Income Tax Officer, Ward-16(2), Hyderabad V. New Cyberabad City Projects Private Limited , Hyderabad

ITA 2042/Hyd/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 2583 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-A
• Next Hearing Date: 27-09-2021
• Assessment Year: 2015-2016
• Appeal Filed On: 12-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHOK KARDAM
• Section: 143(3); 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD (THROUGH VIRTUAL HEARING) BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER ITA NO.2042/HYD/2018 ASSESSMENT YEAR: 2015 - 16 INCOME TAX OFFICER, WARD - 16(2), HYDERABAD. VS. M/S. NEW CYBERABAD CITY PROJECTS PVT LTD., HYDERABAD. PAN: AACCC 8896 K (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI B. RAMA KRISHNA REVENUE BY: SHRI ASHOK KARDAM, DR DATE OF HEARING: 27/09/2021 DATE OF PRONOUNCEMENT: 20 / 10 /2021 ORDER PER A. MOHAN ALANKAMONY, AM.: THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT (A) - 4, HYDERABAD IN APPEAL NO. 4/10201/2017 - 18/ITO, W - 16(2)/CIT(A) - 4/HYD/18 - 19, DATED 20/07/2018 PASSED U/S. 143(3) R.W.S 250(6) OF THE ACT FOR THE AY 2015 - 16. 2. THE REVENUE HAS RAISED TWO GROUNDS IN ITS APPEAL HOWEVER, THE CRUX OF THE ISSUE IS THAT THE LD. CIT (A) HAS ERRED IN ALLOWING DEDUCTION INVOKING THE PROVISO TO SECTION 115JB(2)(K)(I) OF THE ACT FOR RS. 28,60,05,649/ - WHILE COMPUTING THE BOOK PROFIT FOR THE PURPOSE OF MAT 2 SINCE THE ASSESSEE HAD NOT OFFERED THE SAME FOR TAXATION DURING THE EARLIER YEAR. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF REAL ESTATE AND URBAN INFRASTRUCTURE FILED ITS RE TURN OF INCOME FOR THE RELEVANT AY 2015 - 16 ON 15/09/2015. SUBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE ACT ON 15/12/2017 WHEREIN THE LD. AO DISALLOWED THE CLAIM OF DEDUCTION OF RS. 28,60,05,649/ - WHIL E COMPUTING THE BOOK PROFIT FOR THE PURPOSE OF MAT SINCE THE ASSESSEE HAD NOT OFFERED THE SAME FOR TAXATION DURING THE EARLIER YEAR VIDE ORDER DATED. ON APPEAL, THE LD. CIT (A) ALLOWED THE APPEAL OF THE ASSESSEE BY OBSERVING AS UNDER: 6. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, ASSESSMENT ORDER AND SUBMISSIONS MADE BY THE APPELLANT. THE ASSESSING OFFICER MAINLY ADDED THE PROVISIONS BY CONCLUDING THAT THEY WERE DEBITED TO THE PROFIT & LOSS ACCOUNT. ON VERIFICATION OF THE FINANCIAL ACCOUNTS OF T HE APPELLANT, IT WAS FOUND THAT THE OBSERVATION OF THE AO IS NOT CORRECT. FOR THE ASST. YEAR 2010 - 11, THE APPELLANT DEBITED TOTAL PROVISIONS OF RS. 28,60,50,649/ - WHICH INCLUDES PROVISIONS TOWARDS DIMINUTION VALUE OF INVESTMENTS OF RS. 5,97,00,309/ - AND D OUBTFUL ADVANCE OF RS. 24,21,25,139/ - . THE TOTAL LOSS ARRIVED FOR THIS AY 2010 - 11 WAS OF RS. 30, 34,95,223/ - . AS PER THE COMPUTATION OF INCOME FOR THIS AY 2010 - 11, THE APPELLANT ADDED BACK THIS DIMINISHING PROVISIONS AND DISCLOSED LOSS OF RS. 2,57,141/ - I N THE RETURN OF INCOME FILED. THEREFORE, IT IS CLEAR THAT FOR THIS AY 2010 - 