K L R Industries Limited, Hyderabad V. Income Tax Officer, Ward-2(1), Hyderabad

ITA 301/Hyd/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1710 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 18-05-2021
• Assessment Year: 2014-2015
• Appeal Filed On: 12-02-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S RAMA RAO
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER I.T.A. NO. 301/HYD/2018 ASSESSMENT YEAR: 2014-15 K.L.R.INDUSTRIES LTD., HYDERABAD [PAN: AABCK7920K] VS THE INCOME TAX OFFICER, WARD-2(1), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI S.RAMA RAO, AR FOR REVENUE : SHRI SUNIL KUMAR PANDEY, DR DATE OF HEARING : 18-05-2021 DATE OF PRONOUNCEMENT : 01-07-2021 O R D E R PER S.S.GODARA, J.M. : THIS ASSESSEES APPEAL FOR AY.2014-15 ARISES FROM TH E CIT(A)-8, HYDERABADS ORDER DATED 22-11-2017 PASSED IN CASE NO.0261/CIT(A)-8/HYD/2016-17, IN PROCEEDINGS U/S.14 3(3) OF THE INCOME TAX ACT, 1961 [IN SHORT, THE ACT]. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE ASSESSEE HAS PLEADED THE FOLLOWING SUBSTANTIVE GROUNDS IN THE INSTANT APPEAL: 1.THE ORDER OF THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFIC ER OF ITA NO. 301/HYD/2018 :- 2 -: RS.52,66,579/- HOLDING THAT INTEREST IS NOT ALLOWAB LE IN VIEW OF THE PROVISIONS OF SEC.36(1)(III) OF THE ACT. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.4,20,674 MADE BY THE ASSESSING OFFICER BY APPLYING THE PROVISIONS OF SEC.40(A)(II) OF THE I.T.ACT. 4. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.13,29,652 MADE BY THE ASSESSING OFFICER APPLYING THE PROVISIONS OF SEC.40(A)(IA) OF THE ACT. 5. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.3,00,000 MADE BY THE ASSESSING OFFICER BY DISALLOWING THE BUSINESS PROMOTION EXPENDITURE. 6. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER WITH REGARD THE PROFIT ON SALE OF ASSETS OF RS.3,95,276/-. 3. COMING TO THE ASSESSEES FIRST AND FOREMOST GRIEVAN CE CHALLENGING CORRECTNESS OF BOTH THE LOWER AUTHORITIES A CTION MAKING SECTION 36(1)(III) INTEREST DISALLOWANCE OF RS.52,66,579/-, WE NOTICE THAT THE SAME IS INDEED A RE CURRING ISSUE AND THE CIT(A)S ORDER IN AYS.2012-13 AND 2013 -14 HAD RESTORED IT BACK TO THE ASSESSING OFFICER FOR HIS AFRES H FACTUAL VERIFICATION. THIS TRIBUNALS CO-ORDINATE BENCHS ORD ER DT.05-04-2018 IN REVENUES APPEALS ITA NOS.1155 AND 1156/HYD/2017 HAD AFFIRMED THE CIT(A)S ACTION TO THI S EFFECT. WE THEREFORE DEEM IT APPROPRIATE TO ADOPT THE VERY COURSE OF ACTION IN THE IMPUGNED ASSESSMENT YEAR AS WELL. THE ASSESSEES FIRST AND FOREMOST GRIEVANCE OF SECTION 36 (1)(III) INTEREST DISALLOWANCE IS RESTORED BACK TO THE ASSESSING OFFICER TO BE DECIDED IN LAW ON HIS FINDINGS IN PRECEDING AS SESSMENT YEARS I.E. AYS.2012-13 AND 2013-14. ORDERED ACCORD INGLY. 4. COMING TO THE ASSESSEES REMAINING LATTER SUBSTANTIVE GROUND SEEKING TO REVERSE THE LEARNED LOWER AUTHORITI ES ACTION INVOKING SECTION 40(A)(II) AND 40(A)(IA), BUSINESS P ROMOTION ITA NO. 301/HYD/2018 :- 3 -: EXPENDITURE AND PROFIT ON SALE OF ASSETS DISALLOWANCES/ADDITIONS (SUPRA), WE FIND FORCE IN THE REVENUES ARGUMENTS THAT THE CORRESPONDING 3 RD TO 8 TH SUBSTANTIVE GROUNDS BEFORE THE CIT(A) HAD BEEN GIVEN UP AS PER P ARA 7 OF THE LOWER APPELLATE ORDER. THERE IS NO PLEADING REBUTT ING CORRECTNESS THEREOF BEFORE US. WE THUS SEE NO MERIT IN ASSESSEES 3 RD TO 5 TH SUBSTANTIVE GROUNDS WHEREAS ITS 6 TH SUBSTANTIVE GRIEVANCE REGARDING SALE OF ASSETS IS RES TORED BACK TO THE ASSESSING OFFICER FOR HIS AFRESH FACTUAL VERIFI CATION REGARDING SALE OF ASSETS VIZ-A-VIZ THE CORRESPONDING EFFECT ON DEPRECIATION CLAIM. ORDERED ACCORDINGLY. 5. THIS ASSESSEES APPEAL IS PARTLY ALLOWED FOR STATIS TICAL PURPOSES IN ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST JULY, 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.G ODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD, DATED: 01-07-2021 TNMM ITA NO. 301/HYD/2018 :- 4 -: COPY TO : 1.K.L.R.INDUSTRIES LIMITED, SURVEY NO.221/1, CHERLA PALLY ROAD, ECIL POST, HYDERABAD. 2.THE INCOME TAX OFFICER, WARD-2(1), HYDERABAD. 3.CIT(APPEALS)-8, HYDERABAD. 4.PR.CIT-2, HYDERABAD. 5.D.R. ITAT, HYDERABAD. 6.GUARD FILE.