Kranthi Edifice Private Limited, Hyderabad V. Dy. Commissioner of Income Tax, Circle-2(1), Hyderabad

ITA 1667/Hyd/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5588 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 29-09-2020
• Assessment Year: 2013-2014
• Appeal Filed On: 28-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C DEVDAS SHRI M DAYASAGAR
• Assessee Lawyers: A V RAGHURAM
• Section: 40(a)(ia); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER I.T.A. NO. 1667/HYD/2017 ASSESSMENT YEAR: 2013-14 M/S.KRANTHI EDIFICE PRIVATE LIMITED, HYDERABAD [PAN: AAECK7906J] VS THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2(1), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI A.V.RAGHU RAM FOR SHRI K.C.DEVDAS FOR REVENUE : SHRI M.DAYASAGAR, DR DATE OF HEARING : 29-09-2020 DATE OF PRONOUNCEMENT : 06-10-2020 O R D E R PER SMT. P. MADHAVI DEVI, J.M. : THIS IS ASSESSEES APPEAL FOR THE AY.2013-14, DIRECT ED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)2, HYDERABAD, DATED 31-07-2017. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE-COMPAN Y, WHICH IS ENGAGED IN THE BUSINESS OF CONSTRUCTION ACTIVI TY, FILED ITS RETURN OF INCOME FOR THE AY.2013-14 ON 01-10-2013, ADMITTING INCOME OF RS.1,41,78,020/-. 3. DURING THE ASSESSMENT PROCEEDINGS U/S.143(3) OF THE OF THE INCOME TAX ACT [ACT], THE ASSESSING OFFICER (AO) OB SERVED ITA NO. 1667/HYD/2017 :- 2 -: THAT OUT OF THE TOTAL PAID-UP SHARE CAPITAL OF ASSESSEE I. E., RS.13 CRORES, RS.5 CRORES HAVE BEEN TRANSFERRED FROM PARTNERSHIP FIRM VIZ., KRANTI CONSTRUCTION ON CONVERSI ON INTO COMPANY AND THE BALANCE AMOUNT OF RS.8 CRORES HAS BEE N RECEIVED IN CASH. THE ASSESSEE FILED CONFIRMATION LE TTERS FROM THE PARTIES WHO HAVE INVESTED IN CASH IN WHICH THEY CON FIRMED THAT INVESTMENTS IN CASH. THE AO OBSERVED THAT THE ASSESS EE FAILED TO FURNISH THEIR RETURNS OF INCOME AND BANK STATE MENTS AND THEREFORE, HE HELD THAT THE IDENTITY OF THE PARTIES, GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF TH E PARTIES IS NOT PROVED. THUS, HE INVOKED THE PROVISIONS OF SECTION 68 OF THE ACT AND MADE THE ADDITION OF RS.8 CRO RES. HE ALSO MADE CERTAIN OTHER ADDITIONS U/S.40(A)(IA) OF THE ACT AND DISALLOWED ROC CHARGES. 4. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A), BUT DID NOT APPEAR BEFORE THE CIT(A) INSPITE OF NOTICES FOR HEARINGS ON 13-03-2017, 30-03-2017, 17-04-2017, 15- 05- 2017, 30-05-2017, 26-06-2017 AND 11-07-2017 ISSUED TO THE ASSESSEE. THEREFORE, THE CIT(A) PROCEEDED TO DISPOSE- OF THE APPEAL AND CONFIRMED THE ASSESSMENT ORDER. 5. