Sriba Agro Limited , Hyderabad V. Dy. Commissioner of Income Tax , Circle-3(2), Hyderabad

ITA 1851/Hyd/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5617 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-B
• Assessment Year: 2014-2015
• Appeal Filed On: 11-09-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 143(3); 14A

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD (THROUGH VIRTUAL HEARING) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO. 1851/HYD/2018 A.Y. 2014 - 15 SRIBA AGRO LIMITED, HYDERABAD. PAN: AAOFS 4182 M VS. DCIT, CIRCLE - 3(2), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI SAMUEL NAGADESI REVENUE BY: SHRI ROHIT MUJUMDAR, DR DATE OF HEARING: 28/04/2021 DATE OF PRONOUNCEMENT: 29 /04/2021 ORDER THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) - 3, HYDERABAD IN APPEAL NO. 0402/DCIT - 3(2)/HYD/CIT(A) - 3/2016 - 17, DATED 25/06/2018 PASSED U/S. 143(3) R.W.S. 250(6) OF THE ACT FOR THE A.Y. 2014 - 15. 2. THE ASSESSEE HAS RAISED SIX GROU NDS IN ITS APPEAL AND THEY ARE EXTRACTED HEREIN BELOW FOR REFERENCE: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ORDER OF THE LD. CIT(A) IS ERRONEOUS IN LAW AND FACTS OF THE CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE L D. CIT(A) ERRED IN LAW AND FACTS OF THE CASE IN CONFIRMING THE ADDITION MADE BY THE A.O. U/S. 36(1)(III) OF THE IT ACT, 1961 IMPUTING THE INTEREST ON WORKING CAPITAL 2 ADJUSTMENTS MADE WITHIN THE GROUP ENTITIES AND OUGHT TO HAVE APPRECIATED THE SAME DOES NOT GENERATE INTEREST I.E., DISALLOWABLE UNDER SECTION 36(1)(III) OF THE ACT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN LAW AND FACTS OF THE CASE IN CONFIRMING THE AD - HOC DISALLOWANCE OF RS. 27,58,225/ - BEING 10% OF THE EX PENDITURE REGARDING WAGES AND WELFARE, STORES AND SPARES, FREIGHT AND HANDLING AND REPAIRS AND MAINTENANCE AMOUNTING TO RS. 2,75,82,257/ - . THE LD. CIT(A) OUGHT TO HAVE APPRECIATED SUCH AD - HOC DISALLOWANCE IS ARBITRARY, ILLEGAL AND ON MERE SUSPICION AND CA PRICE AND NOT PERMITTED BY LAW. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN LAW AND FACTS OF THE CASE IN CONFIRMING THE ADDITION ON ACCOUNT OF SECTION 14A OF THE INCOME TAX ACT, 1961. ON THE FACT AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE APPRECIATED NO SUCH ADDITION TO BE MADE. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN LAW AND FACTS OF THE CASE IN MAKING THE ADJUSTMENT TO BOOK PROFITS OF THE AMOUNT OF ADDITION MADE UNDER SECTION 14A REFERRED TO IN THE GROUND NO.3 ABOVE. 6. THE APPELLANT CRAVES TO ADD TO, ALTER, DELETE, MODIFY, SUBSTITUTE, WITHDRAW ALL OR ANY OF THE ABOVE GROUNDS. 3. AT THE OUTSET, THE LD. AR SUBMITTED BEFORE US STATING THAT THE LD. CIT (A) HAS PASSED EX - PARTE ORDER WITHOUT PROVIDING PROPER OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. IT WAS THEREFORE PLEADED THAT THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE LD C IT (A) IN ORDER TO PROVIDE ONE MORE OPPORTUNITY TO THE ASSESSEE OF BEING HEARD . LD. DR, ON THE OTHER HAND, VEHEMENTLY OPPOSED TO THE SUBMISSIONS OF THE LD. AR AND ARGUED THAT SUFFICIENT OPPORTUNITIES HAD BEEN PROVIDED TO THE ASSESSEE HOWEVER, ON THE GIVEN DATES OF HEARING, NEITHER THE ASSESSEE NOR ITS REPRESENTATIVE APPEARED BEFORE THE LD. CIT (A). THEREFORE THE LD. CIT (A) HAD NO OTHER OPTION BUT TO PASS EX - PARTE ORDER BASED ON THE MATERIALS 3 AVAILABLE ON RECORD. HENCE, IT WAS PLEADED THAT THE ORDER PASSED BY THE LD. CIT(A) DOES NOT CALL FOR ANY INTERFERENCE. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. ON EXAMINING THE FACTS OF THE CASE, WE FIND MERIT IN THE SUBMISSIONS OF THE LD. DR. THE LD. CIT (A) HAD POSTED T HE CASE ON SEVERAL OCCASIONS. HOWEVER, NONE APPEARED ON BEHALF OF THE ASSESSEE BEFORE THE CIT(A) ON THE DATES OF HEARING. THEREFORE, THE LD. CIT (A) WAS LEFT WITH NO OTHER OPTION EXCEPT TO ADJUDICATE THE APPEAL EX - PARTE. IN THIS SITUATION, WE DO NOT FIN D MUCH STRENGTH IN THE ARGUMENTS ADVANCED BY THE LD. AR. HOWEVER, CONSIDERING ISSUES INVOLVED IN THE APPEAL AND THE PRAYER OF THE LD. AR, IN THE INTEREST OF JUSTICE, WE HEREBY REMIT THE MATTER BACK TO THE FILE OF LD. CIT (A) IN ORDER TO CONSIDER THE APPEAL AFRESH ON MERITS BY PROVIDING ONE MORE OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. AT THE SAME BREATH, WE ALSO HEREBY CAUTION THE ASSESSEE TO PROMPTLY CO - OPERATE BEFORE THE LD. CIT (A) IN THE PROCEEDINGS FAILING WHICH THE LD. CIT (A) SHALL BE AT LIBERTY T O PASS APPROPRIATE ORDER IN ACCORDANCE WITH LAW AND MERITS BASED ON THE MATERIALS ON THE RECORD. IT IS ORDERED ACCORDINGLY. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES AS INDICATED HEREINABOVE. 4 PRONOUNCED IN THE OPEN COURT ON THE 29 TH APRIL, 2021. SD/ - SD/ - (P. MADHAVI DEVI) ( A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 29 TH APRIL , 2021 OKK COPY TO: - 1) SRIBA AGRO LIMITED C/O. SAMUEL NAGADESI, CHARTERED ACCOUNTANT, 408, SRI RAMAKRISHNA TOWERS, BESIDES IMAGE HOSPITALS, AMERPET, HYDERABAD 500 073. 2) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 3(2), 7 TH FLOOR, SIGNATURE TOWERS, KONDAPUR, OPP. BOTANICAL GARDEN, HYDERABAD 500 084. 3) THE CIT (A) - 3, HYDERABAD. 4) THE PR. CIT - 3, HYDERABAD. 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE