Indra Exhibitors, Sedunderabad, Hyderabad V. ITO, Ward-14(5), Hyderabad, Hyderabad

ITA 265/HYD/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2512 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Assessment Year: 2012-2013
• Appeal Filed On: 17-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; TDS; Set aside
• Section: 142(1); 40(a)(ia); 194C; 201; 13; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. M OH AN ALANKAMONY , ACCOUNTANT MEMBER (THROUGH VIRTUAL CONFERENCE) I.T.A. NO . 265 /HYD/201 7 ASSESSMENT YEAR: 20 12 - 13 INDRA EXHIBITORS, SECUNDERABAD. PAN A A CFI 2592R VS INCOME - TAX OFFICER, WARD 14(5) , HYDERABAD. (APPELLANT) (RESPONDENT) DATE OF HEARING : 23 - 1 1 - 20 20 DATE OF PRONOUNCEMENT : 26 - 1 1 - 20 20 O R D E R PER P. MADHAVI DEVI, J.M. : TH IS IS AN APPEAL OF THE ASSESSEE FOR THE AY 201 2 - 13 AGAINST THE ORDER OF CIT(A) 6 , HYDERABAD , DATED 16/11/ . 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS OF EXHIBITION OF MOVIES AND HAD FILED ITS RETURN OF INCOME FOR THE AY 2012 - 13 ON 28/09/2012 DECLARING INCOME OF RS. 4,29,090/ - . DURING THE ASSESSMENT PROCEEDINGS, THE AO REQUIR ED THE ASSESSEE TO PRODUCE BOOKS OF ACCOUNT, BILLS AND FOR ASSESSEE : SHRI S. RAMA RAO FOR REVENUE : SHRI SUNIL KUMAR PANDEY ITA NO. 265/HY D/201 7 INDRA EXHIBITORS, SECBAD. : - 2 - : VOUCHERS IN SUPPORT OF THE EXPENDITURE DEBITED TO THE P&L ACCOUNT. IN RESPONSE, THE ASSESSEE SUBMITTED SOME DETAILS AND ON PERUSAL OF THE SAME, THE AO OBSERVED THAT THE ASSESSEE HAD MADE PAYMENT TOWAR DS HOARDING RENT OF RS. 1,50,000/ - , BUT, FAILED TO PRODUCE THE EVIDENCE FOR TDS MADE ON SUCH EXPENDITURE. HE, THEREFORE, DISALLOWED THE SAME U/S 40(A)(IA) OF THE ACT. FURTHER, HE ALSO OBSERVED THAT THE ASSESSEE HAD CLAIMED UNSECURED LOANS O F RS. 36,16,123 / - , BUT, T HE ASSESSEE HAS SUBMITTED CONFIRMATION LETTERS OF CREDITORS ONLY TO THE EXTENT OF RS. 27,00,000/ - AND, THEREFORE, BALANCE OF RS. 9,16,123/ - WAS ADDED BACK TO THE INCOME OF THE ASSESSEE AS UNEXPLAINED CASH CREDITS AND BROUGHT TO TAX. FURTHER, WITH REGARD TO SUNDRY CREDITORS OF RS. 34,38,250/ - , THE AO VIDE NOTICE U/S 142(1) DATED 12/01/2015 REQUIRED THE ASSESSEE TO FILE CONFIRMATION LETTERS. AS ASSESSEE FAILED TO SUBMIT ANY CONFIRMATION LETTERS, AO BROUGHT IT TO TAX AS UNEXPLAINED CASH CREDITS. 3. AGAINST THE ORDER OF AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), WHO ALLOWED THE APPEAL PARTLY BY DIRECTING THE AO TO VERIFY WHETHER THE PAYMENTS FOR HOARDING WERE MADE TO DIFFERENT P ERSONS FOR DIFFERENT SITES AND DIRECTED THAT IF IT IS FOU ND TO BE CORRECT, THEN THE ADDITION STANDS DELETED. ITA NO. 265/HY D/201 7 INDRA EXHIBITORS, SECBAD. : - 3 - : 3.1 WITH REGARD TO ADDITION OF RS. 9,16,123/ - , THE CIT(A) DIRECTED THE AO TO VERIFY THE CONTENTIONS OF THE ASSESSEE AND IF IT IS FOUND THAT IT IS BROUGHT FORWARD FROM THE EARLIER YEARS, THE ADDIT ION STANDS DELETED. AS REGARDS THE ADDITION OF RS. 34,38,250/ - , THE CIT(A) FOUND THAT THE ASSESSEE HAS NOT FILED CONFIRMATION LETTERS FROM THE RESPECTIVE CREDITORS, BUT, THERE WAS AN OPENING BALANCE OF RS. 7,61,975/ - WHICH CANNOT BE CONSIDERED FOR ADDITIO N U/S 68 OF THE ACT. HE ACCORDINGLY, GRANTED RELIEF TO THE EXTENT OF RS. 7,61,975/ - AND CONFIRMED THE BALANCE AMOUNT OF RS. 26,76,275/ - . AGAINST THIS ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1) THE ORD ER OF THE LEARNED CIT (A) IS ERRONEOUS TO THE EXTENT IT IS PREJUDICIAL TO THE APPELLANT. 2) THE LEARNED CIT (A) ERRED IN HOLDING THAT THE APPELLANT IS LIABLE TO DEDUCT TAX AT SOURCE ULS 194C OF THE I. T. ACT IN RESPECT OF RS. 1 ,50,000 / - AND THAT THE PROVISIONS U/S 40(A) ( IA) ARE APPLICABLE. 3) THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDITION OF RS.9,16,123/ - WITHOUT CONSIDERING THE DETAILED EXPLANATION SUBMITTED. 4) THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDITION OF RS.26,76 ,275/ - MADE BY THE ASSESSING OFFICER DISBELIEVING THE SUNDRY CREDITORS. THE LEARNED CIT (A) OUGHT TO HAVE SEEN THAT THE APPELLANT HAD THE RUNNING ACCOUNT WITH THE SUNDRY CREDITORS AND THAT THE PAYMENTS WERE MADE THROUGH CHEQUES . 5) ANY OTHER GROUND OR G ROUNDS THAT MAY BE URGED AT THE TIME OF HEARING. 4. GROUND NOS. 1 & 5 ARE GENERAL IN NATURE AND NEED NO ADJUDICATION. ITA NO. 265/HY D/201 7 INDRA EXHIBITORS, SECBAD. : - 4 - : 5. AS REGARDS GROUND NOS. 2 & 3, WE FIND THAT SINCE THE CIT(A) HAS DIRECTED THE AO TO VERIFY AND DELETE THE ADDITION IF THE CONTENTIO NS OF THE ASSESSEE WERE FOUND TO BE CORRECT, THE ASSESSEE CANNOT HAVE ANY GRIEVANCE. IN VIEW OF THE SAME, AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS THESE GROUNDS AND, THEREFORE, GROUNDS NO. 2 & 3 ARE DISMISSED AS NOT PRESSED. 6. AS REGARDS GR OUND NO. 4, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IF GIVEN AN OPPORTUNITY THE ASSESSEE WILL BE IN A POSITION TO PROVE THAT THESE PAYMENTS WERE MADE TO THE PARTIES SUBSEQUENTLY BY WAY OF CHEQUES AND THAT THE CREDITORS ARE GENUINE. HE, THEREFORE, PRAY ED FOR OPPORTUNITY TO PRESENT ITS CASE BEFORE THE AO WITH EVIDENCE. THE LD. DR HOWEVER OBJECT ED TO THE SUBMISSION S OF THE LD. AR. 7. AFTER HEARING BOTH THE PARTIES, WE SET ASIDE THE ISSUE TO THE FILE OF THE AO WITH A DIRECTION TO THE ASSESSEE TO SUBMIT T HE DETAILS OF PAYMENTS BY WAY OF CHEQUES TO THE SUNDRY CREDITORS AND IF SUCH EVIDENCE IS FILED AND PROVED, THEN, THE ADDITION SHALL BE DELETED. ACCORDINGLY, THIS GROUND IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 265/HY D/201 7 INDRA EXHIBITORS, SECBAD. : - 5 - : 8. IN THE RESULT, APPEAL OF THE ASSE SSEE IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER P RONOUNCED IN THE OPEN COURT ON 26 TH NOVEMBER , 20 20 . SD/ - SD/ - ( A . M OH AN ALANKAMONY ) ( P. MADHAVI DEVI ) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDE RABAD, DATED : 26 TH NOVEMBER , 20 20 . KV COPY TO : 1. INDRA EXHIBITORS, C/O SRI S. RAMA RAO, ADVOCATE, FLAT NO. 102, SHRIYAS ELEGANCE, 3 - 6 - 643, STREET NO. 9, HIMAYATNAGAR, HYDERABAD 500 029. 2. IT O, WARD 14(5), IT TOWERS, AC GUARDS, HYDERABAD. 3 . CIT(A PPEALS ) - 6 , HYDERABAD . 4 . PR. CIT 6, HYDERABAD. 5 . D.R. ITAT, HYDERABAD. 6 . GUARD FILE.