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US BY RAISING THE FOLLOWING GROUNDS : 1. THE ORDER OF THE HON'BLE CIT(A) IS ERRONEOUS IN LAW AS WELL AS FACTS OF THE CASE. 2. THE HON'BLE CIT(A) WITHOUT ALLOWING PROPER AND S UFFICIENT OPPORTUNITY DISMISSED THE APPEAL AND THEREFORE THE ORDER CANNOT BE HELD AS VALID. ITA NO. 1667/HYD/2017 :- 3 -: 3. THE HON'BLE CIT(A) OUGHT TO HAVE OBSERVED THAT T HE ASSESSING OFFICER ERRED IN MAKING ADDITION OF RS.8 CRORES BY INVOKING PROVISIONS OF SECTION 68 OF THE IT ACT AND THEREFORE, OUGHT TO HAVE DELETED THE ADDITION. 4. THE HON'BLE CIT(A) OUGHT TO HAVE HELD THAT THE A SSESSING OFFICER ERRED IN DISALLOWANCE OF EXPENDITURE OF RS.17,91,43 1/- BY INVOKING PROVISIONS OF SECTION 40(A)(IA) OF THE IT ACT AND T HEREFORE THE SAME IS LIABLE TO BE DELETED. 5. THE HON'BLE CIT(A) OUGHT TO HAVE OBSERVED THAT T HE DISALLOWANCE OF EXPENDITURE OF RS.3,73,508/- BY THE ASSESSING OFFIC ER BY MENTIONING THAT THE SAME REPRESENT ROC CHARGES IS ERRONEOUS AN D THEREFORE THE SAME IS LIABLE TO BE DELETED. 6. ANY OTHER GROUND WILL BE RAISED AT THE TIME OF H EARING. 6. THE CASE IS TAKEN UP FOR HEARING ON 29-09-2020 THR OUGH VIDEO CONFERENCING AND BOTH THE PARTIES WERE HEARD. 7. HAVING GONE THROUGH THE ASSESSMENT ORDER AS WELL A S THE ORDER OF THE CIT(A), WE FIND THAT THE ASSESSEE HAS NOT F ILED ANY EVIDENCE BEFORE THE CIT(A) DUE TO WHICH THE CIT(A) WAS CONSTRAINED TO CONFIRM THE ASSESSMENT ORDER BY OBSERVIN G THAT THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE DURING THE APPELLATE PROCEEDINGS TO REBUT THE CONCLUSIONS OF THE A O IN THE ASSESSMENT ORDER. THE CIT(A) OUGHT TO HAVE DECIDED THE APPEALS ON MERITS. 8. LD.COUNSEL FOR THE ASSESSEE PRAYED FOR ANOTHER OPPORTUNITY TO PRESENT ITS CASE BEFORE THE CIT(A). 9. LD.DR WAS ALSO HEARD. 10. TAKING INTO CONSIDERATION THE FACT THAT NONE APPEARED BEFORE THE CIT(A) AND THAT EVEN THE CIT(A) HAS NOT DISPO SED-OF ITA NO. 1667/HYD/2017 :- 4 -: THE APPEAL ON MERITS BUT HAS MERELY CONFIRMED THE ASSES SMENT ORDER, WE DEEM IT FIT AND PROPER TO REMAND THE ISSUE TO THE FILE OF CIT(A) WITH A DIRECTION TO PASS A SPEAKING ORDER O N MERITS OF THE CASE. THE ASSESSEE IS DIRECTED TO FILE ALL THE RELE VANT MATERIAL BEFORE THE CIT(A) AND CO-OPERATE WITH THE CIT( A) FOR EARLY CONCLUSION OF THE APPEAL PROCEEDINGS. 11. IN THE RESULT, THE APPEAL OF ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH OCTOBER, 2020 SD/- SD/- ( A. MOHAN ALANKAMONY ) ( P. MADHAVI DEVI ) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 06-10-2020 TNMM ITA NO. 1667/HYD/2017 :- 5 -: COPY TO : 1.M/S.KRANTHI EDIFICE PRIVATE LIMITED, C/O.B.NARSIN G RAO & CO., CHARTERED ACCOUNTANTS, PLOT NO.554, ROAD NO.92 , JUBILEE HILLS, HYDERABAD. 2.THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2(1 ), HYDERABAD 3.CIT(APPEALS)-2, HYDERABAD. 4.PR.CIT-2, HYDERABAD. 5.D.R. ITAT, HYDERABAD. 6.GUARD FILE.