M/s. Hyderabad Food Products P. Ltd, Hyderabad V. The DCIT Circle - 2(2), Hyderabad

ITA 30/HYD/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3190 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 15-06-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 11-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H PHANI RAJU
• Assessee Lawyers: S RAMA RAO
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI AKBER BASHA, ACCOUNTANT MEMEBR ITA NO. 30/HYD/2010 ASSESSMENT YEAR 2006-2007 M/S. HYDERABAD FOOD PRODUCTS PVT. LTD., C/O. M/S. S. RAMA RAO, ADVOCATE, FLAT NO. 102, SHRIYA'S ELEGANCE, 3-6-643, ST. NO. 9, HIMAYATNAGAR, HYDERABAD-29 PAN: AAACH5510M VS. DY. CIT CIRCLE 2(2), HYDERABAD APPELLANT BY: MR. S. RAMA RAO RESPONDENT BY: MR. H. PHANI RAJU O R D E R PER N.R.S. GANESAN, JM: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A)-III, HYDERABAD DATED 27.11.2009 PERTAINI NG TO ASSESSMENT YEAR 2006-07. 2. SHRI S. RAMA RAO, THE LEARNED COUNSEL FOR THE ASSES SEE SUBMITTED THAT THE ONLY ISSUE ARISING FOR CONSIDERA TION IS THE ADDITION OF RS.12 LAKHS U/S. 68 OF THE INCOME-TAX A CT, 1961. THE LEARNED COUNSEL SUBMITTED THAT THE ASSESSEE FIL ED ADDITIONAL EVIDENCE TO SHOW THAT THE ENTIRE FUNDS WERE INTRODU CED BY THE SHAREHOLDERS IN THE FORM OF SHARE CAPITAL BEFORE TH E CIT(A). THE CIT(A), HOWEVER, DID NOT ADMIT THE ADDITIONAL EVIDE NCE FILED BY THE ASSESSEE ON THE GROUND THAT THE ASSESSING OFFIC ER HAS GIVEN SUFFICIENT OPPORTUNITIES TO THE ASSESSEE. ACCORDIN GLY, THE CIT(A) REJECTED THE APPLICATION OF THE ASSESSEE FOR ADMITT ING THE ADDITIONAL EVIDENCE. THE LEARNED COUNSEL FOR THE A SSESSEE ITA NO. 30/HYD/2010 M/S. HYDERABAD FOOD PRODUCTS PVT. LTD. ============================= 2 FURTHER SUBMITTED THAT WHEN THE ASSESSEE FILED THE ADDITIONAL EVIDENCE TO EXPLAIN THAT THE SHARE CAPITAL WAS INTR ODUCED BY THE RESPECTIVE SHAREHOLDER, IT HAS TO BE EXAMINED BY TH E LOWER AUTHORITY BEFORE TAKING ANY DECISION ON MERIT. THE REFORE, ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE, THE CIT(A) HAS COMMITTED AN ERROR IN NOT ADMITTING THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE. 3. ON THE CONTRARY, SHRI H. PHANI RAJU, THE LEARNED DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASS ESSING OFFICER HAS GIVEN AMPLE OPPORTUNITIES TO THE ASSESS EE TO EXPLAIN THE SHARE CAPITAL INTRODUCED BY THE ASSESSEE. IN S PITE OF SEVERAL OPPORTUNITIES, THE ASSESSEE COULD NOT FURNISH ANY D ETAILS TO EXPLAIN THE SHARE CAPITAL. THEREFORE, THE ASSESSEE AT THIS STAGE CANNOT PRODUCE ANY EVIDENCE IN THE FORM OF ADDITION AL EVIDENCE. ACCORDINGLY, THE LEARNED DEPARTMENTAL REPRESENTATIV E SUBMITTED THAT THE CIT(A) HAS RIGHTLY CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL ON RECORD. AS SEEN F ROM THE ORDER OF THE CIT(A), THE ASSESSEE HAS FILED AN APPL ICATION FOR ADMISSION OF ADDITIONAL EVIDENCE WITH REGARD TO SHA RE CAPITAL INTRODUCED BY THE ASSESSEE COMPANY. THE CIT(A) HAS REJECTED