Brilliant Bio Pharma Limited, Hyderabad V. Deputy Commissioner of Income Tax , Circle-1(3), Hyderabad

ITA 1791/Hyd/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6802 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2011-2012
• Appeal Filed On: 02-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH PADUCHURI
• Assessee Lawyers: K K GUPTA
• Keywords: Opportunity of being heard; Additional evidence; Revised return
• Section: 142(1); 115JB; 143(1); 68

Judgement Text

IN T HE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A , HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 1791 /HYD/201 7 & SA NO. 168/HYD/2019 ASSESSMENT YEAR: 20 1 1 - 1 2 BRILLIANT BIO PHARMA LTD., HYDERABAD. PAN A AACB7874L VS. DY. COMMISSIONER OF I NCOME - TAX , CIRCLE 1 ( 3 ) , HYDERABAD. ( APPELLANT ) (RESPONDENT) ASSESSEE BY : SHRI K .K. GUPTA REVENUE BY : S HRI DINESH PADUCHURI DATE OF HEARING : 0 2 / 0 7 /201 9 DATE OF PRONOUNCEMENT : 24 / 0 7 / 201 9 O R D E R PER S . RIFAUR RAHMAN , A .M. : T H IS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A) 1 , DATED 1 2 / 07 /201 7 , HYDERABAD FOR AY 20 1 1 - 1 2 . 2. BRIEF FACTS OF THE CASE ARE, THE ASSESSEE , ENGAGED IN THE BUSINESS OF MANUFACTURE AND TRADING MEDICINES , FILED ITS RETURN OF INCOME FOR THE AY 2011 - 12 ON 2 9 /09/2011 ADMITTING TOTAL INCOME OF RS. 3,35,002/ - . SUBSEQUENTLY, THE ASSESSEE FILED ITS REVISED RETURN OF INCOME ON 03/03/2012 ADMITTING TOTAL INCOME OF RS. 42,29,255/ - UNDER NORMAL PROVISIONS AND BOOK P ROFIT OF RS. 1,17,80,308/ - UNDER THE PROVISIONS OF SECTION 115JB OF THE INCOME - TAX ACT, 1961 ( IN SHORT THE ACT). THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT. SUBSEQUENTLY, THE CASE WAS CONVERTED TO SCRUTINY AS PER THE CBDT INSTRUCTIONS. ACCORDINGLY, NOTICES U/S 143(2) AND 142(1) WERE ISSUED AND SERVED ON THE ASSESSEE. 2 ITA NO. 1791 /HYD/1 7 BRILLIANT INDUSTRIES PVT. LTD. , HYD. . 2.1 DURING THE ASSESSMENT PROCEEDINGS, AO NOTICED THAT SHARE APPLICATION MONEY PENDING FOR ALLOTMENT AS ON 31/03/2011 HAS INCREASED FROM RS. 4,74,50,000/ - TO RS. 5,87,50,000/ - . WHEN AS KED TO FILE COMPLETE DETAILS WITH REGARD TO SHARE APPLICATION MONEY PENDING FOR ALLOTMENT, ASSESSEE FILED LIST OF SHARE APPLICATIONS PENDING FOR ALLOTMENT OF 16 PERSONS. IT WAS NOTICED THAT DURING THIS AY, ASSESSEE HAS RECEIVED SHARE APPLICATION MONEY FROM THE FOLLOWING FOUR PERSONS: S.NO. DATE NAME OF THE SHARE HOLDER AMOUNT (RS.) 1. 31/03/11 SHRI DEVA SURESH 25,00,000 2. 31/03/11 M/S ALLIED CONCEPTS 30,00,000 3. 31/03/11 SHRI SUNIL 38,00,000 4. 