R.K.Mining Private Limited , Hyderabad V. Dy. Commissioner of Income Tax , Circle-3(1), Hyderabad

ITA 1972/Hyd/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 8879 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 16-03-2021
• Assessment Year: 2014-2015
• Appeal Filed On: 28-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHANTHI PAWAN
• Section: 40A(3); 143(3); 22; 37

Judgement Text

ITA NO 1972 OF 2018 RK MINING P LTD HYDERABAD PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD (THROUGH VIDEO CONFERENCING) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO.1972/HYD/2018 ASSESSMENT YEAR: 2014-15 M/S.RK MINING (P) LTD HYDERABAD PAN:AADCR9571R VS. DY. CIT, CIRCLE 3(1) HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI SHANTHI PAWAN REVENUE BY : SRI SUNIL KUMAR PANDEY,DR DATE OF HEARING: 16/03/2021 DATE OF PRONOUNCEMENT: 22/03/2021 ORDER PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y 2014-15 AGAIN ST THE ORDER OF THE CIT (A)-3, HYDERABAD, DATED 18.7. 2018. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE CO MPANY, ENGAGED IN THE BUSINESS OF MINING CONTRACTORS, E-FI LED ITS RETURN OF INCOME FOR THE A.Y 2014-15 ON 29.11.2014 ADMITTING LOSS OF RS.3,81,33,177/-. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT, THE AO OBSERVED THAT THE ASSESSEE HAS D EBITED AN AMOUNT OF RS.2,51,48,471/- TOWARDS DEDUCTION BY BBC L. THE ASSESSEE WAS ASKED TO SUBMIT THE LEDGER EXTRACT FOR THE SAME ALONG WITH THE NATURE OF DEDUCTION. THE ASSESSEE SU BMITTED THE SAME AND ON PERUSAL , THE AO OBSERVED THAT RS.1,64, 37,684/- WAS TOWARDS DEDUCTION OF SHORT FALL AND RS.87,10,7 87/- WAS FOR ITA NO 1972 OF 2018 RK MINING P LTD HYDERABAD PAGE 2 OF 4 SCHEDULE OF RATES (SOR). THE AO OBSERVED THAT THESE AMOUNTS WERE CHARGED BY BHARAT COKING COAL LTD TOWARDS PENA LTY, AO HOLDING THAT THESE PAYMENTS ARE TOWARDS PENALTY, DI SALLOWED THE SAME AND BROUGHT IT TO TAX. 3. FURTHER, HE ALSO REJECTED THE ASSESSEES CONTENT ION THAT IT HAS MADE PAYMENT IN CASH TO SHRI RAVI SHANKER SI NGH TOWARDS PART PAYMENT FOR PURCHASE OF SPARES. HE ALSO OBSERV ED THAT SOME OTHER CASH PAYMENTS WERE ALSO MADE, AND THEREFORE, HE DISALLOWED A SUM OF RS.1,47,737/- U/S 40A(3) AND BROUGHT IT TO TAX. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A). HO WEVER, THE SAME WAS DISMISSED HOLDING THAT THE ASSESSEE DID NO T APPEAR BEFORE THE CIT (A) AND DID NOT FURNISH ANY EVIDENCE CONTRARY TO THE FINDINGS OF THE AO. THEREFORE, THE ASSESSEE IS IN S ECOND APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUND S OF APPEAL: 1. THE ORDER OF THE AUTHORITIES BELOW IN SO FAR AS IT IS AGAINST THE APPELLANT IS OPPOSED TO LAW, EQUITY, WEIGHT OF EVIDENCE, PROBABILITIES AND THE FACTS AND CIRCUMSTANCES IN TH E APPELLANT'S CASE. 2. THE APPELLANT DENIES HIMSELF LIABLE TO BE ASSESS ED FOR A LOSS OF RS. 1,28,37,269/-, AS AGAINST LOSS RETURNED OF R S. 3,81,33,1771- BY THE APPELLANT, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. WHETHER THE LEARNED AUTHORITIES BELOW ARE JUSTIF IED IN DISALLOWING AN AMOUNT BEING RS. 2,51,48,471/-, CLAI MED BY THE APPELLANT AS ALLOWABLE EXPENDITURE UNDER SECTIO N 37 OF THE INCOME-TAX ACT, 1961, UNDER THE FACTS AND CIRCUMSTA NCES OF THE CASE. 4. WHETHER THE LEARNED AUTHORITIES BELOW ARE JUSTIF IED IN DISALLOWING AN AMOUNT BEING RS. 2,51,48,471/ -, DEB ITED TO THE PROFIT AND LOSS ACCOUNT, AS IT IS INCIDENTAL TO THE CARRYING ON OF THE APPELLANT'S BUSINESS, UNDER THE FACTS AND CI RCUMSTANCES OF THE CASE. 2. 5. THE LEARNED AUTHORITIES BELOW OUGHT TO HAVE C ONSIDERED THE FACTS THAT THE AMOUNT BEING RS. 2,51,48,471/-, WAS PAID TO M/S. BHARAT COOKING COAL LIMITED, FOR NON-FULFILLME NT OF ITS OBLIGATION TO TRANSPORT THE SPECIFIED QUANTITY OF C OAL, AND THE EXPENDITURE IS ALLOWABLE AS THE EXPENDITURE IS INCI DENTAL TO ITA NO 1972 OF 2018 RK MINING P LTD HYDERABAD PAGE 3 OF 4 CARRYING ON OF THE APPELLANT'S BUSINESS, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. WHETHER THE LEARNED AUTHORITIES BELOW ARE CORREC T IN NOT CONSIDERING THE FACT THAT THE EXPENDITURE OF AN AMO UNT BEING RS. 2,51,48471/ -, INCURRED ON DEDUCTION FOR SHORT FALL QUANTITY AN AMOUNT BEING RS. 1,64,37,684/- AND TOWARDS SCHED ULE OF RATES AN AMOUNT BEING RS. 87,10,787/-, RESPECTIVELY , BE TERMED AS EXPENDITURE WITHIN THE MEANING OF SECTION 37 OF THE INCOME-TAX ACT, 1961, UNDER THE FACTS AND CIRCUMSTA NCES OF THE CASE. 7. WHETHER THE LEARNED AUTHORITIES BELOW ARE JUSTIF IED IN HOLDING THAT THE CLAIM OF THE APPELLANT AN AMOUNT B EING RS. 2,51,48,471/-, ARE NOT ELIGIBLE UNDER SECTION 37 OF THE INCOME- TAX ACT, 1961, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 8. WITHOUT PREJUDICE TO THE ABOVE, WHETHER THE LEAR NED AUTHORITIES BELOW ARE JUSTIFIED IN LAW IN DISALLOWI NG AN AMOUNT BEING RS. 2,51,48,471/-, REPRESENTING AN AMOUNT BEI NG RS. 1,64,37,684/- INCURRED TOWARDS DEDUCTION FOR SHORT FALL QUANTITY AND AN AMOUNT BEING RS. 87,10,787/- INCURR ED TOWARDS SCHEDULE OF RATES, RESPECTIVELY, BY HOLDING THAT SUCH PAYMENTS PARTAKE THE NATURE OF PENALTY, UNDER THE F ACTS AND CIRCUMSTANCES OF THE CASE. 9. WHETHER THE LEARNED AUTHORITIES BELOW ARE JUSTIF IED IN LAW IN DISALLOWING AN AMOUNT BEING RS. 1,47,437/-, BY INVO KING THE PROVISIONS OF SECTION 40A(3) OF THE INCOME-TAX ACT, 1961, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 10. WHETHER THE LEARNED AUTHORITIES BELOW OUGHT TO HAVE CONSIDERED THE FACT THAT THE AMOUNT BEING RS. 1,07, 437/-, PAID TO SRI RAVI SHANKER SINGH AND AN AMOUNT BEING RS. 40,000/-, PAID TO SARWAR TYERS, HAS NOT BEEN MADE IN A DAY, U NDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 11. WHETHER THE LEARNED AUTHORITIES BELOW ARE JUSTI FIED IN NOT CONSIDERING THE FACT THAT THE AMOUNT BEING RS. 1,07 ,437/-, PAID TO SRI RAVI SHANKER SINGH AND AN AMOUNT BEING RS. 40,000/-, PAID TO SARWAR TYERS, HAS NOT EXCEEDED TH E LIMIT OF RS. 20,000/- PER DAY, UNDER THE FACTS AND CIRCUMSTA NCES OF THE CASE. 12. WITHOUT PREJUDICE TO THE ABOVE, WHETHER THE LEA RNED ASSESSING OFFICER WAS RIGHT IN LAW IN DISALLOWING A N AMOUNT BEING RS. 1,47,437/-, BY STATING THAT THE APPELLANT MADE PAYMENTS IN CASH BY VIOLATION OF PROVISION OF SECTI ON 40A(3) OF THE INCOME-TAX ACT, 1961, UNDER THE FACTS AND CIRCU MSTANCES OF THE CASE. 13. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, DELET E OR SUBSTITUTE ANY OF THE GROUNDS URGED ABOVE. ITA NO 1972 OF 2018 RK MINING P LTD HYDERABAD PAGE 4 OF 4 14. IN THE VIEW OF THE ABOVE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF THE HEARING OF THE APPEAL, THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED IN THE INTERES T OF JUSTICE AND EQUITY. 4. WE FIND THAT THE ASSESSEE HAD APPEARED BEFORE TH E CIT (A) ON A NUMBER OF OCCASIONS AND AT HIS REQUEST, TH E HEARINGS WERE ADJOURNED FROM TIME TO TIME, BUT FOR THE LAST DATE OF HEARING FIXED ON 17.7.2018, WHEN NONE APPEARED FOR THE ASSE SSEE AND NOBODY SUBMITTED WRITTEN SUBMISSIONS. IN VIEW OF TH E SAME, THE CIT (A) HAS DISMISSED THE ASSESSEES APPEAL. SINCE THE ISSUE IS FACTUAL AND NEEDS VERIFICATION ON THE EVIDENCE FILE D BY THE ASSESSEE BEFORE THE CIT (A), IN THE INTEREST OF JUS TICE, WE DEEM IT FIT AND PROPER TO REMAND THE ISSUE TO THE FILE OF THE C IT (A) FOR DENOVO CONSIDERATION IN ACCORDANCE WITH LAW. NEEDLESS TO M ENTION THAT THE ASSESSEE SHALL BE GIVEN A FAIR OPPORTUNITY OF H EARING. 5. IN THE RESULT, ASSESSEES APPEAL IS TREATED AS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND MARCH, 2021. SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 22 ND MARCH, 2021. VINODAN/SPS COPY TO: 1 M/S. R.K. MINING (P) LTD, NO.1-2-49/15, 1 ST FLOOR, NIZAMPET ROAD, HYDER NAGAR, KUKATPALLY, HYDERABAD 500072 2 DY. CIT, CIRCLE 3(1) HYDERABAD 3 CIT (A)-3 HYDERABAD 4 PR. CIT 3 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER