Global Energy Consulting Engineers Pvt. Ltd, Secunderabad V. DCIT, Circle - 2(3), Hyderabad

ITA 301/HYD/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6017 (ITAT-HYDERABAD)
• Duration Of Justice: 4 year(s) 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 03-02-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 28-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B KURMI NAIDU
• Assessee Lawyers: M V ANIL KUMAR
• Keywords: Reasonable cause
• Section: 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA.NO.301/HYD/2011 ASSESSMENT YEAR 2005-2006 GLOBAL ENERGY CONSULTING ENGINEERS P. LTD., HYDERABAD. PAN AABCG4974F VS. THE DCIT, CIRCLE-2(3) HYDERABAD. (APP ELL ANT) (RESPONDENT) FOR ASSESSEE : MR. M.V. ANIL KUMAR FOR REVENUE : MR. B. KURMI NAIDU DATE OF HEARING : 03 .0 2 .2016 DATE OF PRONOUNCEMENT : 23 .0 2 .2016 ORDER PER SMT. P. MADHAVI DEVI, J.M. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-III DATED 22.11.2010 FOR THE A. Y. 2005- 06. THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD. C IT(A) HAS ERRED IN (I) CONFIRMING THE UNSECURED LOANS OF RS. 20 LAKHS ALLEGEDLY RECEIVED FROM FOUR PERSONS, IN SPITE OF THE FACT THAT THE LENDERS HAVE CONFIRMED HAVING GIVEN THE LETTERS AND ALSO THAT THE SAME HAVE BEEN RETURNED AS ON THE DATE OF ENQUIRY BY THE DEPARTMENT AND (II) CONFIRMING DISALLOWANCE OF 10% OF THE ENTIRE DEVELOPMENT EXPENSES. 2 ITA.NO.301/HYD/2011 GLOBAL ENERGY CONSULTING ENGINEERS P. LTD., HYDERABAD. 2. AT THE OUTSET, IT IS NOTICED THAT THE APPEAL IS BARRED BY LIMITATION BY A PERIOD OF 36 DAYS. THE AS SESSEE HAS FILED AN APPLICATION ALONG WITH THE AFFIDAVIT O F THE DIRECTOR OF THE ASSESSEE COMPANY FOR CONDONATION OF THE DELAY. IN THE AFFIDAVIT, IT IS MENTIONED THAT THE O RDER OF THE COMMISSIONER DATED 22.11.2010 WAS RECEIVED BY THE T AX CONSULTANT OF THE ASSESSEE ON 24.11.2010 WHO PREPAR ED THE APPEAL AND HANDED IT OVER TO THE ASSESSEES ACCOUNTANT IN THE SECOND WEEK OF JANUARY, 2011. IT WAS SUBMITTED THAT THE ACCOUNTANT WAS DIRECTED TO TAKE THE SIGNATURES AND SEND IT TO THE TAX CONSULTANT FOR FI LING OF THE APPEAL BEFORE THE TRIBUNAL. BUT THE SAID EMPLOY EE LEFT THE ORGANIZATION WITHOUT LEAVING ANY INFORMATION AS TO FILING OF THE APPEAL. IT WAS ONLY ON RECEIPT OF NOT ICE FOR COLLECTION OF TAX DEMAND THAT THE ASSESSEE CAME TO KNOW THAT THE TAX APPEAL HAS NOT BEEN FILED AND THEREFOR E, IMMEDIATELY THEREAFTER, THE ASSESSEE FILED THE APPE AL ON 28.02.2011 WHICH HAS RESULTED IN DELAY OF 36 DAYS. 3. THE LD. D.R. OPPOSED THE CONDONATION OF THE DELAY. 4. HAVING GONE THROUGH THE CONTENTIONS OF THE ASSESSEE IN THE AFFIDAVIT, WE ARE SATISFIED THAT TH E DELAY IS DUE TO REASONABLE CAUSE BEYOND THE CONTROL OF THE ASSESSEE AND THEREFORE, WE ARE INCLINED TO CONDONE THE DELAY. 3 ITA.NO.301/HYD/2011 GLOBAL ENERGY CONSULTING ENGINEERS P. LTD., HYDERABAD. 5. AS REGARDS THE MERITS OF THE APPEAL IS CONCERNED, WE FIND THAT THE ASSESSEE COMPANY HAD FI LED ITS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YE AR ON 30.10.2005 DECLARING TAXABLE INCOME OF RS.9,36,640. THE ASSESSEE IS A COMPANY WHICH DERIVES INCOME FROM SOFTWARE DEVELOPMENT AND CONSULTANCY SERVICES. VARI OUS NOTICES WERE ISSUED TO THE ASSESSEE UNDER SECTION 1 43(2) OF THE I.T. ACT TO SUBMIT THE DETAILS REQUIRED BY T HE A.O. FOR THE ASSESSMENT OF THE ASSESSEES INCOME. THERE WAS NO RESPONSE FROM THE ASSESSEE AND THEREFORE, THE A.O. COMPLETED THE ASSESSMENT TO THE BEST OF HIS JUDGMEN T UNDER SECTION 144 OF THE I.T. ACT. THE ASSESSEE PRE FERRED AN APPEAL BEFORE THE LD. CIT(A) ALONG WITH THE NECE SSARY EVIDENCE. THE A.O. HAD MADE ADDITION UNDER SECTION 68 OF THE I.T. ACT AGAINST WHICH, ASSESSEE FILED AN APPEA L BEFORE THE