31/03/11 SHRI JAGDISH GANDHI 20,00,000 FURT HER, ASSESSEE HAS SUBMITTED ADDRESSE S OF THE ABOVE PERSONS , BUT, NOT SUBMITTED ANY PAN DETAILS OF THREE SHARE HOLDERS AND SUBMITTED WRONG PAN DETAILS OF SHRI JAGDISH GANDHI . THEY ALSO SUBMITTED LEDGER EXTRACTS OF THE ABOVE PARTIES. AFTER VERIFYING ALL THE ABOVE LEDGER EXTRACTS, AO SENT AN INSPECTOR TO VERIFY THE ADDRESSES SUBMITTED BY THE ASSESSEE OF THE ABOVE PERSONS. IT WAS NOTICED THAT NONE OF THE ADDRESSES ARE PROPER AND ASSESSEE HAS NOT CLEARLY EXPLAINED WHY THE ADVANCES RECEIVED FROM THEM AND LATER C ONVERT ED THE SAME INTO SHARE APPLICATION MONEY AND THEIR SOURCES OF RECEIPTS. CONSIDERING THE ABOVE FACTS, AO MADE ADDITION U/S 68 OF THE ACT. FURTHER, T HE AO HAS MADE OTHER ADDITIONS DURING THIS YEAR ALONG WITH ADDITIONS U/S 68 . HOWEVER, THEY ARE NOT THE SUBJECT MATTER OF APPEAL BEFORE US. 3. AGGRIEVED WITH THE ABOVE ORDER, ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). 4. BEFORE THE CIT(A), ASSESSEE FILED LEDGER EXTRACTS AND BANK STATEMENTS REFLECTING THE SHARE APPLICATION MONEY AND MADE A 3 ITA NO. 1791 /HYD/1 7 BRILLIANT INDUSTRIES PVT. LTD. , HYD. . SUBMISSION BEFORE THE CIT(A). HOWEVER, CIT(A) HAS CONFIRMED THE ADDITION MADE BY THE AO REJECTING THE CONTENTION OF THE ASSESSEE. 5. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: I) THE ADDITION OF S HARE APPLICATION MONEY TO THE TOTAL INCOME RETURNED, IS NOT CORRECT WHEN THE ASSESSEE COMPANY RECEIVED THE SAME THROUGH BANKING CHANNEL, AND THE SAME IS REFLECTED IN THE BANK ACCOUNTS OF THE COMPANY. 2) THE ASSESSING OFFICER HAS NOT ATTEMPTED TO VERIFY T HE GENUINENESS OF THE TRANSACTIONS WITH THE HELP OF THE MATERIAL THAT WAS ON RECORD AND HAS ADDED BACK SHARE APPLICATION MONEY TO THE TOTAL INCOME. 3) ON THE ABOVE AND OTHER GROUNDS THAT MAY ARISE DURING THE COURSE OF APPEAL, THE APPELLANT PREFERS THIS A PPEAL, REQUESTING THE HONOURABLE IT AT FOR AN ORDER OF DELETION OF THE ADDITION. 6. AT THE TIME OF HEARING, LD. AR OF THE ASSESSEE SUBMITTED THAT AO HAS COMPLETED THE ASSESSMENT BASED ON THE INFORMATION AVAILABLE BEFORE HIM AND IT IS NORMAL TO GET SUSPICION ON THE TRANSACTIONS. H E SHOULD HAVE RAISED BEFORE THE ASSESSEE AND G O T CLARIFIED, BUT, AO HAS NOT GIVEN ANY OPPORTUNITY TO THE ASSESSEE TO CLARIFY THE QUERIES/SUSPICION BEFORE COMPLETING THE ASSESSMENT. HOWEVER, ASSESSEE HAS SUBMITTED THE RELEVANT BANK STATEMENTS, LEDGER EXTRACTS IN THE BOOKS OF THE ASSESSEE AS WELL AS IN THE BOOKS OF T HE PARTIES BEFORE CIT(A). HE SUBMITTED THAT ALL THE PARTIES, WHO WERE INVESTED IN THE COMPANY ARE TRADE CREDITORS, WHO ARE HAVING DEALINGS WITH THE COMPANY AND SUBMITTED THAT ALL THE PARTIES HAVE NOW SUBMITTED THEIR CONFIRMATION LETTERS CONFIRMING THE INV ESTMENT OF SHARE APPLICATION MONEY IN THE ASSESSEES COMPANY. ALL THESE EVIDENCES ARE SUBMITTED AS ADDITIONAL EVIDENCES WHICH WERE NOT SUBMITTED BEFORE THE TAX AUTHORITIES. HE PRAYED THAT ONE MORE OPPORTUNITY MAY BE EXTENDED TO THE ASSESSEE TO SUBMIT ALL T HE EVIDENCES BEFORE TAX AUTHORITIES AND THEREFORE, THE MATTER MAY BE REMITTED BACK TO AO FOR VERIFICATION. 