Rajesekhar Buggaveeti , Hyderabad V. Dy. Commissioner of Income Tax , Circle-1(2), Hyderabad

ITA 2359/Hyd/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4657 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-B
• Assessment Year: 2009-2010
• Appeal Filed On: 24-12-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 143(3); 40(a)(ia); 201(1); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B , HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO. 2359 /HYD/20 18 ASSESSMENT YEAR: 20 09 - 10 RAJASEKHAR BUGGAVEETI, HYDERABAD. PAN: AEEPB 7610 R VS. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 1(2), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI K.C. DEVDAS REVENUE BY: SRI ROHIT MUJUMDAR, DR DATE OF HEARING: 16/08/2021 DATE OF PRONOUNCEMENT: 13 /09/2021 ORDER PER A. MOHAN ALANKAMONY, AM.: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT (A) - 1, HYDERABAD IN APPEAL NO. 0298/CIT(A) - 1, HYD/2016 - 17/2018 - 19, DATED 5/9/2018 PASSED U/S. 143(3) R.W.S 250(6) OF THE ACT FOR THE AY 2009 - 10. 2. THE ASSESSEE HAS RAISED SIX GROUNDS I N ITS APPEAL HOWEVER THE CRUX OF THE ISSUE IS THAT THE LD. CIT (A) HAS ERRED IN UPHOLDING THE DISALLOWANCE MADE BY THE LD. AO INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT FOR RS. 3,72,87,246/ - . 2 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS BY RUNNING A TRAINING ACADEMY IN MULTIMEDIA , FILED HIS RETURN OF INCOME FOR THE RELEVANT AY ON 6/9/2008. THEREAFTER THE CASE WAS SELECTED FOR SCRUTINY AND ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE ACT ON 30/12 /2011 WHEREIN THE LD. AO MADE DISALLOWANCE U/S. 40(A)(IA) OF THE ACT FOR RS. 2,43,47,134/ - BECAUSE THE ASSESSEE HAD PAID ROYALTY TO M/S. APTECH LIMITED WITHOUT DEDUCTING TAX AT SOURCE. ON APPEAL, THE LD. CIT (A) HAD GRANTED RELIEF TO THE ASSESSEE FOLLOWIN G THE DECISION OF M/S. MERILYN SHIPPING TRANSPORTS IN ITA NO. 477/VI A Z/2008 ORDER DATED 9/4/2012. ON APPEAL BY THE REVENUE, THE TRIBUNAL REMITTED THE MATTER BACK TO THE FILE OF THE LD. AO FOR DE NOVO CONSIDERATION AS THE ASSESSEE HAS CLAIMED THAT M/S. APTE CH LIMITED HAD DISCLOSED THE ROYALTY PAID BY THE ASSESSEE IN ITS RETURN OF INCOME AND PAID TAX ACCORDINGLY. WHEN THE MATTER CROPPED UP BEFORE THE LD. AO ONCE AGAIN THE LD. AO DISMISSED THE APPEAL OF THE ASSESSEE VIDE ORDER DATED 30/3/2017 BY OBSERVING AS UNDER: 4.2. IT IS FURTHER CLARIFIED THAT THE ABOVE PROVISO TO SECTION 201(1) WAS INSERTED BY THE FINANCE ACT, 2012 W.E.F 1/7/2012 AND THEREFORE, THE ABOVE PROVISIONS ARE NOT APPLICABLE TO THE FY 2008 - 09 RELEVANT TO THE AY 2009 - 10. HENCE, AS PER THE PROVISIONS OF SECTION 40(A)(IA) OF THE IT ACT, 1961 AND 201, THE ASSESSEE IS NOT ENTITLED TO IMMUNITY FROM APPLICABILITY OF SECTION 40(A)(IA) FO THE AY 2009 - 10. 5. FURTHER, ON THE ISSUE OF RELIANCE PLACED ON THE CASE OF M/S. MERILYN SHIPPING & TRANSPORTS (ITA NO. 477/VIAZ/2008 DATED 09/04/2021, NO SPECIFIC DIRECTION HAS BEEN GIVEN BY THE HONBLE ITAT. ALSO, THE REVENUE HAS NOT ACCEPTED THE DECISION IN THIS CASE 3 AND APPEAL OF THE REVENUE IS PENDING BEFORE THE HONBLE HIGH COURT. UNDER SUCH CIRCUMSTANCES, THE DECISION IN THE SAID CASE CANNOT BE RELIED UPON. 4. ON APPEAL, THE LD. CIT (A) CONFIRMED THE ORDER OF THE LD. AO BY OBSERVING THAT THE ASSESSEE HAS NOT FURNISHED ANY PROOF TO ESTABLISH THE FACT THAT M/S. APTECH LIMITED HAS ADMITTED THE ROYALTY PAID B Y THE ASSESSEE IN ITS RETURN OF INCOME AGGRIEVED BY WHICH THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL ONCE AGAIN. 5. AT THE OUTSET, THE LD. AR ARGUED BEFORE US BY STATING THAT THE ASSESSEE HAS OBTAINED A LETTER DATED 9/11/2016 FROM M/S. APTECH LIMITED CERTIFYING THAT IT HAS DISCLOSED THE ROYALTY RECEIVED FROM THE ASSESSEE DURING THE FY 2008 - 09 FOR THE AMOUNT OF RS. 3,72,87,246/ - IN ITS RETURN OF INCOME. THE AFOREMENTIONED LETTER IS PRODUCED BEFORE US BY THE LD. AR AT THE TIME OF HEARING. IT WAS THEREFORE PLEADED THAT EITHER THE DISALLOWANCE MADE BY THE LD. AO MADE BE DELETED OR THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE LD. AO FOR FRESH CONSIDERATION. THE LD. DR ON THE OTHER HAND ARGUED IN SUPPORT OF THE ORDERS OF THE LD. REVENUE AUTHORI TIES AND PRAYED FOR CONFIRMING THE SAME. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. ON PERUSING THE LETTER SUBMITTED BY THE ASSESSEE FROM APTECH LIMITED DATED 9/11/2016 WE FIND SOME MERIT IN THE ARGUMENT ADVAN CED BY THE LD. AR. HOWEVER, THE LETTER SUBMITTED BY 4 THE ASSESSEE ALONE WILL NOT ESTABLISH THE FACT THAT M/S. APTECH LIMITED HAVE ACTUALLY ACCOUNTED THE ROYALTY PAID BY THE ASSESSEE IN ITS RETURN OF INCOME. THEREFORE, IN ORDER TO VERIFY THE COMPLETE FACTS OF THE CASE, WE HEREBY REMIT THE MATTER BACK TO THE FILE OF LD. AO FOR FRESH CONSIDERATION AND TO PASS APPROPRIATE ORDER FOLLOWING THE RATIO LAID DOWN BY THE HONBLE APEX COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGES PVT LTD VS. CIT REPORTED IN 293 ITR 226. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THE 13 TH SEPTEMBER , 2021 . SD/ - S D/ - (P. MADHAVI DEVI) ( A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 13 TH SEPTEMBER , 2021 OKK COPY TO: - 1) SRI RAJASEKHAR BUGGAVEETI C/O. M/S. SEKHAR & CO., 133/4, RP ROAD, SECUNDERABAD. 2) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 1(2), HYDERABAD. 3) COMMISSIONER OF INCOME TAX (APPEALS) - 1, HYDERABAD. 4) PRINCIPAL COMMISSIONER OF INCOME TAX - 1, HYDERABAD. 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE