Tejdeep Engineering Enterprises Pvt.Ltd, Hyderabad V. ITO, W-2(2), Hyderabad

ITA 252/HYD/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53598 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 17-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDRA SEKHARAM
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Unexplained expenditure; Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B , HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO.252/HYD/2011 : ASSESSMENT YEAR 2007-0 8 M/S. TEJDEEP ENGINEERING ENTERPRISES PVT. LTD., HYDERABAD ( PAN AACCT 2270 J ) V/S. INCOME - TAX OFFICER, WARD-2(2), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P.MURALI MOHAN RAO RESPONDENT BY : SHRI M.S.CHANDRA SEKHARAM O R D E R PER G.C.GUPTA, VICE PRESIDENT: THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YE AR 2007-08 IS DIRECTED AGAINST THE ORDER OF THE COMMIS SIONER OF INCOME- TAX(APPEALS). 2. GROUNDS OF THE ASSESSEE IN THIS APPEAL ARE AS U NDER- 1. THE INCOME TAX RETURN FOR THE ASSESSMENT YEAR 2 007-08 HAS ALREADY BEEN FURNISHED BY THE ASSESSEE AND THE TOTAL INCOME AMOUNTING TO RS.3,83,670/- WAS SUBMITTED WHEREAS AS PER THE ASSESSMENT ORDER A SUM OF RS.2,03,14,044/- HAS BEEN ADDED TO THE RETURN AND T HE TOTAL INCOME CALCULATED TO RS.2,07,00,414/- WHICH I S NOT CORRECT AND NOT JUSTIFIED AND BAD IN LAW. 2. DISALLOWANCE OF DEPRECIATION AMOUNTING TO R S.12,97,527/- THE HONBLE COMMISSIONER OF INCOM E TAX APPEALS-III HAS ERRED IN CONFIRMING THE ORDER OF THE ASSESSING OFFI CER WHEREIN THE EXPENSES CLAIM ED BY THE ASSESSEE U/S. 32 TOWARDS DEPRECIATION AMOUNTING TO RS.12,97,527/- HA S BEEN DISALLOWED AND ADDED TO THE TOTAL INCOME OF TH E ASSESSEE WHICH IS NOT CORRECT, NOT JUSTIFIED AND BA D IN LAW. ITA NO.252/H/2011 M/S. TEJDEEP ENGINEERING ENTERPRISES PVT. LTD., HYD 2 3. WE WOULD LIKE TO SUBMIT THAT THE ASSESSEE COM PANY HAS ALREADY FURNISHED COPIES OF INVOICES AND OTHER RELE VANT EVIDENCES TO THE ASSESSING OFFICER TO SUPPORT ITS C LAIM AT THE TIME OF ASSESSMENT. HOWEVER, THE A.O. HAS NOT CONSIDERED THE EXPLANATION GIVEN BY THE ASSESSEE CO MPANY AND DISALLOWED DEPRECIATION CLAIMED BY THE ASSESSEE COMPANY AND THE SAME HAS BEEN CONFIRMED BY CIT APPE ALS- III WHICH IS NOT CORRECT AND NOT JUSTIFIED. HENCE, THE DISALLOWANCE OF DEPRECIATION OF RS.12,97,527 MAY PL EASE BE DELETED. 4. ADDITION OF PURCHASES AMOUNTING TO RS.1,90,1 6,517/- THE HONBLE COMMISSIONER OF INCOME-TAX APPEALS-III HAS ERRED WHILE CONFIRMING THE ORDER OF THE ASSESSING O FFICER WHEREIN THE A.O. HAS DISALLOWED THE EXPENSES CLAIME D BY THE ASSESSEE TOWARDS PURCHASES AMOUNTING TO RS.1,90,16,517 AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE WHICH IS NOT CORRECT , NOT JUSTIFIED AND BAD IN LAW. 5. WE WOULD LIKE TO SUBMIT THAT THE ASSESSEE CO MPANY HAS ALREADY FURNISHED ALL THE BOOKS OF ACCOUNTS AND LED GER ACCOUNT COPIES TO THE ASSESSING OFFICER FOR VERIFIC ATION AT THE TIME OF ASSESSMENT . THE ASSESSEE COMPANY HAS A LREADY FURNISHED THE COPIES OF CONFIRMATION LETTERS FROM A LL THE SUPPLIERS. HOWEVER, THE A.O. HAS NOT CONSIDERED TH E SAME AND DISALLOWED AN AMOUNT OF RS.1,90,16,517/- AS UNEXPLAINED EXPENDITURE AND THE DISALLOWANCE HAS BE EN CONFIRMED BY CIT, APPEALS_III WHICH IS NOT CORRECT AND NOT JUSTIFIED. HENCE, THE DISALLOWANCE MAY PLEASE BE D ELETED. 3. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS PURCHASED COMPUTERS DURING THE YEAR. H OWEVER, NECESSARY EVIDENCE COULD NOT BE FILED BEFORE THE AS SESSING OFFICER DUE TO CIRCUMSTANCES BEYOND THE CONTROL OF THE ASSE SSEE. LIKEWISE, THE CLAIM OF PURCHASES OF RS.1.90 CRORES ALSO COULD NOT BE EVIDENCED BY FURNISHING CONFIRMATION FROM THE PARTIES, DUE TO ADVERSE CIRCUMSTANCES OF THE ASSESSEE. HE SUBMITTED THAT E NTRIES ARE GENUINE AND THE MATTER MAY RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR PROVIDING REASONABLE OPPORTUNITY TO THE ASSESSEE. ITA NO.252/H/2011 M/S. TEJDEEP ENGINEERING ENTERPRISES PVT. LTD., HYD 3 4. LEARNED DEPARTMENTAL REPRESENTATIVE HAS OPPOSE D THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE HE SUBMITTED THAT NECESSARY EVIDENCE WAS NOT FILED BEFORE THE AS SESSING OFFICER OR EVEN BEFORE THE CIT(A) AND THEREFORE, THERE WAS NO JUSTIFICATION FOR GIVING ANY FRESH OPPORTUNITY TO THE ASSESSEE BY SE TTING ASIDE THE ASSESSMENT AND RESTORING THE MATTER TO THE FILE OF THE ASSESSING OFFICER. HE RELIED ON THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A). WE FIND THAT THE ASSESSEE IS DERIVING INCOME FROM TRADING I N STEEL. IT HAS CLAIMED TO HAVE PURCHASED COMPUTERS DURING THE RELE VANT PERIOD AND HAS CLAIMED DEPRECIATION THEREON. IT HAS ALSO SHOW N PURCHASES TO THE EXTENT OF RS.1.90 CRORES, FOR WHICH IT HAS FILED CO PIES OF CONFIRMATION LETTERS FROM THE SUPPLIERS. THE CIT(A) HAS OBSERVE D THAT THE PLEA OF THE ASSESSEE THAT IT HAS FILED CONFIRMATION LETTERS FROM THE PARTIES FOR PURCHASES TO THE EXTENT OF RS.1.90 CRORES WAS NOT C ORRECT. WE FIND THAT THE NAMES AND ADDRESSES OF THE PARTIES FROM WH OM THE COMPUTERS WERE CLAIMED TO HAVE BEEN PURCHASED AND THE NAMES AND ADDRESSES OF THE PARTIES FROM WHOM PURCHASES OF RS.1.90 CRORES HAVE BEEN CLAIMED TO HAVE BEEN MADE BY THE ASSESSEE , WERE FURNISHED BEFORE THE ASSESSING OFFICER. THE ASSESSI NG OFFICER HAS NOT MADE FURTHER ENQUIRIES FROM THE FROM THESE SUPPLI ERS AND PROCEEDED TO ADD THE ENTIRE AMOUNTS IN QUESTION, AS INCOME I N THE HANDS OF THE ASSESSEE. THIS APPROACH OF THE REVENUE AUTHORITIES IS NOT SUSTAINABLE. IN THESE FACTS, WE CONSIDER IT JUSTIFIED TO SET ASI DE THE ISSUES INVOLVED IN THIS APPEAL TO THE FILE OF THE CIT(A) WITH A DIR ECTION TO PASS A DE NOVO APPELLATE ORDER IN ACCORDANCE WITH LAW, AFTER ALLOWING ITA NO.252/H/2011 M/S. TEJDEEP ENGINEERING ENTERPRISES PVT. LTD., HYD 4 REASONABLE OPPORTUNITY OF HEARING TO BOTH THE PARTI ES AND AFTER CALLING FOR A REMAND REPORT FROM THE ASSESSING OFFICER, WHO SHOULD EXAMINE THE ISSUE AFRESH. THE ASSESSEE SHALL BE AT LIBERTY TO FILE ANY EVIDENCE IN SUPPORT OF ITS CASE BEFORE THE REVENUE AUTHORITI ES. WE DIRECT ACCORDINGLY. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FO R STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 9.9.2011 SD/- SD/- (CHANDRA POOJARI) ( G. C. G UPTA) ACCOUNTANT MEMBER VICE PRESIBDENT DATED 9 TH SEPTEMBER, 2011 COPY FORWARDED TO: 1 . M/S. TEJDEEP ENGINEERING ENTERPRISES PVT. LTD., C/O. M/S.P.MURALI & CO., CHARTERED ACCOUNTANTS, 6-3-6755/2/3, 1ST FLOOR, SOMAJIGUDA, HYDERABAD-82 2. INCOME - TAX OFFICER, WARD - 2(2), HYDERABAD 3. COMMISSIONER OF INCOME - TAX(APPEALS) - III HYDERABAD 4. COMMISSIONER OF INCOME - TAX II HYDERABAD 5. THE D.R., ITAT, HYDERABAD. B.V.S