Sukumar Bandireddi, Hyderabad, Hyderabad V. DCIT, Circle-14(1), Hyderabad, Hyderabad

ITA 43/HYD/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6442 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 24-07-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 06-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJEEV BENZWAL
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A , HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 43 /HYD/201 7 ASSESSMENT YEAR: 20 1 2 - 1 3 SUKUMAR BANDIREDDI, HYDERABAD. PAN AITPB1538P VS. DY. COMMISSIONER OF INCOME - TAX, CIRCLE 14(1), HYDERABAD. ( APPELLANT ) (RESPONDENT) ASSESSEE BY : SHRI A. SRINIVAS REVENUE BY : SHRI RAJEEV BENZWAL DATE OF HEARING 24 / 0 7 /2018 DATE OF PRONOUNCEMENT 2 7 / 0 7 / 201 8 O R D E R PER S . RIFAUR RAHMAN , A .M. : T H IS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 10 / 1 0 / 201 6 OF CIT(A) 6 , HYDERABAD FOR AY 20 1 2 - 1 3 . 2. BRIEF FACT S OF THE CASE ARE, ASSESSEE, AN INDIVIDUAL, ENGAGED IN THE BUSINESS OF FILM DIRECTION, E - FILED HIS RETURN OF INCOME FOR THE AY 2012 - 13 ON 29/09/2012 ADMITTING TOTAL INCOME OF RS. 48,50,690/ - , WHICH WAS PROCESSED U/S 143(1) OF THE INCOME - TAX ACT, 1961 ( IN SHORT THE ACT). CONSEQUENT TO THE NOTICE ISSUED U/S 143(2), THE AR OF THE ASSESSEE FURNISHED THE INFORMATION AS REQUIRED. 2.1 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO ASKED THE ASSESSEE TO PRODUCE BILLS AND VOUCHERS ALONG WITH LEDGERS FOR THE EXPENSES INCURRED IN THE AY UNDER CONSIDERATION. ON PERUSAL AND EXAMINATION OF BILLS & VOUCHERS FURNISHED BY THE ASSESSEE, THE AO NOTICED THAT THE EXPENSES INCURRED IN RESPECT OF STORY DEVELOPMENT, 2 ITA NO. 43 /HYD/1 7 SUKUMAR BANDIREDDI VIZ., REMUNERATION PAID TO UPCOMING STORY WRITERS FOR STORY DEVELOPMENT, DIALOGUE WRITING AND FOR THEIR TRAVELLING, LODGING/FOOD EXPENSES HAD BEEN GROUPED UNDER STORY DEVELOPMENT CHARGES AND TREATED AS CLOSING WORK - IN - PROGRESS IN PREVIOUS YEAR I.E. AY 2011 - 12 AMOUNTING TO RS. 8,97,030/ - WITHOUT CLAIMING AS AN EXPENSE AND THE SAME WAS CLAIMED AS STORY DEVELOPMENT CHARGES AT RS. 8,97,030/ - IN THE AY 2012 - 13. SINCE, THESE EXPENSES DO NOT PERTAIN TO THE CURRENT AY, THE SAME W AS DISALLOWED BY THE AO. 2.2 FURTHER, THE AO ASKED THE ASSESSEE TO RECONCILE THE INCOME RECEIVED AS PER 26AS AND INCOME OFFERED IN THE RETURN OF INCOME FOR THE AY UNDER CONSIDERATION. AR OF ASSESSEE FURNISHED RECONCILIATION STATEMENT OF GROSS RECEIPTS IN ITR WITH INCOME AS PER 26AS. ON EXAMINATION OF THE SAME, AO NOTICED THAT THE ASSESSEE HAD RECEIVED AN AMOUNT OF RS. 26,00,000/ - AS PER 26AS FROM M/S UTV SOFTWARE COMMUNICATIONS LTD. BUT SAME H AS NOT BEEN REFLECTED IN THE BOOKS OF ACCOUNT. WHEN, THE INFORMATION WAS CALLED FOR U/S 133(6) FROM M/S UTV SOFTWARE COMMUNICATIONS LTD. VIDE LETTER DATE D 19/02/2015 TO KNOW THE GENUINENESS OF THE TRANSACTION, THE SAID COMPANY H AS CONFIRMED VIDE ITS LETTER DATED 10/03/2015 B Y FURNISHING LEDGER OF THE ASSESSEE IN ITS BOOKS. THEREFORE, THE AO ADDED THE SAID AMOUNT OF RS. 26,00,000/ - AS INCOME OF THE ASSESSEE . 2. 3 IN VIEW OF THE ABOVE, THE AO ASSESSED THE TOTAL INCOME OF THE ASSESSEE AT RS. 84,54,439/ - AS AGAINST THE RETURNED INCOME OF THE ASSESSEE AT RS. 48,50,690/ - . 3. AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), WHO CONFIRMED THE ORDER OF AO. 4. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE PREFERRED AN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 3 ITA NO. 43 /HYD/1 7 SUKUMAR BANDIREDDI 1. THE ORDER OF THE APPELLANT COMMISSIONER IS CONTR ARY TO LAW, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE APPELLANT COMMISSIONER OUGHT NOT TO HAVE DISALLOWED AN AMOUNT OF RS. 8,97,030/ - AS NOT RELATED THE EXPENSES OF THE AY 2012 - 13. 