Income Tax Officer, Ward-3(2), Hyderabad V. RM Autoparts India Private Limited, Hyderabad

ITA 210/Hyd/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5874 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2021
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 01-06-2021
• Assessment Year: 2013-2014
• Appeal Filed On: 30-01-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Additional evidence
• Section: 271(1)(c); 143(3); 2; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER ITA NO. 2202/HYD/2017 (AY: 2013 - 14) ITA NO. 210/HYD/2018 (AY: 2013 - 14) INCOME TAX OFFICER, WARD - 3(2), HYDERABAD. VS. RM AUTO PARTS INDIA PRIVATE LIMITED, HYDERABAD. PAN: AAGCR 0774 H (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI K.C. DEVDAS REVENUE BY: SHRI SUNIL KUMAR PANDEY, DR DATE OF HEARING: 10/02/2021 DATE OF PRONOUNCEMENT: 27 /04/2021 ORDER PER A. MOHAN ALANKAMONY, AM.: THE CAPTIONED TWO APPEALS ARE FILED BY THE REVENUE AGAINST THE ORDERS OF THE LD. CIT (A) - 3, HYDERABAD IN APPEAL NO. 0525 & 0 530 /ITO - W - 3(2)/HYD/CIT(A) - 3/2016 - 17 , DATED 20/10/2017 & 8/12/2017 RESPECTIVELY FOR THE AY 2013 - 14. 2. THE ASSESSEE HAS RAISED SIX GROUNDS IN ITS QUANTUM APPEAL NO. ITA 2202/H/2017 HOWEVER, THE CRUXES OF THE ISSUES ARE AS FOLLOWS: (I) THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION MADE BY THE LD. AO AMOUNTING TO RS. 3,58,10,000/ - U/S. 68 OF THE 2 ACT RELYING ON THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE WITHOUT CALLING FOR REMAND REPORT FROM THE LD. AO. (II) THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION MADE BY THE LD. AO FOR RS. 34,66,340/ - WHO HAD ESTIMAT ED THE INCOME OF THE ASSESSEE WHICH WAS AGREED BY THE ASSESSEE AT THE TIME OF ASSESSMENT PROCEEDINGS . 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PRIVATE LIMITED C OMPANY ENGAGED IN THE BUSINESS OF TRADING IN AUTO PARTS AND IRON FILED ITS RETURN OF INCOME FOR AY 2013 - 14 ON 30/09/2013 DECLARING LOSS. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE ACT VIDE ORDER DATED 11/3/2016 WHEREIN THE LD. AO MADE THE AFORESTATED ADDITIONS WHICH WAS DELETED BY THE LD. CIT (A) ON APPEAL. 4. GROUND NO.: ADDITION OF RS. 3,58,10,000/ - U/S. 68 OF THE ACT: 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE LD. AO OBSERVED THAT THE ASSESSEE HAD CREDITED AN AMOUNT OF RS. 3,58,10,000/ - IN ITS BOOKS OF ACCOUNTS THE SOURCE OF WHICH WAS NOT EXPLAINED. THEREFORE, THE LD. AO FOLLOWING THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF SUMATI DAYAL VS. CIT RE PORTED IN 125 CTR 124 AND THE DECISION OF THE HONBLE JURISDICTIONAL ANDHRA PRADESH HIGH COURT IN THE CASE OF R.B. MITTAL VS. CIT REPORTED IN 246 ITR 283 ADDED THE AMOUNT OF RS. 3,58,10,000/ - IN THE HANDS OF THE ASSESSEE INVOKING THE 3 PROVISIONS OF SECTION 68 OF THE ACT. ON APPEAL, THE LD. CIT (A) DELETED THE ADDITIONS BY EXAMINING THE CONFIRMATION LETTERS , INCOME TAX RETURNS ETC., OF THE LOAN CREDITORS. 6. AT THE OUTSET, THE LD. DR SUBMITTED BEFORE US THAT THE LD. CIT (A) HAS NOT FOLLOWED RULE 46A(3) OF THE RULES WHEREIN HE WAS DUTY BOUND TO OBTAIN A REMAND REPORT FROM THE LD. AO WITH RESPECT TO THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE AND THEREAFTER DECIDE THE MATTER IN ACCORDANCE WITH LAW AND MERIT. IT WAS THEREFORE PLEADED THAT THE MATTER MAY BE R EMITTED BACK TO THE FILE OF THE LD. AO FOR FRESH CONSIDERATION. THE LD. AR ON THE OTHER HAND ARGUED BY STATING THAT ALL THE EVIDENCE FILED BY THE LD. CIT (A) WAS BEFORE THE LD. AO AND HENCE IT WAS NOT NECESSARY FOR THE LD. CIT (A) TO OBTAIN REMAND REPORT A S THERE WAS NO FRESH EVIDENCE FILED BEFORE THE LD. CIT (A). IT WAS THEREFORE PLEADED THAT THE APPEAL OF THE REVENUE MAY BE DISMISSED. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS AVAILABLE ON RECORD. NEITHER BY READING THE OR DER OF THE LD. AO NOR BY EXAMINING THE PAPER BOOK FILED BY THE ASSESSEE, WE FIND ANY EVIDENCE TO ESTABLISH THAT THE ASSESSEE HAS FILED THE CONFIRMATION STATEMENTS AND OTHER REQUISITE DOCUMENTS BEFORE THE LD. AO WHICH WAS FILED BEFORE THE LD. CIT (A). MOREO VER IT IS EVIDENT FROM THE PAPER - BOOK FILED BEFORE US THAT THE INCOME TAX RETURN OF THE CREDITORS WERE NOT FILED BEFORE THE L D.AO WHICH WAS FILED BEFORE THE LD.CIT(A). FURTHER FROM THE 4 ORDER OF THE LD.CIT(A) WE FIND THAT HE HAS NOT STATED PROPER REASONS WI TH COGENT EVIDENCE TO SUBSTANTIATE THAT THE TRANSACTION S OF CREDITORS ARE GENUINE. MOREOVER , ONLY THE CONFORMATION STATEMENTS OF THE CREDITORS WILL NOT SUFFICE TO ESTABLISH THE GENUINENESS OF THE CREDITORS . THE ONUS IS ON THE ASSESSEE TO PROVE THE GENUINENESS OF THE CREDITORS WITH COGENT EVIDENCE . HOWEVER , THE LD.AO HAS ALSO POWERS TO EXAMINE THE CREDITORS U/S.131 OR U/S.133(6) OF THE ACT WHICH IT APPEARS HE HAS NOT EXERCISED , PROBABLY HE MIGHT NOT HAVE HAD PROPER DETAILS OF THE CREDITORS AT THE TIME OF ASSESSMENT PROCEEDINGS . IN THIS SITUATION, W E ARE OF THE VIEW THAT THE ENTIRE MATTER IS REQUIRED TO BE REVISITED BY THE LD. AO FOR FRESH CONSIDERATION. THEREFORE, IN THE INTEREST OF JUSTICE, WE HEREBY REMIT THIS ISSUE BACK TO THE FILE OF THE LD. AO FOR DE - NOVO CONSIDERATION , GRANTING LIBERTY TO THE ASSESSEE TO FILE ANY FRESH EVIDENCE BEFORE HIM TO SUBSTANTIATE ITS STAND . 8. GROUND NO.2: ADDITION OF RS. 34,82,514/ - ON ESTIMATE BASIS: 9. FROM THE ORDER OF THE L D. AO IT APPEARS THAT HE HAS ESTIMATED THE INCOME OF THE ASSESSEE @ 8% OF THE GROSS RECEIPTS AND ALSO ADDED THE INTEREST INCOME OF RS. 16,174/ - AGGREGATING TO RS. 34,82,514/ - WHICH WAS AGREED BY THE ASSESSEE AT THE TIME OF ASSESSMENT PROCEEDINGS AS PER THE LD.AO . ON APPEAL, THE LD. CIT (A) DELETED THE ADDITION BY STATING THAT THE ADDITION WAS MADE ON HYPOTHETICAL BASIS WITHOUT ANY EVIDENCE. 5 10. AT THE OUTSET, WE FIND THAT NETHER THE LD. AO NOR THE LD. CIT (A) HA S COME OUT WITH A SPEAKING ORDE R ON THE ISSUE. THEREFORE, IN THE INTEREST OF JUSTICE, THIS ISSUE IS ALSO REMITTED BACK TO THE FILE OF THE LD. AO FOR DE - NOVO CONSIDERATION. 11. THE OTHER APPEAL IS IN ITA NO. 210/H/2018 IS WITH RESPECT TO LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT WHICH WA S DELETED BY THE LD.CIT(A) WITH RESPECT TO THE ABOVE MENTIONED ADDITION S MADE BY THE LD.AO . SINCE, WE HAVE REMITTED BACK THE QUANTUM APPEAL BACK TO THE FILE OF THE LD. AO FOR DE - NOVO CONSIDERATION, W E FIND IT APPROPRIATE TO REMIT THE PENALTY APPEAL ALSO BA CK TO THE FILE OF THE LD. AO IN ORDER TO PASS APPROPRIATE ORDER IN ACCORDANCE WITH LAW AND MERIT BASED ON THE ASSESSMENT ORDER PASS ED IN LIEU OF THE APPEAL BEING REMAND ED TO THE FILE OF LD.AO BY THE BENCH . 12. IN THE RESULT, BOTH THE QUANTUM APPEAL AS WELL AS THE PENALTY APPEAL OF THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THE 27 TH APRIL, 2021. SD/ - SD/ - (S.S. GODARA) ( A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 27 TH APRIL, 2021. OKK 6 COPY TO: - 1. M/S. RM AUTOPARTS INDIA PRIVATE LIMITED, 11 - 6 - 27/14 - 15, SUNSIP GODOWN, OPP. IDPL FACTORY, BALA NAGAR, HYDERABAD 500 037. 2. THE INCOME TAX OFFICER, WARD - 3(2), 7 TH FLOOR, SIGNATURE TOWERS, KONDAPUR, HYDERABAD. 3. THE CIT (A) - 3, HYDERABAD. 4. THE PR. CIT - 3, HYDERABAD. 5. THE DR, ITAT, HYDERABAD. 6. GUARD FILE.