Cybercity Builders & Developers Private Limited , Hyderabad V. Assistant Commissioner of Income Tax ,Central Circle-1(1) , Hyderabad

ITA 185/Hyd/2022

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 9801 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-10-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 24-10-2022
• Assessment Year: 2016-2017
• Appeal Filed On: 10-05-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure; Earning of tax free income; Rule 8D; Set aside
• Section: 132; 143(3); 14A

Judgement Text

आयकर अपीलीय अधिकरण, हैदराबाद पीठ में IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “B”, HYDERABAD BEFORE SHRI RAMA KANTA PANDA, ACCOUNTANT MEMBER & SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER आ.अपी.सं / ITA No. 185/Hyd/2022 (निर्धारण वर्ा / Assessment Year: 2016-17) M/s. Cybercity Builders & Developers Pvt. Ltd., Hyderabad [PAN No. AACCC8152C] Vs. Assistant Commissioner of Income Tax, Central Circle-1(1), Hyderabad अपीलधर्थी / Appellant प्रत् यर्थी / Respondent निर्धाररती द्वधरध/Assessee by: Shri K.C.Devdas, AR रधजस् व द्वधरध/Revenue by: Shri I.Sirish Kumar, DR स ु िवधई की तधरीख/Date of hearing: 25/10/2022 घोर्णध की तधरीख/Pronouncement on: 25/10/2022 आदेश / ORDER PER K. NARASIMHA CHARY, JM: Aggrieved by the order dated 25/02/2022 passed by the learned Commissioner of Income Tax (Appeals)-11, Hyderabad (“Ld. CIT(A)”) in the ITA No. 185/Hyd/2022 Page 2 of 5 case of Cybercity Builders & Developers Private Limited (“the assessee”) for the assessment year 2016-17, assessee preferred this appeal. 2. Brief facts of the case are that the assessee is engaged in the business of constructions. There was a search and seizure operation under section 132 of the Income Tax Act, 1961 (for short “the Act”) on 18/02/2006 and the assessee filed the return of income for the assessment year 2016-17 on 30/11/2016 declaring an income of Rs. 25,46,81,620/-. Assessment under section 143(3) of the Act was complete by order dated 27/04/2017 by making an addition of Rs. 1,49,51,533/- being disallowance under section 14A of the Act read with Rule 8D of the of the Income tax Rules, 1963 (“the Rules”). 3. Against such an assessment order, the assessee preferred an appeal before the learned CIT(A) and the learned CIT(A) by order dated 27/11/2018, deleted such an addition. When the Revenue preferred an appeal in ITA No. 421/Hyd/2019, a Co-ordinate Bench of this Tribunal by order dated 27/05/2021 set aside the order of the learned CIT(A) and restored the issue to the file of the learned CIT(A) with a direction to decide the issue afresh in the light of the judgement relied upon by the assessee and if it is found otherwise, to restrict the disallowance to the extent of exempt income received by the assessee. 4. Subsequently, the learned CIT(A) passed the order dated 25/02/2022. Learned CIT(A) noted that several opportunities were granted to the assessee between 12/07/2021 and 22/02/2022 but the assessee failed to avail the same. Basing on the observations of the Tribunal that if the assessee is unable to substantiate its case in the light of law relied upon by him before the learned CIT(A), the assessment order stands confirmed, Learned CIT(A) concluded that the assessee failed to substantiate the claim and, therefore, confirmed the assessment order. ITA No. 185/Hyd/2022 Page 3 of 5 5. Assessee is therefore before us in this appeal stating that there are valid reasons for the assessee in its inability to appear before the learned CIT(A) and, therefore, the learned CIT(A) adjourned the matter several times. According to the Learned AR, the absence of the assessee cannot be a ground to dismiss the appeal without referring the judgment of the Tribunal in the case of M/s.Delite Enterprises and confirmed by the Hon'ble Bombay High Court in the case of CIT vs. M/s.Delite Enterprises, relied upon by the assessee. 6. Learned DR, per contra, submitted that in view of the failure of the assessee to substantiate the claim before the learned CIT(A), learned CIT(A) is justified in confirming the assessment order. 7. We have gone through the record in the light of the submissions made on either side. It is a fact that in ITA No. 421/Hyd/2019 by order dated 27/05/2021 referred to the decision of the Hon'ble Bombay High Court in the case of M/s.Delite Enterprises (supra) and directed the learned CIT(A) to look into the matter in the light of the decision relied upon by the assessee. A reading of the impugned order shows that learned CIT(A) did not refer to the decision of the Hon'ble Bombay High Court to decide whether the case of the assessee is covered by such judgment. 8. In view of this, we are of the considered opinion that the direction of the Co-ordinate Bench of this Tribunal holds good now also and has to be complied with and the learned CIT(A) has to verify whether or not the case of the assessee is covered by the decision of the Hon'ble Bombay High Court. We, therefore, set aside the impugned order and restore the issue to the file of the learned CIT(A) for complying with the direction of the Co- ordinate Bench of this Tribunal in ITA No. 421/Hyd/2019 by order dated 27/05/2021. Grounds are accordingly treated as allowed for statistical purposes. ITA No. 185/Hyd/2022 Page 4 of 5 9. In the result, appeal of the assessee is treated as allowed for statistical purposes. Order pronounced in the open court on this the 25 th day of October, 2022 Sd/- Sd/- (RAMA KANTA PANDA) (K. NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER Hyderabad, Dated: 25/10/2022 TNMM ITA No. 185/Hyd/2022 Page 5 of 5 Copy forwarded to: 1. M/s. Cybercity Builders & Developers Pvt. Ltd., C/o. B. Narsing Rao & Co., Chartered Accountants, Plot No. 554, Road No. 92, Jubilee Hills, Hyderabad. 2. The ACIT, Central Circle-1(1), Hyderabad. 3. CIT(A)-11, Hyderabad. 4. Pr.CIT(Central)-Hyderabad. 5. DR, ITAT, Hyderabad. 6. GUARD FILE TRUE COPY ASSISTANT REGISTRAR ITAT, HYDERABAD