Income Tax Office, Ward-1(4), Hyderabad V. Covidh Technologies Limited, Hyderabad

ITA 2080/Hyd/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 8979 (ITAT-HYDERABAD)
• Duration Of Justice: 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 01-10-2018
• Assessment Year: 2014-2015
• Appeal Filed On: 08-12-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S PRAVEENA
• Keywords: Unexplained cash credit; Depreciation
• Section: 143(3); 131

Judgement Text

ITA NOS 2080 AND 282 OF 2018 COVIDH TE CHNOLOGIES LTD HYDERABAD. PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO.2080/HYD/2017 (ASSESSMENT YEAR: 2014-15) INCOME TAX OFFICER WARD 1(4) HYDERABAD VS M/S. COVIDH TECHNOLOGIES LTD, HYDERABAD PAN:AACCL1189J (APPELLANT) (RESPONDENT) ITA NO.282/HYD/2018 (ASSESSMENT YEAR: 2014-15) M/S. COVIDH TECHNOLOGIES LTD, HYDERABAD PAN:AACCL1189J VS INCOME TAX OFFICER WARD 1(4) HYDERABAD (APPELLANT) (RESPONDENT) FOR REVENUE : SMT. S. PRAVEENA, DR FOR ASSESSEE: SHRI K.C. DEVDAS O R D E R PER SMT. P. MADHAVI DEVI, J.M. BOTH ARE CROSS APPEALS FOR THE A.Y 2014-15 AGAINST THE ORDER OF THE CIT (A)-1, HYDERABAD DATED 25.07.2017. 2. IN ASSESSEES APPEAL, THERE IS A DELAY OF 26 DAY S. THE ASSESSEE FILED AN AFFIDAVIT EXPLAINING THE REASONS FOR THE DELAY. BEING SATISFIED WITH THE REASONS AND THAT THE DELAY IS NOT WILLFUL OR DATE OF HEARING: 01.10.2018 DATE OF PRONOUNCEMENT: 12.10.2018 ITA NOS 2080 AND 282 OF 2018 COVIDH TE CHNOLOGIES LTD HYDERABAD. PAGE 2 OF 4 WANTON, WE ARE INCLINED TO CONDONE THE DELAY AND DI SPOSE OF THE APPEAL ON MERITS. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE CO MPANY, ENGAGED IN THE BUSINESS OF PROVIDING TECHNOLOGY SER VICES, FILED ITS RETURN OF INCOME FOR THE A.Y 2014-15 DECLARING A LO SS OF RS.9,69,191/- UNDER THE NORMAL PROVISIONS OF THE I. T. ACT AND A LOSS OF RS.7,96,774 UNDER MAT PROVISIONS. THE RETUR N WAS TAKEN UP FOR SCRUTINY U/S 143(3) OF THE ACT AND DURING TH E COURSE OF THE ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT THE AS SESSEE HAS RECEIVED UNSECURED LOANS FROM ITS DIRECTORS & OTHER S. THE ASSESSEE SUBMITTED THE INFORMATION IN RESPECT OF TW O PARTIES ONLY AND COULD NOT SUBMIT THE INFORMATION WITH REGARD TO ONE PARTY. IN ORDER TO VERIFY THE GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE PARTIES, THE AO ISSUED SUMM ONS U/S 131 OF THE I.T. ACT TO THE SAID PARTIES. HOWEVER, THE S UMMONS ISSUED TO ONE SHRI P. OBUL REDDY RETURNED UNSERVED WITH TH E REMARKS ADDRESSEE LEFT. IN RESPONSE TO THE SUMMONS ISSUED TO SHRI A. PRABHAKAR RAO, THE OTHER PARTY, HIS AUTHORIZED REPR ESENTATIVE ATTENDED AND FURNISHED THE I.T. PARTICULARS. OBSERV ING THAT THE ASSESSEE FAILED TO SUBMIT THE BANK A/C COPIES FOR T HE AMOUNTS RECEIVED FROM THE LOAN CREDITORS AS EVIDENCE, THE A O TREATED THESE LOANS AS UNEXPLAINED CASH CREDITS AND BROUGHT IT TO TAX. THE AO ALSO DISALLOWED THE CLAIM OF DEPRECIATION ON INTANG IBLE ASSETS ON THE GROUND THAT THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE IN SUPPORT OF THE SAME. 4. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFO RE THE CIT (A) WHO ALLOWED THE DEPRECIATION ON THE INTANGI BLE ASSET BUT ITA NOS 2080 AND 282 OF 2018 COVIDH TE CHNOLOGIES LTD HYDERABAD. PAGE 3 OF 4 CONFIRMED THE ADDITION OF UNEXPLAINED CASH CREDITS IN RESPECT OF SHRI P. OBUL REDDY AND SHRI M. SUNIL KUMAR WHILE GR ANTING RELIEF AS FAR AS SHRI A.PRABHAKAR RAO IS CONCERNED. AGGRIE VED BY THE RELIEF GIVEN BY THE CIT (A), THE REVENUE IS IN APPE AL BEFORE US AND AGAINST THE CONFIRMATION OF THE ADDITION, THE ASSES SEE IS IN APPEAL BEFORE US. 5. UPON PERUSAL OF THE MATERIAL ON RECORD AND HEARI NG BOTH THE PARTIES ON THE SAME, WE FIND THAT THE DISA LLOWANCES AND THE CONSEQUENTIAL ADDITIONS WERE MADE BY THE AO ON THE GROUND THAT THE ASSESSEE FAILED TO FURNISH THE RELEVANT IN FORMATION SOUGHT FOR BY THE AO, WHILE BEFORE THE CIT (A), THE ASSESS EE FILED THE RELEVANT MATERIAL, BUT THE CIT (A), HAS ACCEPTED TH E ASSESSEES CONTENTIONS WITHOUT ANY VERIFICATION AND HAS GRANTE D RELIEF TO THE ASSESSEE. WE THEREFORE, FEEL THAT THESE APPEALS NEE D TO BE REMANDED TO THE FILE OF THE AO FOR DE NOVO CONSIDER ATION IN ACCORDANCE WITH LAW. THE AO IS DIRECTED TO CONSIDE R THE EVIDENCE FILED BY THE ASSESSEE BEFORE THE CIT (A) AND TO DEC IDE THE ISSUE IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A FAI R OPPORTUNITY OF HEARING. 6. IN THE RESULT, BOTH THE ASSESSEES AS WELL AS REV ENUES APPEALS ARE TREATED AS ALLOWED FOR STATISTICAL PURP OSES. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH OCTOBER, 2018. SD/- SD/- (S.RIFAUR RAHMAN) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 12 TH OCTOBER, 2018. VINODAN/SPS ITA NOS 2080 AND 282 OF 2018 COVIDH TE CHNOLOGIES LTD HYDERABAD. PAGE 4 OF 4 COPY TO: 1 ITO WARD 1(4) B BLOCK, 7 TH FLOOR, IT TOWERS, AC GUARDS, MASAB TANK, HYDERABAD 2 M/S. COVIDH TECHNOLOGIES LTD, PLOT NO.458, ROAD N O.19, JUBILEE HILLS, HYDERABAD 500033 3 CIT (A)-1 HYDERABAD 4 PR. CIT 1, HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER