Raasi Refractories Ltd., Hyd, Hyderabad V. ITO, Ward - 3(1), Hyderabad, Hyderabad

ITA 340/HYD/2015

• Counselvise Citation: 34022514 RSA 2015
• Duration Of Justice: 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 23-11-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 06-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B KURMI NAIDU
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained cash credit
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORESHRI B.RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.340/HYD/2015 (ASSESSMENT YEAR 2010-11) M/S. RAASI REFRACTORIES LTD., HYDERABAD (PAN - AABCR 0333 H) V/S INCOME TAX OFFICER WARD 3(1) , HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.RAMA RAO RESPONDENT BY : SHRI B.KURMI NAIDU DATE OF HEARING 2 3 .11.015 DATE OF PRONOUNCEMENT 27.11.2015 O R D E R PER SAKTIJIT DEY, JUDICIAL MEMBER : THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORD ER DATED 9.1.2015 OF LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) 3, H YDERABAD FOR THE ASSESSMENT YEAR 2010-11. 2. ASSESSEE HAS RAISED SIX GROUNDS. GROUNDS NO.1 AND 6 BEING GENERAL GROUNDS, DO NOT REQUIRE SPECIFIC ADJUDICATI ON. IN GROUND NOS. 2 TO 4, ASSESSEE HAS CHALLENGED THE ADDITION OF AN AMOUNT O F RS.30 LAKHS UNDER S.68 OF THE ACT. 3. BRIEFLY THE FACTS ARE, ASSESSEE, A COMPANY, FI LED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION ON 4.11.2010 DECLARING TOTAL INCOME OF RS.33,26,160. IN THE COURSE OF THE ASSESSMENT PROCEEDINGS, IT AS NOTICED BY THE ASSESSING OFFICER THAT ASSESSEE I N ITS BOOKS OF ACCOUNT HAS SHOWN CASH RECEIPT OF RS.30 LAKHS ON 29.3.2010 AS CLAIMS RECEIVABLE. AFTER CALLING FOR NECESSARY DETAILS AND EXAMINING THE ASS ESSEES RESPONSE FOR THE QUERY MADE, THE ASSESSING OFFICER WAS OF THE OPINIO N THAT THE ASSESSEE HAS ITA NO.340/HYD/2015 M/S. RAASI REFRACTORIES LTD., HYDERABAD 2 FAILED TO PROVE THE GENUINENESS OF THE RECEIPTS. A CCORDINGLY, TREATING IT AS CASH CREDIT UNDER S.68 OF THE ACT, THE ASSESSING OFFICER MADE ADDITION TO THE TOTAL INCOME. LEARNED CIT(A) ALSO CONFIRMED THE ADDITIO N IN APPEAL. 4. THE LEARNED AUTHORISED REPRESENTATIVE REITERA TING THE STAND TAKEN BEFORE THE DEPARTMENTAL AUTHORITIES SUBMITTED THA T THE AMOUNT RECEIVED WAS AGAINST CLAIMS RECEIVABLES AND HENCE CANNOT BE TRE ATED AS UNEXPLAINED CASH CREDIT. REFERRING TO LEDGER EXTRACT OF CLAIMS RECE IVABLES AND VARIOUS OTHER DOCUMENTS SUBMITTED IN THE PAPER-BOOK, HE SUBMITTED THAT AS THE CLAIMS RECEIVABLES HAVE ALREADY BEEN SHOWN AS INCOME AS PE R ACCOUNTING POLICY FOLLOWED BY THE ASSESSEE, IT CANNOT BE TREATED AS I NCOME AT THE TIME OF ACTUAL RECEIPT, AS IT WILL AMOUNT TO TAXING THE SAME INCOM E TWICE. HE THEREFORE, ARGUED FOR DELETING THE ADDITION. 