4 ITA NO. 1791 /HYD/1 7 BRILLIANT INDUSTRIES PVT. LTD. , HYD. . 7. THE LD. DR, ON THE OTHER HAND, SUBMITTED THAT DURING ASSESSMENT PROCEEDINGS, ASSESSEE HAS NOT SUBMITTED ANY PROPER EVIDENCES AND SOURCES OF RECE IPT OF SHARE APPLICATION MONEY AND, THEREFORE, HE SUPPORTED THE FINDINGS OF THE TAX AUTHORITIES. 8. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. DURING THE ASSESSMENT PROCEEDINGS, ASSESSEE HAS FILED ADDRESSES AND PAN DETAILS BEFOR E THE AO AND THE AO HAS COMPLETED THE ASSESSMENT BASED ON THE INFORMATION AVAILABLE ON RECORD BY MAKING CERTAIN ADDITIONS. HOWEVER, ASSESSEE HAS SUBMITTED BANK STATEMENTS AND LEDGER EXTRACTS BEFORE CIT(A). WE NOTICE THAT CIT(A) HAS NOT CONSIDERED ANY OF TH E ABOVE INFORMATIONS AND HAS NOT EVEN REFERRED IN HER ORDER. NOW, BEFORE US, ASSESSEE HAS FILED CONFIRMATION LETTERS FROM THE ABOVE INVESTORS SINCE THE AO HAS MADE THIS ADDITION FOR THE REASON THAT THE ASSESSEE HAS NOT SUBMITTED ANY CONFIRMATION LETTERS OR PRODUCED ANY OF THE ABOVE PERSONS BEFORE HIM FOR CONFIRMATION. SINCE THESE ADDITIONAL EVIDENCES NEED VERIFICATION, WE ARE INCLINED TO REMIT THIS ISSUE BACK TO THE FILE OF AO TO VERIFY THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE AS WELL AS HIS SUBMISSIO NS AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. AT THE SAME TIME, WE DIRECT THE ASSESSEE ALSO TO FILE ALL THE RELEVANT INFORMATION BEFORE THE AO AND, IF NECESSARY, PRODUCE THE ABOVE PERS ONS BEFORE THE AO FOR VERIFICATION, AS PER THE DIRECTIONS OF THE AO, IN ORDER TO VERIFY IN THE LIGHT OF THE PROVISIONS OF SECTION 68 OF THE ACT. 8.1 AS THE CORRESPONDING APPEAL IS ADJUDIC ATED , THE S.A. F ILED BY THE ASSESSEE BECOMES INFRUCTUOUS AND DISMIS SED THE SAME AS INFRUCTUOUS. 5 ITA NO. 1791 /HYD/1 7 BRILLIANT INDUSTRIES PVT. LTD. , HYD. . 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES AND THE S.A. IS DISMISSED. PRONOUNCED IN THE O PEN COURT ON 24 TH JULY , 201 9 . SD/ - SD/ - ( P. MADHAVI DEVI ) (S . RIFAUR RAHMAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 24 TH JULY , 201 9 KV C OPY TO: - 1) BRILLIANT INDUSTRIES PVT. LTD ., C/O SRI K.K. GUPTA, CA, 3464, DUNDOO VIHAR, RP ROAD, SECUNDERABAD 500 0 03 . 2) DC IT, CIRCLE 1 ( 2 ) , AAYAKAR BHAVAN, BASHEER BAGH, HYDERABAD 3) CIT(A) 1 HYDERABAD. 4) PR. CIT - 1 , HYD. 5 ) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. 6 ) GUARD FILE