LD. CIT(A) ALONG WITH THE CONFIRMATION LETTERS FROM THE SAID CREDITORS AND REQUESTED THAT THE SAME MAY BE ADMITTED IN DECIDING THE APPEAL. THE LD. CIT(A), HO WEVER, CALLED FOR A REMAND REPORT FROM THE A.O. THE A.O. FURNISHED THE REMAND REPORT VIDE HIS LETTER DATED 29.10.2010 WHICH WAS FORWARDED TO THE ASSESSEE. IN THE REMAND REPORT, THE A.O. STATED THAT THE CLAIM OF TH E ASSESSEE ABOUT THE RECEIPT OF RS.20 LAKHS TOWARDS S HARE APPLICATION MONEY FROM THE SAID FIVE PERSONS IS NOT GENUINE BECAUSE THEY HAD NO CREDITWORTHINESS TO GIV E SUCH AMOUNTS. THE REMAND REPORT WAS FORWARDED TO TH E ASSESSEE BUT NONE APPEARED FOR THE ASSESSEE. THEREF ORE, TAKING THE REMAND REPORT INTO CONSIDERATION, THE LD . CIT(A) CONFIRMED THE ADDITION OF RS.20 LAKHS. 4 ITA.NO.301/HYD/2011 GLOBAL ENERGY CONSULTING ENGINEERS P. LTD., HYDERABAD. 5.1. AS REGARDS THE SECOND ISSUE RELATING TO DISALLOWANCE OF EXPENDITURE CLAIMED UNDER SOFTWARE DEVELOPMENT EXPENSES, THE LD. CIT(A) OBSERVED THAT IN THE REMAND REPORT, THE A.O. HAS NOT MADE ANY SUBMISSIONS/COMMENTS WITH REFERENCE TO SUCH CLAIM RAISED BY THE ASSESSEE. THE LD. CIT(A) OBSERVED THA T THE ASSESSEE HAS NOT FURNISHED THE REQUIRED DOCUMENTS B EFORE THE A.O. EITHER DURING THE EARLIER PROCEEDINGS OR D URING THE REMAND PROCEEDINGS NOR BEFORE THE LD. CIT(A). I N VIEW OF THE SAME, THE LD. CIT(A) CONFIRMED THE DISALLOWA NCE OF THE EXPENDITURE MADE BY THE A.O. AGAINST THESE TWO ADDITIONS, THE ASSESSEE PREFERRED THE PRESENT APPEA L BEFORE THE TRIBUNAL. 6. THE LD. COUNSEL FOR THE ASSESSEE, MR. M.V. ANIL KUMAR, SUBMITTED THAT THE ASSESSEE HAS FURNISH ED ALL THE DETAILS ALONG WITH THE CONFIRMATION LETTERS BEF ORE THE CIT(A) AND THE A.O. DURING THE EARLIER PROCEEDINGS BUT THEY HAVE NOT BEEN CONSIDERED IN THEIR PROPER PERSP ECTIVE. HE HAS ALSO FILED A COPY OF THE AUDITED ACCOUNTS FO R THE YEAR ENDED 31.03.2005 BEFORE US IN THE PAPER BOOK O N 09.11.2015. HE PRAYED THAT ASSESSEES CASE MAY BE REMANDED BACK TO THE FILE OF THE A.O. FOR RECONSIDE RATION. 7. THE LD. D.R. OPPOSED THE REQUEST OF THE LD. COUNSEL FOR THE ASSESSEE TO REMAND THE ISSUE TO THE FILE OF THE A.O. ON THE GROUND THAT ASSESSEE HAS NEVER COOPERATED WITH THE OFFICERS FOR ASSESSMENT OF ITS INCOME. 5 ITA.NO.301/HYD/2011 GLOBAL ENERGY CONSULTING ENGINEERS P. LTD., HYDERABAD. 8. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT THE ASSE SSEE HAS NOT APPEARED BEFORE THE A.O. BUT HAS FILED CONFIRMA TIONS OF THE PARTIES BEFORE THE LD. CIT(A) BUT AGAIN HE D ID NOT APPEAR TO EXPLAIN HIS CASE BEFORE THE LD. CIT(A) AF TER RECEIPT OF THE REMAND REPORT OF THE A.O. THE LD. CI T(A), HAD THEREFORE, NO OPTION BUT TO CONFIRM THE FINDING S OF THE A.O. IN THE REMAND REPORT. THE ATTITUDE OF THE ASSE SSEE IN NOT APPEARING BEFORE THE AUTHORITIES BELOW IS NOT JUSTIFIABLE. HOWEVER, IN THE INTEREST OF JUSTICE, W E DEEM IT FIT AND PROPER TO REMIT THE ISSUE TO THE FILE OF TH E LD. CIT(A) WITH A DIRECTION TO THE ASSESSEE TO APPEAR B EFORE THE LD. CIT(A) ON THE DATES OF HEARING FIXED BY HIM AND EXPLAIN THE CASE TO THE CIT(A) WITHOUT TAKING ANY F URTHER ADJOURNMENTS. THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATE D AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23.02.2016. SD/- SD/- (B. RAMAKOTAIAH) (SMT. P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 23 RD FEBRUARY, 2016 VBP/- 6 ITA.NO.301/HYD/2011 GLOBAL ENERGY CONSULTING ENGINEERS P. LTD., HYDERABAD. COPY TO 1. GLOBAL ENERGY CONSULTING ENGINEERS P. LTD., HYDERABAD. C/O. M. ANANDAM & CO., CHARTERED ACCOUNTANTS, 7-A, SURYA TOWERS, S.D. ROAD, SECUNDERABAD 3. 2. THE DCIT, CIRCLE - 2(3), HYDERABAD. 3. CIT(A) - III, HYDERABAD. 4 . CIT - II, HYDERABAD. 5. D.R. ITAT B BENCH, HYDERABAD 6 . GUARD FILE