Ahmed Zaki, Hyderabad, Hyderabad V. ACIT,Circle-4(1) Hyderabad, Hyderabad

ITA 1298/HYD/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5955 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 07-10-2016
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Assessee Lawyers: A V RAGHURAM
• Keywords: Reopening of assessment; Application of stay
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. ASST. YEAR APPELLANT RESPONDENT 1298/HYD/16 2008-09 SRI AHMED ZAKI, HYDERABAD [PAN: AAAPZ3409J] ASST. COMMISSIONER OF INCOME TAX, CIRCLE-4(1), HYDERABAD 1299/HYD/16 2009-10 STAY APPLICATION NOS. 62 & 63/HYD/2016 (ARISING OUT OF ITA NOS. 1298 & 1299/HYD/2016) ASSESSMENT YEARS : 2008-09 & 2009-10 SRI AHMED ZAKI, HYDERABAD [PAN: AAAPZ3409J] VS. ASST. COMMISSIONER OF INCOME TAX, CIRCLE-4(1), HYDERABAD (APPLICANT) (RESPONDENT) FOR ASSESSEE : SHRI A.V. RAGHU RAM, A R FOR REVENUE : SMT SUMAN MALIK, DR DATE OF HEARING : 15 - 11 - 201 6 DATE OF PRONOUNCEMENT : 21 - 1 2 - 201 6 O R D E R PER B. RAMAKOTAIAH, A.M. : THESE TWO APPEALS ARE BY ASSESSEE AGAINST THE ORDER (S) OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1, HYDERABAD, DATED 27-07-2016 FOR THE AYS. 2008-09 & 2009-10. ASSESSE E IS AGGRIEVED ON REOPENING OF ASSESSMENT U/S. 147 OF THE INCOME TAX ACT [ACT] AND ALSO DISALLOWANCE OF TDS IN BOTH THE YEA RS. 2. BRIEFLY STATED, ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM PROVIDING CONSULTANCY IN STRUCTURAL ENGINEERING WORKS BEING ITA NOS. 1298 & 1299/HYD/16 S.A.NOS. 62 & 63/HYD/16 :- 2 -: PROPRIETOR OF M/S ZAKI ASSOCIATES. FOR AY. 2008-09, ASSESSEE HAS FILED RETURN OF INCOME ADMITTING RS. 1,42,98,000/-. AS SESSING OFFICER (AO) NOTICED THAT THERE IS VARIATION IN TDS CLAI M WHEN COMPARED TO 26AS DETAILS AND CAME TO THE CONCLUSION TH AT INCOME CHARGEABLE TO TAX HAS ESCAPEMENT ASSESSMENT FOR THIS A SSESSMENT YEAR. PROCEEDINGS U/S 147 WERE INITIATED AND A NOTIC E U/S 148 WAS ISSUED. SIMILARLY, HE ALSO ISSUED NOTICE U/S 148 FO R AY. 2009-10, WHEREIN ASSESSEE HAS ADMITTED INCOME OF RS. 1,60,75,1 07/- ORIGINALLY. 2.1. IN AY. 2008-09, AFTER RECONCILIATION OF THE AMO UNTS ASSESSEE HAS ADMITTED A SMALL DIFFERENCE OF RS. 43,127/-. AF TER RECONCILIATION OF THE PROFESSIONAL RECEIPTS RECEIVED , THE DIFFERENCE WAS WORKED OUT AS UNDER: AMOUNT RS. PROFESSIONAL CHARGES RECEIV ED EXCLUDING SERVICE TAX & EDUCATIONAL CESS 3,18,53,907 LESS: ADVANCE RECEIPTS OF EARLIER YEARS TRANSFERRED TO PROFESSIONAL RECEIPTS 38,32,508 2,80,21,399 ADD: ADVANCE RECEIPTS DURING THE CURRENT YEAR 1,07,79,000 SERVICE TAX RECEIPTS 46,56,046 EDUC ATION CESS RECEIPTS 46,029 TOTAL RECEIPTS 4,35,02,474 LESS: GROSS RECEIPTS AS SHOWN ABOVE 4,34, 59,346 DIFFERENCE 43,127 2.2. THE AO HAS ADDED AN AMOUNT OF RS. 43,127/- TO THE INCOME RETURNED, ON WHICH THERE IS NO DISPUTE. HOWEVER, THE AO EXAMINED THE CREDITS FOR TDS AND NOTED THAT ASSESSEE HAS RECEIVED CERTAIN ADVANCES WHICH WERE NOT OFFERED TO TAX ON WHICH TDS WA S MADE AND ASSESSEE CLAIMED