THE APPLICATION OF THE ASSESSEE ON THE GROUND THAT THE ASSESSING OFFICER HAS GIVEN SUFFICIENT OPPORTUNITIES TO THE A SSESSEE. INCOME-TAX ACT EMPOWERS THE LOWER AUTHORITIES TO CO MPUTE THE TAXABLE INCOME IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. TAX HAS TO BE COLLECTED ON THE BASIS OF THE INCOME- TAX ACT. IN OTHER WORDS, TAX HAS TO BE COLLECTED UNDER THE AUTH ORITY OF LAW. THEREFORE, WHEN THE ASSESSEE CLAIMS THAT THEY HAVE SUFFICIENT MATERIAL TO SUPPORT THE SHARE CAPITAL INTRODUCED BY THE ITA NO. 30/HYD/2010 M/S. HYDERABAD FOOD PRODUCTS PVT. LTD. ============================= 3 RESPECTIVE SHAREHOLDER, IN OUR OPINION, THERE IS NO THING WRONG IN EXAMINING THE ADDITIONAL EVIDENCE FILED BY THE ASSE SSEE ON MERIT. THE REJECTION OF THE APPLICATION FILED BY T HE ASSESSEE FOR ADMITTING THE ADDITIONAL EVIDENCE MAY PUT THE ASSES SEE IN DIFFICULT SITUATION ESPECIALLY WHEN THE ASSESSEE CL AIMS THAT IT HAS SUFFICIENT EVIDENCE TO SUPPORT ITS CASE. IN OU R OPINION, GIVING AN OPPORTUNITY TO THE ASSESSEE TO PRODUCE TH E MATERIAL IN THE FORM OF ADDITIONAL EVIDENCE MAY NOT PREJUDICE T HE INTEREST OF THE REVENUE IN ANY WAY. IN OUR OPINION, GIVING A O PPORTUNITY TO THE ASSESSEE TO PRODUCE THE ADDITIONAL EVIDENCE WOU LD DEFINITELY PROMOTE THE CAUSE OF JUSTICE. THEREFORE, IN OUR OP INION, THE CIT(A) OUGHT TO HAVE ADMITTED THE ADDITIONAL EVIDEN CE AND EXAMINED THE SAME ON MERIT IN ACCORDANCE WITH LAW. 5. TAX HAS TO BE COLLECTED IN ACCORDANCE WITH LAW. TECHNICALITIES CANNOT STAND IN THE WAY OF COMPUTING THE RIGHT INCOME OF THE ASSESSEE. THEREFORE, IN OUR VIEW, TH E CIT(A) OUGHT TO HAVE ADMITTED THE ADDITIONAL EVIDENCE FILED BY T HE ASSESSEE. SINCE THE LOWER AUTHORITY DID NOT EXAMINE THE ADDIT IONAL EVIDENCE FILED BY THE ASSESSEE, THE MATTER NEEDS TO BE RECONSIDERED BY THE ASSESSING OFFICER. ACCORDINGLY , WE ADMIT THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE BEFOR E THE CIT(A) AND REMAND BACK THE MATTER TO THE FILE OF THE ASSES SING OFFICER. THE ASSESSING OFFICER SHALL RECONSIDER THE ISSUE AF RESH IN THE LIGHT OF THE ADDITIONAL EVIDENCE FILED BY THE ASSES SEE BEFORE THE CIT(A) AND THEREAFTER DECIDE THE MATTER IN ACCORDAN CE WITH LAW. WE MAKE IT CLEAR THAT WE ARE NOT EXPRESSING ANY OPI NION ON MERIT. IT IS FOR THE ASSESSING OFFICER TO EXAMINE THE ADDITIONAL EVIDENCE AND DECIDE THE ISSUE IN ACCORDANCE WITH LA W WITHOUT BEING INFLUENCED BY ANY OF THE OBSERVATION MADE EIT HER BY THIS TRIBUNAL IN THIS ORDER OR BY THE CIT(A). ITA NO. 30/HYD/2010 M/S. HYDERABAD FOOD PRODUCTS PVT. LTD. ============================= 4 6. WITH THE ABOVE OBSERVATIONS, THE APPEAL OF THE ASSE SSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15TH JUNE, 2010. SD/-/- (AKBER BASHA) ACCOUNTANT MEMBER SD/- (N.R.S. GANESAN) JUDICIAL MEMBER TPRAO HYDERABAD, DATED 15TH JUNE, 2010 COPY FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)-III, HYDERABAD 4 THE CIT-II, HYDERABAD 5. THE DR A BENCH, HYDERABAD