Amedha Info System Private Limited, Hyderabad V. Dy. Commissioner of Income Tax , Circle-1(1), Hyderabad

ITA 1343/Hyd/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 0144 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2012-2013
• Appeal Filed On: 25-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Bogus purchase; Additional evidence
• Section: 143(3); 115JB; 201; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD. BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER (THROUGH VIRTUAL HEARING) ITA NO. 1 343 /HYD/2018 (ASSESSMENT YEAR : 201 2 - 13 ) M/S. AMEDA INFO SYSTEM PVT. LTD., AYYAPPA SOCIETY, PLOT NO.1182, MADHAPUR, HYDERABAD . PAN AAICA 1799D VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE 1(1), HYDERABAD. APPELLANT RESPONDENT APPELLANT BY : SHRI P. MURALI MOHAN RAO . RESPONDENT BY : SHRI SUNIL KUMAR PANDEY (D.R) DATE OF HEARING : 09.03 .2021. DATE OF PRONOUNCEMENT : 15 .03. 2021. O R D E R PER S MT. P. MADHAVI DEVI , J.M. : THIS IS ASSESSEES APPEAL FOR THE ASST. YEAR 201 2 - 13 ARIS ING FROM THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 1 , HYDERABAD DT. 26.02.2018 . 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF SOFTWARE DEVELOPMENT AND FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2012 - 13 ON 25.03.2014 DECLARING TOTAL INCOME AT ( - ) RS.21,63,210 2 ITA NO. 1 343 /HYD/2018 UNDER THE NORMAL PROVISIONS AND ( - ) RS.1,33,08,580 UNDER THE PROVISIONS OF SECTION 115JB OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S. 143(3) OF THE ACT, THE ASSESSING OFFICER NOTICED THAT THE ASS ESSEE HAS REPAID LOAN RECEIVED FROM UCO BANK FOR RS.2,92,30,837. THE A.O. HAS ASKED THE ASSESSEE TO EXPLAIN THE SOURCES FOR THE LOAN REPAYMENT. THE ASSESSEE REPLIED THAT THE REPAYMENT OF LOAN HAS BEEN MADE OUT OF THE SALE PROCEEDS RECEIVED BY THE CO MPANY. THE A.O. FOUND THAT THE BANK ACCOUNT DID NOT REFLECT THESE RECEIPTS AND THE PART OF THE RECEIPTS WHICH WAS CLAIMED TO HAVE BEEN UTILIZED FOR LOAN , HAS NOT BEEN UTILIZED . THEREFORE, HE HELD THAT THE GENUINENESS OF THE LOAN HAS NOT BEEN PROVED BY THE ASSESSEE . THUS HE TREATED THE SU M OF RS.2,92,30,837 AS UNEXPLAINED INCOME OF THE ASSESSEE AND BROUGHT IT TO TAX . 3. FURTHER , ON VERIFICATION OF THE FINANCIAL STATEMENTS SUBMITTED BY THE ASSESSEE, THE A SSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS DEBITED AN AMOUNT OF RS.34,17,43,209 UNDER THE HEAD SOFTWARE PURCHASES BUT DID NOT FURNISH RELEVANT DOCUMENTARY EVIDENCE SUCH AS BANK ACCOUNT STATEMENT, BILLS/VOUCHERS FOR PURCHASES PARTY - WISE. THE ASSESSI NG OFFICER , HOLDING THAT THE GENUINENESS OF THE TRANSACTION COULD NOT BE PROVED , DISALLOWED 25% OF RS.34,17,43,209 AS BOGUS/INFLATED PURCHASES AND ADDED IT TO THE TOTAL INCOME. AGGRIEVED , THE ASSESSEE APPEALED BEFORE THE CIT(A) , WHO GRANTED PARTIAL RELIE F BY DIRECTING THE ASSESSING 3 ITA NO. 1 343 /HYD/2018 OFFICER TO CONSIDER THE LOAN OF RS.34,17,42,909 WHILE COMPUTING THE TOTAL INCOME AND ALSO TO VERIFY THE ASSESSEE'S CLAIM AND ALLOW THE CARRY FORWARD LOSS WITHIN THE PURVIEW OF THE INCOME TAX ACT. AGAINST THIS ORDER OF CI T(A) , THE ASSESSEE IS IN SECOND APPEAL BEFORE US BY RAISING THE FOLLOWING GROUNDS OF APPEAL : 1. THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IS ERRONEOUS BOTH ON FACTS AND LAW. 2 THE LD. CLT (A) ERRED IN UPHOLDING THE DIS ALLOWANCE OF I 2,77,19,645 THE ALLEGED BOGUS PURCHASES AMOUNTING TO RS. 8,54,35,802/ - ,ON THE ESTIMATE BASIS WITHOUT CONSIDERING THE FACTS OF THE CASE AND THE SUBMISSION MADE BY THE ASSESSEE. 