11 ALSO THE PROVISIONS WERE NOT AFFECT TED EITHER WITH THE PROFIT OR LOSS. FOR THIS ASST. YEAR 2014 - 16, THE APPELLANT HAS REDUCED THESE PROVISIONS FROM THE P & L ACCOUNT. FOR THI S AY ALSO RETURN OF INCOME WAS FILED DECLARING LOSS OF RS. 4,93, 290/ - . THIS AMOUNT OF RS. 28,60,50,649/ - WAS SHOWN IN P & L ACCOUNT BELOW THE PROFIT. THEREFORE, THIS PROVISIONS AMOUNT IS NEITHER AFFECTING IN AY 2010 - 11 NOR FOR THIS ASST. YEAR 2015 - 16. S INCE THERE IS LOSS FILED BY THE APPELLANT FOR THIS ASST YEAR, THEREFORE THE MAT PROVISIONS ARE ALSO NOT APPLICABLE. THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER DELETED. 3 4. AT THE OUTSET, THE LD. AR POINTED OUT TO PAGE NO. 78 OF THE PAPER BOOK BEFORE US TO ESTABLISH THE FACT THAT THE AMOUNT OF RS. 30,32,38,082/ - WAS ADDED BACK TO THE INCOME OF THE ASSESSEE IN THE RETURN FILED FOR THE AY 2010 - 11 WHICH WAS DEBITED TO THE P & L ACCOUNT. THE LD. AR FURTHER REFERRED TO THE PAGE NO. 2 OF THE ASSESSMENT ORDER WHEREIN THE DETAILS OF THE AMOUNT OF RS. 30,32,38,082/ - WAS MENTIONE D . THE LD. AR THEREFORE ARGUED THAT SINCE THE AMOUNT OF RS. 28,60,50,649/ - WHICH IS FORMING PART OF RS. 30,32,38,082/ - IS ALREADY ADDED BACK TO THE INCOME OF THE ASSESSEE IN THE RETURN OF INCOME FOR THE AY 2010 - 11 , THE OBSERVATION MADE BY THE LD. AO THAT THE ASSESSEE DID NOT TREAT THE AMOUNT OF RS. 28,60,50,649/ - AS ITS INCOME FOR THE AY 2010 - 11 IS INCORRECT. THE LD. AR FURTHER SUBMITTED THAT THE LD . CIT (A) AFTER EXAMINING THESE ISSUES IN DETAIL HAD GIVEN RELIEF TO THE ASSESSEE AND THEREFORE THE ORDER OF THE LD. CIT (A) MAY BE UPHELD. THE LD. DR ON THE OTHER HAND ARGUED IN SUPPORT OF THE ORDER OF THE LD. AO AND PRAYED FOR CONFIRMING THE SAME. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. ON VERIFYING THE PAPER BOOK FILED BY THE ASSESSEE WE FIND THAT THE ASSESSEE HAD ADDED BACK THE AMOUNT OF RS. 30,32,38,082/ - AS ITS INCOME IN THE RETURN OF INCOME FOR THE AY 2 010 - 11. HENCE THE OBSERVATIONS MADE BY THE LD. AO IN HIS ORDER IS INCORRECT AS SUBMITTED BY THE LD. AR . THE LD. DR ALSO COULD NOT CONTROVERT TO THE SUBMISSIONS MADE BY THE LD. AR SUCCESSFULLY. HENCE, WE FIND THAT 4 THE LD. CIT (A) HAS RIGHTLY GRANTED RELIE F TO THE ASSESSEE. THEREFORE, CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NOT FIND IT NECESSARY TO INTERFERE IN THE ORDER OF THE LD. CIT (A). 6. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THE 2 0 TH OCTOBER , 2021. SD/ - SD/ - (S.S. GODARA) ( A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 20 TH OCTOBER , 2021. OKK COPY TO: - 1. M/S. NEW CYBERABAD CITY PROJECTS PVT LTD., N. 83 & 84, PUNNAIAH PLAZA, ROAD NO.2, BANJARA HILLS, HYDERABAD 500 034. 2. INCOME TAX OFFICER, WARD - 16(2), 2 ND FLOOR, B BLOCK, IT TOWERS, AC GUARDS, MASAB TANK, HYDERABAD. 3. THE CIT (A) - 4, HYDERABAD. 4. THE PRINCIPAL COMMISSIONER OF INCOME TAX - 4, HYDERABAD. 5. THE DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. 6. GUARD FILE