5. PER CONTRA, LEARNED DEPARTMENTAL REPRESENTATIVE RELYING UPON THE OBSERVATIONS OF THE ASSESSING OFFICER AND THE CIT(A ) SUBMITTED THAT AS ASSESSEE HAS FAILED TO FURNISH ANY DETAILS SUCH AS NAMES AND IDENTITY OF THE DEBTORS, THE ADDITION MADE IS JUSTIFIED. 6. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTI ES AND PERUSED THE MATERIALS ON RECORD. THE ONLY REASON FOR WHICH THE DEPARTMENTAL AUTHORITIES TREATED THE CASH RECEIPTS AGAINST CLAIM S RECEIVABLES AS UNEXPLAINED CREDITS IS THAT THE ASSESSEE FAILED TO PROVE THE GE NUINENESS OF THE RECEIPTS BY FURNISHING DETAILS OF DEBTORS. HOWEVER, ON PERUSAL OF MATERIAL SUBMITTED BEFORE US, IT IS VERY MUCH CLEAR THAT THE ASSESSING OFFICER HAS NEITHER DISPUTED THE SALES DECLARED BY THE ASSESSEE NOR THE SUNDRY D EBTORS. IT IS ALSO DEMONSTRATED BEFORE US THAT THE CLAIMS RECEIVABLE O F RS.2,89,52,806 AT THE END OF THE YEAR IS AFTER TAKING INTO ACCOUNT THE AM OUNT OF RS.30 LAKHS RECEIVED AGAINST CLAIMS RECEIVABLES. THUS, WHEN THE ASSESSIN G OFFICER IS NOT DISPUTING THE SALES MADE AND THE CLOSING BALANCE OF CLAIMS RE CEIVABLES ACCOUNT, HE ITA NO.340/HYD/2015 M/S. RAASI REFRACTORIES LTD., HYDERABAD 3 CANNOT TREAT THE AMOUNT CREDITED TO CLAIMS RECEIVAB LES ACCOUNT AS UNEXPLAINED CASH CREDIT. IT IS FURTHER RELEVANT TO NOTE, THE LEARNED CIT(A) HAS ACCEPTED THE ACCOUNTING POLICY ADOPTED BY THE ASSES SEE AS PER WHICH CLAIMS RECEIVABLE IS SHOWN BY CREDITING THE RESPECTIVE REV ENUE HEAD AND DEBITING THE CLAIMS RECEIVABLE ACCOUNT. THAT BEING THE CASE, THE AMOUNT IN QUESTION HAVING ALREADY FORMED PART OF THE INCOME AT THE TIM E OF CREDITING IT CANNOT AGAIN BE TREATED AS INCOME AT THE TIME OF RECEIPT. FURTHER, FROM THE MATERIAL PLACED ON RECORD, IT IS CLEARLY DEMONSTRATED THAT A MOUNT RECEIVED IS A TRADE CREDIT AND NOT A CASH CREDIT. HENCE, CONSIDERED IN THE AFORESAID PERSPECTIVE, ADDITION MADE UNDER S.68 OF THE ACT IS NOT SUSTAINA BLE. ACCORDINGLY, WE DELETE THE SAME. GROUNDS RAISED ON THIS ISSUE ARE ALLOWE D. 7. IN VIEW OF OUR DECISION, AS ABOVE, GROUND RELA TING TO LEVY OF INTEREST UNDER S.234A, 234B AND 234C HAS BECOME INF RUCUTOUS. HENCE, IT IS DISMISSED. 8. IN THE RESULT, ASSESSEES APPEAL IS TREATED AS ALLOWED. PRONOUNCED IN THE COURT ON 27 TH NOVEMBER, 2015 SD/- SD/- (B.RAMAKOTAIAH) (SAKTIJIT DEY) ACCOUNTANT MEMBER. JUDICIAL MEMBER DT/- 27 TH NOVEMBER, 2015 COPY FORWARDED TO: 1. M/S. RAASI REFRACTORIES LTD., C/O. SHRI S.RAMA R AO, FLAT NO.102, SHIRYA'S ELEGANCE, NO.3-6-643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500029 2. INCOME TAX OFFICER WARD 3(1), HYDERABAD ITA NO.340/HYD/2015 M/S. RAASI REFRACTORIES LTD., HYDERABAD 4 3. 4. COMMISSIONER OF INCOME-TAX(APPEALS) III, HYDERABAD COMMISSIONER OF INCOME-TAX-3, HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE ITAT, HYDERABAD B.V.S.