M/s Show Tech Stone International Pvt. Ltd., Visakhapatnam V. THE DCIT, CENTRAL CIRCLE-2, Visakhapatnam

ITA 198/VIZ/2013

• Counselvise Citation: [2016] 130 COUNSELVISE.COM (IT) 9806 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 year(s) 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 02-03-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 28-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M B REDDY
• Assessee Lawyers: C V S MURTHY
• Keywords: Business income; Assessment record
• Section: 143(3); 263; 10

Judgement Text

ITA NO.198/VIZAG/2013 M/S. SHOW TECH STONE INTERNATIONAL PVT. LTD., VSKP 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NO.198/VIZAG/2013 ( / ASSESSMENT YEAR: 2009-10) M/S. SHOW TECH STONE INTERNATIONAL PVT. LTD., VISAKHAPATNAM VS. DCIT, CENTRAL CIRCLE - 2, VISAKHAPATNAM [PAN: AAICS 3852M ] ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI C.V.S. MURTHY, AR / RESPONDENT BY : SHRI M.B. REDDY, DR / DATE OF HEARING : 23.08.2016 / DATE OF PRONOUNCEMENT : 07.10.2016 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL FILED BY ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(CENTRAL), HYDERABAD DATED 20.2.2013 FOR THE ASS ESSMENT YEAR 2009- 10. ITA NO.198/VIZAG/2013 M/S. SHOW TECH STONE INTERNATIONAL PVT. LTD., VSKP 2 2. FACTS ARE IN BRIEF THAT THE ASSESSEE COMPANY ENG AGED IN THE BUSINESS OF GRANITE EXPORTS. THE ASSESSEE FILED A RETURN OF INCOME WHEREIN HE HAS CLAIMED DEDUCTION U/S 10A(1A) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS 'THE ACT'). THE A.O. A LLOWED THE DEDUCTION CLAIMED BY THE ASSESSEE AND COMPLETED THE ASSESSMEN T U/S 143(3) OF THE ACT. 3. THE LD. COMMISSIONER ON VERIFICATION OF THE RECO RDS NOTICED THAT ASSESSEE WHILE FILING THE PROFIT & LOSS ACCOUNT, HE HAS SHOWN INTEREST INCOME OF ` 4,17,610/- ON CREDIT SIDE. HOWEVER, WHILE COMPUTI NG THE BUSINESS INCOME FOR THE PURPOSE OF DEDUCTION U/S 10 A(1A) OF THE ACT, THE ASSESSEE HAS NOT REDUCED THE INTEREST INCOME OF ` 4,17,610/-. THE COMMISSIONER OF THE OPINION THAT INTEREST INCOME EA RNED BY THE ASSESSEE DOES NOT PARTAKE THE CHARACTER OF PROFIT A ND GAINS DERIVED FROM EXPORT OF THE GRANITE BLOCKS TO MAKE IT ELIGIBLE FO R DEDUCTION U/S 10A(1A) OF THE ACT. THE LD. COMMISSIONER HAS OBSERVED THAT THE A.O. WHILE COMPLETING THE ASSESSMENT, HE HAS NOT EXAMINED THE INTEREST CLAIM OF THE ASSESSEE AND ALLOWED THE DEDUCTION. ACCORDING TO THE COMMISSIONER, THE ORDER PASSED BY THE A.O. IS ERRON EOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE BY ISSUING A SHOW CA USE NOTICE DATED 4.1.2013 AND CALLED THE EXPLANATION FROM THE ASSESS EE. THE ASSESSEE ITA NO.198/VIZAG/2013 M/S. SHOW TECH STONE INTERNATIONAL PVT. LTD., VSKP 3 HAS SUBMITTED BEFORE THE CIT(A) THAT THE DEPOSIT MA DE BY THE ASSESSEE IN THE BANK FOR THE PURPOSE OF OBTAINING VARIOUS CR EDIT FACILITIES AND THEREFORE ELIGIBLE FOR DEDUCTION U/S 10A(1A) OF THE ACT. 4. ON THE OTHER HAND, THE LD. D.R. HAS SUBMITTED TH AT THE A.O. WITHOUT VERIFYING THE RECORDS AND WITHOUT APPLICATI ON OF MIND SIMPLY ALLOWED THE DEDUCTION CLAIMED BY THE ASSESSEE. THE REFORE, THE ORDER PASSED BY THE A.O. IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 5. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE ASSESSEE IS IN THE BUSINESS OF EXPORT OF GRANITE, F ILED RETURN OF INCOME AND ALSO CLAIMED DEDUCTION U/S 10A OF THE ACT. WHIL E CLAIMING THE DEDUCTION U/S 10A OF THE ACT, THE ASSESSEE ALSO INC LUDED INTEREST INCOME OF ` 4,17,610/-. THIS FACT WAS NOT EXAMINED BY THE A.O . THE LD. COMMISSIONER WHILE VERIFYING THE ASSESSMENT RECORD FOUND THAT THE A.O. HAS ALLOWED THE INTEREST INCOME AS DEDUCTION U/S 10 A OF THE ACT WITHOUT VERIFICATION AND THEREFORE, DIRECTED THE A.O. TO VE RIFY THE DETAILS OF INTEREST INCOME AND DECIDE IN ACCORDANCE WITH LAW. WE HAVE GONE THROUGH THE ASSESSMENT ORDER. THE A.O. HAS NOT AT ALL EXAMINED WHETHER THE INTEREST INCOME IS ELIGIBLE FOR DEDUCTI ON U/S 10A OR NOT. THE ITA NO.198/VIZAG/2013 M/S. SHOW TECH STONE INTERNATIONAL PVT. LTD., VSKP 4 A.O. HAS ALLOWED THE CLAIM OF THE ASSESSEE WITHOUT ANY ENQUIRY/EXAMINATION. WE FIND THAT THE A.O. NEITHER APPLIED THE MIND NOR EXAMINED THE DETAILS, THUS, THE ORDER PASSED BY THE A.O. IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE. THEREFORE, THE LD. COMMISSIONER CORRECTLY INVOKED SECTION 263 OF T HE ACT. IN VIEW OF THE ABOVE, THIS APPEAL FILED BY THE ASSESSEE IS DIS MISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 7 TH OCT16. SD/- SD/- ( . ) ( . ) (G. MANJUNATHA) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER ! /VISAKHAPATNAM: % /DATED : 7.10.2016 VG/SPS '! (! /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT M/S. SHOW TECH STONE INTERNATION AL PVT. LTD., D.NO.10-01-44/1, 2 ND FLOOR, OPP. IDBI BANK, SIRIPURAM, VISAKHAPATNAM 2. / THE RESPONDENT DCIT, CENTRAL CIRCLE-2, VISAKHA PATNAM 3. ) / THE CIT(CENTRAL), HYDERABAD 4. ) ( ) / THE CIT(A),VISAKHAPATNAM 5. ! , , , , ! / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // /0 , (SR.PRIVATE SECRETARY) , , ! / ITAT, VISAKHAPATNAM