TDS. ACCORDINGLY, INVOKING TH E RULE 37BA AND PROVISIONS OF THE ACT, HE DENIED THE CREDIT TO AN EX TENT OF RS. 9,34,488/- AS DETAILED IN PAGE 3 OF THE ASSESSMENT ORD ER. ITA NOS. 1298 & 1299/HYD/16 S.A.NOS. 62 & 63/HYD/16 :- 3 -: HOWEVER, THIS AMOUNT WAS NOT GIVEN CREDIT IN OTHER ASS ESSMENT YEARS IN WHICH THE CORRESPONDING INCOMES WERE OFFERE D. AO RAISED DEMAND IN THIS YEAR INCLUDING INTEREST U/S. 234B. ON AN APPEAL, THE LD.CIT(A) CONFIRMED THE ACTION OF REOPENING U/S. 1 47 AS WELL AS DENIAL OF THE TDS IN AY. 2008-09. 3. COMING TO AY. 2009-10, THE AO EVEN THOUGH REOPENE D THE ASSESSMENT FOR EXAMINATION OF GROSS-RECEIPTS FROM FORM 26AS AND ADMITTED RECEIPTS, HE HAS GIVEN FINDING THAT ON VERIFICATION OF GROSS RECEIPTS WITH REFERENCE TO THE BOOKS OF ACCOUNT MAI NTAINED AND FORM 26AS DETAILS, THE ASSESSEE STATEMENT IS FOUND TO BE CORRECT. THUS, THE BASIS FOR REOPENING HAS BEEN EXAMINED AND SATISFI ED. HOWEVER, IN THIS YEAR ALSO, THE AO EXAMINED THE CREDIT FOR TD S AND DENIED THE CREDIT OF AN AMOUNT OF RS. 3,69,682/- ON THE SAME REASON THAT THE AMOUNT WAS ACCOUNTED FOR IN A LATER YEAR. HERE ALS O, THE CREDIT FOR THE TDS WAS NOT GIVEN IN THE RELEVANT ASSESSMENT YEA R. LD.CIT(A) CONFIRMED THE ACTION OF THE AO EVEN THOUGH A SSESSEE CONTENDED THAT THE BASIS FOR REOPENING HAS BEEN EXAMINE D AND NO ADDITION HAS BEEN MADE, THEREFORE, NO OTHER ADDITION O R DISALLOWANCE CAN BE MADE. ASSESSEE IS AGGRIEVED IN BOTH THE YEARS. 4. EVEN THOUGH LD. COUNSEL RAISED THE ISSUE OF REOPEN ING OF ASSESSMENT IN AY. 2008-09, CONSIDERING THAT ASSESSEE H AS ADMITTED A DIFFERENCE IN THE PROFESSIONAL RECEIPTS, WE ARE OF THE OPINION THAT THE REOPENING HAS BEEN MADE PROPERLY. A CCORDINGLY, THE ISSUE OF REOPENING IS HELD AGAINST ASSESSEE. 5. COMING TO THE ISSUE OF RECONCILIATION OF TDS IN AY 2008-09 , IT IS ADMITTED THAT ASSESSEE HAS NOT OFFERED THE RECEIPTS IN THIS YEAR BUT THE CORRESPONDING INCOME WAS OFFERED IN LATER YEA R. IN THE ITA NOS. 1298 & 1299/HYD/16 S.A.NOS. 62 & 63/HYD/16 :- 4 -: COURSE OF APPEAL, THE FOLLOWING STATEMENT HAS BEEN FILE D RECONCILING THE AMOUNTS: S. NO NAME OF THE PARTY NET AMOUNT IN RS. GROSS AMOUNT IN RS. TDS IN RS. RECEIPTS ADMITTED IN THE AY. 1. M/S. PHARMA INFRA HOUSING (APARNA INFRA HOUSING) 10,25,000 11,51,690 1,30,486 2010-11 2. M/S. MAK PROJECTS 4,85,000 5,44,946 54,951 2009-10 3. M/S. MAK PROJECTS 4,85,000 5,44,946 54,951 2009-10 4. M/S. MAK PROJECTS 4,85,000 5,44,946 54,951 2009-10 5. GENESIS PLANNERS PVT. LTD., 10,00,000 11,23,000 63,034 2010-11 6. GENESIS PLANNERS PVT. LTD., 20,00,000 22,47,200 1,20,008 2010-11 7. ASHOKA DEVELOPER & BUILDERS 10,00,000 11,23,000 1,15,731 2010-11 8. KALA JYOTHI PROCESS (P) LTD., 4,54,883 22,47,200 46,853 2009-10 9. LODHA HEALTHY CONSTRUCTIONS & DEVELOPMENT (P) LTD., 4,45,000 5,11,106 56,650 2009-10 10 LODHA HEALTHY CONSTRUCTIONS & DEVELOPMENT (P) LTD., 2,05,002 2,30,340 26,098 2009-10 11 RAGA 3,06,600 3,44,495 53,224 2009-10 12 RAGA 4,59,900 5,16,744 79,837 2009-10 13 SRINIVASA BUILDERS - VILLAS 3,63,119 4,08,000 46,206 2009-10 14 SRINIVASA BUILDERS LAYOUT 2,47,500 2,78,091 31,508 2009-10 5.1. IT WAS THE REQUEST OF THE LD. COUNSEL THAT THE CORRES PONDING TDS MAY BE GIVEN CREDIT IN AYS. 2009-10 AND 2010-11. 