Dy. Commissioner of Income Tax , Circle-16(2), Hyderabad V. M/s Palred Technologies Limited , Hyderabad

ITA 2118/Hyd/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 5202 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-A
• Next Hearing Date: 12-01-2021
• Assessment Year: 2014-2015
• Appeal Filed On: 05-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL KUMAR PANDEY
• Keywords: Earning of tax free income; Wrong claim; Revised return; Set aside
• Section: 143(3); 143(1); 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A: HYDERABAD (THROUGH VIRTUAL CONFERENCE) BEFORE S MT. P. MADHAVI DEVI , JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER I TA NO. 2118/HYD/2018 ASSESSMENT YEAR: 2014 - 15 DY. COMMISSIONER OF INCOME - TAX, CIRCLE 16(2), HYDERABAD. VS. M/S PALRED TECHNOLOGIES LTD., HYDERABAD. PAN AAACF 4464A (APPELLANT) (RESPONDENT REVENUE BY: SHRI SUNIL KUMAR PANDEY ASSESSEE BY: SHRI RAVI BHARADWAJ DATE OF HEARING: 12 /01/2021 DATE OF PRONOUNCEMENT: 29 /01/2021 O R D E R PER LAXMI PRASAD SAHU, A .M. : T H IS IS AN APPEAL FILED BY THE REVENUE DIRECTED AG AINST THE ORDER OF CIT(A) 4 , HYDERABAD, DATED 02 / 08 / 201 8 RELATING TO AY 20 1 4 - 1 5 ON THE FOLLOWING GROUNDS OF APPEAL: 1. TD, CIT(A) ERRED IN DI RECTING THE AO TO VERIFY AND ALLOW DEDUCTION CLAIMED BY THE ASSESSEE FOR DIVIDEND INCOME IN THE ABSENCE OF ANY CLAIM MADE BY THE ASSESSEE IN THE ORIGINAL RETURN OF INCOME AND IN THE ITA NO. 2118 /HYD/1 8 M/S PALRED TECHNOLOGIES LTD., HYD. : - 2 - : ABSENCE OF ANY REVISED RETURN FILED BY THE ASSESSEE. RS. 1,16,86,861/ - 2. LD. , CIT(A) ERRED IN DELETING THE ADDITION MADE U/S 36(I)(V) OF THE ACT N RESPECT OF BELATED PAYMENTS OF EMPLOYEES' CONTRIBUTION TOWARDS PROVIDENT FUND - RS.7165/ - 3 L D. CLT(A) ERRED IN NOT TAKING INTO COGNIZANCE HON'BLE SUPREME COURT DECISION IN TH E CASE OF GOETZ INDIA VS CIT. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF DRUGS AND PHARMACEUTICALS AND FILED ITS RETURN OF INCOME FOR THE AY 2014 - 15 ON 30/11/2014 DECLARING TOTAL INCOME OF RS. 1 ,08,37,22,360/ - , WHICH WAS PROCESSED U/S 143(1) OF THE IT ACT, 1961. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND STATUTORY NOTICES WERE ISSUED TO THE ASSESSEE, AGAINST WHICH, THE ASSESSEE FURNISHED THE REQUIRED INFORMATION AS CALLED FOR. 2.1 THE A O COMPLETED THE ASSESSMENT U/S 143(3) ON 30/12/2016 DETERMINING THE ASSESSED INCOME OF THE ASSESSEE AT RS. 109,02,65,940/ - BY MAKING THE FOLLOWING ADDITIONS: 1. ADDITION OF RS. 62,96,944/ - TOWARDS DISALLOWANCE U/S 40A(2)(B) ITA NO. 2118 /HYD/1 8 M/S PALRED