3. THE LD. CIT (A) OUGHT TO HAVE WELL APPRECIATED THE FA CT THAT THE A.O HAD NOT DOUBTED GENUINENESS OF SALES MADE BUT ONLY DOUBTED AND TREATED PURCHASES AS BOGUS, WHICH IS BEYOND A FAIR REASON AS, IOGICALLY THERE COULD BE NO SALES WITHOUT PURCHASES. 4. THE LD. CIT (A) ERRED IN CONFIRMING THE ADDITION OF RS. 2,92,30,837/ - AND NOT CONSIDERING THE EVIDENCES WHICH WAS SUBMITTED BY THE APPELLANT AND SAME IS ALLOWABLE AS EXPENDITURE CONNECTED WITH BUSINESS. 5. THE LD.CIT (A) OUGHT TO HAVE APPRECIATED THE FACT THAT THE AMOUNT OF RS.2,92,30,737/ - REPRESENTS THE REPAYMENT OF LOAN MADE TO DCO BANK OUT OF SALE PROCEEDS RECEIVED BY THE APPELLANT. 6. THE LD. CIT (A) ERRED IN ORDERING THE ASSESSING OFFICER TO CARRY FORWARD THE LOSS INSTEAD OF SETOFF AGAINST THE INCOME AS DETERMINED BY THE AO. 7. THE ASSESSE E MAY ADD, ALTER, OR MODIFY OR SUBSTITUTE ANY OTHER POINTS TO THE GROUNDS OF APPEAL AT ANY TIME BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 4. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS FURNISHED THE DETAILS BOTH BE FORE THE ASSESSING OFFICER AS WELL AS 4 ITA NO. 1 343 /HYD/2018 THE CIT(A) AND THE SAME IS NOW FURNISHED BY WAY OF A PAPER BOOK. THE ASSESSEE HAS STATED THAT ALL THE RELEVANT DOCUMENTS WERE FILED BEFORE THE ASSESSING OFFICER AND THE CIT(A) BUT THEY HA VE NOT CONSIDERED THE SAME AND PRAYED FOR REMIT TING BACK TO THE FILE OF CIT(A) FOR RECONSIDERATION. THE LD. D.R. HOWEVER SUBMITTED THAT ALL THESE DOCUMENTS WERE NOT FILED BEFORE THE ASSESSING OFFICER OR CIT(A). IN SUPPORT OF ASSESSEE'S CONTENTION THEREOF, THE ASSESSEE FILED A COVERING LETTER ENCLOSING ALL THE DETAILS. WE FIND THAT ALL THE RELEVANT DETAIL S ARE NOT MENTIONED IN THE COVE RING LETTER FILED BY THE ASSESSEE . T HEREFORE , IT CANNOT BE PRESUMED THAT THE ASSESSEE HAD FILED ALL THE DETAILS BEFORE THE LOWER AUTHORITIES . HOWEVER , IN THE INTEREST OF JUSTICE, THE DOCUMENTS NOW FILED ARE TREAT ED AS ADDITIONAL EVIDENCE AND AFTER ADMIT TING THE SAME , WE REMAND THE SAME TO THE FILE OF ASSESSING OFFICER FOR RECONSIDERATION AS PER LAW. THE ASSESSING OFFICER SHALL CARRYOUT DE NOVO VERIFICATION OF ALL THESE DOCUMENTS AND AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF HEARING , DECIDE THE ISSUE IN ACCORDANCE WITH LAW. 5. IN THE RESULT, THE ASSESSEE'S APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15TH MARCH, 2021. SD/ - SD/ - (A. MOHAN ALANKAMONY) (SMT. P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER H YDERABAD, DT. 15TH MARCH, 2021. * REDDY GP 5 ITA NO. 1 343 /HYD/2018 COPY TO : 1. M/S. AMEDA INFO SYSTEM PVT. LTD., AYYAPPA SOCIETY, PLOT NO.1182, MADHAPUR, HYDERABAD . 2. DCIT, CIRCLE 1(1), HYDERABAD. 3. PR. C I T - 1, HYDERABAD. 4. CIT(APPEALS) - 1, HYDERABAD. 5. DR, ITAT, HYDERABAD. 6. GUARD FILE. BY ORDER SR. PVT. SECRETARY, ITAT, HYDERABAD.