6. TO THE EXTENT OF DISALLOWANCE OF CREDIT, WE HAVE TO UPHOLD THE ACTION OF AO AS THE CORRESPONDING INCOME WAS NOT OFF ERED IN THIS YEAR. HOWEVER, THE CREDIT FOR TDS HAS TO BE GIVEN IN TH E YEAR INCOME WAS OFFERED. LD. DR ALSO FAIRLY ADMITTED THAT CR EDIT HAS TO BE GIVEN IN THE RESPECTIVE ASSESSMENT YEARS. ACCORDIN GLY, AO IS DIRECTED TO ALLOW THE CREDIT OF THE TDS AMOUNT DISALLOW ED IN THIS YEAR IN AYS. 2009-10 AND 2010-11, AS PER THE DETAILS MENTIONED IN ITA NOS. 1298 & 1299/HYD/16 S.A.NOS. 62 & 63/HYD/16 :- 5 -: THE ABOVE TABLE AFTER DUE VERIFICATION. WITH THESE DIR ECTIONS, ASSESSEES GROUNDS ON THIS ARE CONSIDERED PARTLY ALL OWED. 7. IN THE RESULT, APPEAL IN AY. 2008-09 IS PARTLY ALLO WED. 8. COMING TO AY. 2009-10, AS SEEN FROM THE ORDER OF TH E AO, THE REASON FOR REOPENING IS RECONCILIATION OF THE RECEIP TS WHICH HAS BEEN ACCEPTED. THEREFORE, AO SHOULD HAVE DROPPED THE PROCEEDINGS U/S. 148. FOR DENYING THE CREDIT THERE IS NO NEED TO R EOPEN THE ASSESSMENT. SINCE ASSESSEE HAS ALREADY OFFERED ALL THE AMOUNTS, THERE IS NO NEED FOR MAKING ANY DISALLOWANCE OR ADDI TION. WHEN THERE IS NO ADDITION ON THE ISSUE ON WHICH ASSESSMENT WAS REOPENED, THE REOPENING OF ASSESSMENT ITSELF BECOMES B AD IN LAW. FOLLOWING THE PRINCIPLES LAID DOWN BY THE HON'BLE BOM BAY HIGH COURT IN THE CASE OF CIT VS JET AIRWAYS (I) LTD (331 IT R 236) AND THE PRINCIPLES LAID DOWN BY THE JURISDICTIONAL HIGH C OURT IN THE CASE OF SPECTRA SHARES AND SCRIPS PVT. LTD., VS. CIT [354 ITR 35] (AP), WE ARE OF THE OPINION THAT THERE IS NO BASIS FOR COMPLETION OF THE RE-ASSESSMENT, WHEN THERE IS NO ADDITION ON THE I SSUE ON WHICH ASSESSMENT WAS REOPENED. ACCORDINGLY, THE ORDE R PASSED BY THE AO BECOMES AB INITIO VOID. THE GROUNDS RAISED BY ASSESSEE ON THE ISSUE OF REOPENING ARE UPHELD AND ACCORDINGLY, O RDERS OF AO AND CIT(A) ARE SET ASIDE. THE APPEAL IN AY. 2009-1 0 IS ACCORDINGLY ALLOWED. 9. TO SUM-UP APPEAL IN AY. 2008-09 IS PARTLY ALLOWED AND APPEAL IN AY. 2009-10 IS ALLOWED. ITA NOS. 1298 & 1299/HYD/16 S.A.NOS. 62 & 63/HYD/16 :- 6 -: 10. SINCE WE HAVE CONSIDERED THE APPEALS ON MERITS, TH E STAY APPLICATIONS FILED BECOME ACADEMIC IN NATURE, ACCORDI NGLY THEY ARE TREATED AS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST DECEMBER, 2016 SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMB ER HYDERABAD, DATED 21 ST DECEMBER, 2016 TNMM COPY TO : 1.SRI AHMED ZAKI, C/O. K. VASANT KUMAR, A.V. RAGHU RAM, P. VINOD & M. NEELIMA DEVI, ADVOCATES, 610, BABUKHA N ESTATE, BASHEER BAGH, HYDERABAD. 2. ASST. COMMISSIONER OF INCOME TAX, CIRCLE-4(1), H YDERABAD. 3. THE COMMISSIONER OF INCOME TAX (APPEALS)-I, HYDE RABAD. 4. THE PR. COMMISSIONER OF INCOME TAX-I, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.