts disallowance of Rs.7,51,91,659/- thereby admitting additional evidence in violation of rule 46A of the Income Tax Rules during the course of lower appellate proceedings. Both the learned representatives invited our attention to the impugned lower appellate discussion as follows: ITA No. 128/Hyd/2021 :- 3 -: ITA No. 128/Hyd/2021 :- 4 -: ITA No. 128/Hyd/2021 :- 5 -: ITA No. 128/Hyd/2021 :- 6 -: ITA No. 128/Hyd/2021 :- 7 -: 4. It is sufficiently clear from a perusal of the case file that the CIT(A) had very well sought remand report from the Assessing Officer’s end regarding the assessee’s additional evidence in issue. The Revenue’s instant sole substantive ground fails on this count therefore as the CIT(A) has not violated principles of natural justice in this regard. Coupled with this, it has come on record that the assessee had very well written-off the impugned sums involving 27 parties having outstanding business receivables which had been duly recognised as income in earlier years. We thus hold that the CIT(A) has rightly followed hon'ble apex court’s landmark decision in TRF (supra) that the impugned bad debts disallowance had been wrongly made during the course of assessment herein framed on 04-12-2019. The Revenue’s substantive ground(s) fail accordingly. 5. This Revenue’s appeal is dismissed in above terms. Order pronounced in the open court on 10 th March, 2022 Sd/- Sd/- (LAXMI PRASAD SAHU) (S.S.GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Hyderabad, Dated: 10-03-2022 TNMM ITA No. 128/Hyd/2021 :- 8 -: Copy to : 1.Joint Commissioner of Income Tax(OSD), Circle-5(1), Hyderabad. 2.Magnaquest Technologies Limited, H.No.8-2-283/B/3, Plot No.254, Avenue-7, Road No.3, Banjara Hills, Hyderabad. 3.CIT(Appeals)-4, Hyderabad. 4.Pr.CIT-4, Hyderabad. 5.D.R. ITAT, Hyderabad. 6.Guard File.