3. THE APPELLANT COMMISSIONER OUGHT NOT TO HAVE ADDED THE AMOUNT OF RS. 26,00,000/ - RECEIVED FROM M/ S UTV SOFTWARE COMMUNICATIONS LIMITED WHICH IS REFUNDED BY THE ASSESSEE WITHOUT DEPOSITING INTO THE BANK A/ C. 4. ANY OTHER GROUNDS THAT MAY BE PLEADED WITH THE PRIOR PERMISSION OF YOUR HONOR AT THE TIME OF HEARING. 4. GROUND NOS. 1 & 4 ARE GENERAL IN NATURE, HENCE, NEED NO ADJUDICATION. 5. AS REGARDS GROUND NO. 2, THE LD. AR OF THE ASSESSEE SUBMITTED THAT TH E EXPENDITURE OF RS. 8,97,030/ - ON ACCOUNT OF STORY DEVELOPMENT EXPENSES INCURRED DURING THE AY UNDER CONSIDERAT ION, AS THE SAME WAS SHOWN IN THE BALANCE SHEET UNDER THE CURRENT ASSETS FOR AY 2011 - 12 AS STORY DEVELOPMENT WORK IN PROGRESS . HE, THEREFORE, SUBMITTED THAT THE REVENUE AUTHORITIES ARE NOT PROPER IN DISALLOWING THE SAME AS NOT PERTAINING TO THE AY UNDER CONSIDERATION. HE BROUGHT TO OUR NOTICE THE FINANCIAL STATEMENTS OF PREVIOUS AY. 6. THE LD. DR, ON THE OTHER HAND, BESIDES RELYING ON THE ORDERS OF REVENUE AUTHORITIES SUBMITTED THAT THE ASSESSEE HAS NOT SUBSTANTIATED HIS CLAIM OR FURNISHED ANY PROOF THAT THE EXPENDITURE INCURRED IN THE AY UNDER CONSIDERATION ARE IN FACT RELATING TO THE INCOME EARNED BY ASSESSEE. 7. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE REVENUE AUTHORITIES DISALLOWED THE EXPENDITURE INCURRED BY THE ASSE SSEE OF RS. 8,97,030/ - ON THE GROUND THAT THE SAME IS NOT PERTAINING TO THE AY UNDER CONSIDERATION AND ALSO THAT THE SAME WAS NOT AT ALL SUBSTANTIATED TO PROVE THAT IT RELATES TO THE INCOME EARNED 4 ITA NO. 43 /HYD/1 7 SUKUMAR BANDIREDDI DURING THIS AY. WHEREAS, LD. AR SUBMITTED THAT THE PROVISI ON OF THE SAID EXPENDITURE WAS MADE IN AY 2011 - 12 AND THE EXPENDITURE INCURRED IN AY 201 1 - 12, THEREFORE, THE SAME IS AN ALLOWABLE EXPENDITURE. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, WE REMIT THE ISSUE BACK TO THE FILE OF THE AO WITH A DIRECT ION TO DECIDE THE ISSUE AFTER TAKING INTO CONSIDERATION THE SUBMISSIONS OF THE ASSESSEE. THE ASSESSEE IS DIRECTED TO SUBSTANTIATE HIS CLAIM THAT THE EXPENDITURE IS INCURRED IN THE AY UNDER CONSIDERATION ARE RELATING TO THE INCOME EARNED DURING THIS AY . THE GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 8. AS REGARDS GROUND NO. 3 PERTAINING TO ADDITION OF RS. 26,00,000/ - , THE LD. AR OF THE ASSESSEE INVITED OUR ATTENTION TO PAGES 11 & 12 OF THE PAPER BOOK, WHICH ARE FORM 26AS DATED 04/02/2015 AND 25/10/2016 TO SUBMIT THAT THE UTV SOFTWARE COMMUNICATIONS LTD. WRONGLY CREDITED THE SAID AMOUNT OF RS. 26,00,000/ - IN ASSESSEES ACCOUNT, WHICH WAS RECTIFIED SUBSEQUENTLY. THEREFORE, HE SUBMITTED THAT THE ADDITION MAY BE DELETED. 9. THE LD. DR ON THE OTHER HAND SUBMIT TED THAT THE MATTER MAY BE REMITTED TO AO FOR VERIFICATION. 10. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. SINCE THE AMOUNT OF RS. 26,00,000/ - WAS WRONGLY CREDITED BY M/S UTV SOFTWARE COMMUNICATIONS L TD. AND THE SAME WAS RECTIFIED LATER, AS PER 26AS FORMS SUBMITTED BEFORE US , WE REMIT THE ISSUE TO THE FILE OF AO FOR VERIFICATION AND PASS APPROPRIATE ORDER IN ACCORDANCE WITH LAW. THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 5 ITA NO. 43 /HYD/1 7 SUKUMAR BANDIREDDI 11. IN THE RESULT , APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. SD/ - SD/ - ( P. MADHAVI DEVI ) (S . RIFAUR RAHMAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 27 TH JU LY , 2018 KV C OPY TO: - 1) MR. SUKUMAR BANDIREDDI, D.NO. 11 - 4 - 646/B2, FLAT NO. 301, TRENDSET HILLTOP APARTMENTS, AC GUARDS, HYD 500 004. 2) DCIT, CIRCLE 14(1), HYD. 3) CIT(A) 6, HYDERABAD. 4) PR. CIT - 6 , HYD. 5 ) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. 6 ) GUARD FILE