TECHNOLOGIES LTD., HYD. : - 3 - : 2. ADDITION OF RS. 2,25,556/ - T OWARDS DISALLOWANCE OF UNVOUCHED EXPENSES, AND 3. DISALLOWANCE OF RS. 21,080/ - U/S 36(1)(VA) OF THE ACT. 3. WHEN THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), THE CIT(A) DELETED THE DISALLOWANCE U/S 40A(2)(B) AND AS REGARDS THE ADDITION U/S 36(1)(V A), THE CIT(A) DIRECTED THE AO TO VERIFY THE DATE OF PAYMENT OF THE AMOUNTS AND ALLOW ACCORDINGLY. 3.1 BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT IT ERRONEOUSLY COMPUTED THE INCOME FROM BUSINESS OR PROFESSION OR BUSINESS INCLUDING DIVIDEND INCOME AND TO THIS EFFECT, THE ASSESSEE FILED REVISED COMPUTATION OF TOTAL INCOME BEFORE THE AO VIDE ITS SUBMISSION DATED NOVEMBER, 22, 2016, BUT, THE AO DID NOT MENTION ANY THING IN THIS REGARD IN THE FINAL ASSESSMENT ORDER. 3.2 AFTER CONSIDERING THE SAID SUBMISSION, THE CIT(A) DIRECTED THE AO TO VERIFY THE COMPUTATION OF INCOME OF THE ASSESSEE WHEREIN THE DISCLOSED DIVIDEND WAS ADDED BACK, AS EXPLAINED BY THE ASSESSEE AND ALLOW THE AMOUNT ACCORDINGLY SINCE THIS ISSUE WAS NOT THERE IN THE ASSESSMENT ORDER. 4. AGGRIE VED BY THE ORDER OF THE CIT(A), THE REVENUE IS IN APPEAL BEFORE US. ITA NO. 2118 /HYD/1 8 M/S PALRED TECHNOLOGIES LTD., HYD. : - 4 - : 5. AS REGARDS GROUND NO. 1 & 3 REGARDING ALLOWING OF DIVIDEND INCOME OF RS. 1,16,86,861/ - , IT IS OBSERVED THAT THE ASSESSEE ERRONEOUSLY COMPUTED ITS INCOME INCLUDING DIVIDEND INCOME, WHI CH IS EXEMPT AND RECTIFIED ITS MISTAKE BY FILING REVISED RETURN OF INCOME, WHICH WAS NOT CONSIDERED AND MENTIONED BY THE AO IN THE ASSESSMENT ORDER. WHEN THE ASSESSEE TOOK UP THE MATTER TO THE CIT(A), THE CIT(A) DIRECTED THE AO TO VERIFY THE COMPUTATION OF INCOME AND ALLOW THE AMOUNT ACCORDINGLY, AGAINST WHICH, THE REVENUE IS IN APPEAL BEFORE US. 6. BEFORE US, THE LD. DR SUBMITTED THAT THE CIT(A) WAS NOT JUSTIFIED IN DIRECTING THE AO TO ALLOW THE CLAIM OF THE ASSESSEE IN AS MUCH AS THE ASSESSEE DID NOT CL AIM THE SAME IN THE RETURN OF INCOME AS WELL AS IN THE REVISED RETURN OF INCOME. HE, THEREFORE, PRAYED THAT THE ORDER OF THE CIT(A) MAY BE SET ASIDE AND THAT OF THE AO BE RESTORED. 7. THE LD. AR, ON THE OTHER HAND, RELIED UPON THE ORDER OF THE CIT(A). 8. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD AS WELL AS THE ORDERS OF THE REVENUE AUTHORITIES., IT IS OBSERVED THAT THE ASSESSEE HAS ERRONEOUSLY ADDED THE EXEMPT INCOME OF RS. 1,16,86,861/ - IN THE COMPUTATION OF ITS INCOME FILED AL ONG WITH ITS RETURN OF INCOME, THE MATTER OF WHICH WAS TAKEN UP TO AO, WHO DID ITA NO. 2118 /HYD/1 8 M/S PALRED TECHNOLOGIES LTD., HYD. : - 5 - : NOT CONSIDER THE SAME AND DID NOT MENTION IN THE ASSESSMENT ORDER. WHEN THE MATTER WAS TAKEN UP BEFORE THE CIT(A), THE CIT(A) DIRECTED THE AO TO VERIFY THE COMPUTATION OF INCOME AND ALLOW THE CLAIM OF THE ASSESSEE. WE ARE OF THE VIEW THAT IT IS THE DUTY OF THE AO TO CALCULATE THE TAX IN ACCORDANCE WITH LAW, EVEN THOUGH, THE ASSESSEE HAS MADE A WRONG CLAIM, WHICH IS NOT REQUIRED TO BE TAXED AS PER INCOME TAX. THE CIT(A) HAS RIGHTL Y DIRECTED THE AO TO VERIFY THE COMPUTATION OF INCOME OF THE ASSESSEE AND ALLOW THE EXEMPT INCOME ACCORDINGLY, WHEN THE ASSESSEE BROUGHT THE WRONG CLAIM MADE BY IT IN THE COMPUTATION. THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE IN THE DECISION OF THE CIT(A) AND UPHOLDING THE ACTION OF THE CIT(A) ON THIS ISSUE, WE DISMISS THE GROUND RAISED BY THE REVENUE IN THIS REGARD. ACCORDINGLY, GROUND NO. 1 & 3 ARE DISMISSED. 9. AS REGARDS GROUND NO. 2 REGARDING DELETION OF ADDITION MADE U/S 36(1)(V A ) RWS 2(24)(X) BY THE CIT(A), THE CIT(A) DIRECTED THE AO TO VERIFY THE DATE OF PAYMENT S MADE BY THE ASSESSEE TOWARDS THE EMPLOYEES CONTRIBUTION TO PF AND ALLOW ACCORDINGLY. THEREFORE, THE GRIEVANCE OF THE REVENUE IN THE GROUND THAT THE CIT(A) ERRED IN DELET ING THE ADDITION U/S 36(1)(V A ) IS WRONG, AS THE CIT(A) DIRECTED THE AO TO VERIFY THE DATE OF PAYMENTS MADE BY THE ASSESSEE TOWARDS EMPLOYEES CONTRIBUTION TO PF AND ALLOW ACCORDINGLY. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE DIRECTION OF THE CIT(A) A ND ACCORDINGLY, UPHOLDING THE ORDER OF CIT(A) ITA NO. 2118 /HYD/1 8 M/S PALRED TECHNOLOGIES LTD., HYD. : - 6 - : ON THIS ISSUE, WE DISMISS THE GROUND NO. 2 RAISED BY THE REVENUE IN THIS REGARD. 10. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 29 TH JANUARY, 2021 SD/ - SD/ - ( P. MADHAVI DEVI ) ( LAXMI PRASAD SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDE RABAD, DATED : 29 TH JANUARY, 20 2 1 K V C OPY TO : 1 DCIT, CIRCLE 16(2), 2 ND FLOOR, B BLOCK, IT TOWERS, AC GUARDS, MASAB TANK, HYDERABAD. 2 M/S PALRED TECHNOLOGIES LTD., PLOT NO. 2, 8 - 2 - 703/2/B, ROAD NO. 34, BANJARA HILLS, HYDERABAD 500 034. 3 CIT(A) 4 , HYDERABAD. 4 PR. CIT - 4 , HYDERABAD 5 ITAT, DR, HYDERABAD. 6 GUARD FILE. S.NO. DETAILS DATE 1 DRAFT DICTATED ON 2 DRAFT PLACED BEFORE AUTHOR 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 5 APPROVED DRAFT COMES TO THE SR. PS/PS 6 KEPT FOR PRONOUNCEMENT 7 FILE SENT TO BENCH CLERK ITA NO. 2118 /HYD/1 8 M/S PALRED TECHNOLOGIES LTD., HYD. : - 7 - : 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER