Arudra Roofings Private Limited, Hyderabad V. ITO, Ward-1(2), Hyderabad

ITA 598/Hyd/2022

AI Insights

The case involves Arudra Roofings (P) Ltd, which appealed against the order of the CIT (A)-NFAC, Delhi, concerning the assessment year 2011-12. The primary issues in the appeal were related to various additions made by the Assessing Officer (AO) in the assessment order, which were sustained by the CIT (A). The AO had made additions based on unreported income and disallowed interest expenditure under section 14A of the Income Tax Act. The CIT (A) upheld these additions, leading to the appeal before the Tribunal. The Tribunal found that the assessee had not adequately presented its case at earlier stages due to technical issues and granted a restoration of the case to the CIT (A) for a fresh examination.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 128919 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 14-02-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 30-10-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS
• Section: 142(1); 234B; 14A; 115JB; 143(1); 143(2); 22

Judgement Text

ITA 598 of 2022 Arudra Roofings P Ltd Secunderabad Page 1 of 6 आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘A‘ Bench, Hyderabad Before Shri R.K. Panda, Accountant Member AND Shri Laliet Kumar, Judicial Member ITA No.598/Hyd/2022 Assessment Year: 2011-12 M/s. Arudra Roofings (P) Ltd, Secunderabad PAN:AABCV1454D Vs. Income Tax Officer Ward 1(2) Hyderabad (Appellant) (Respondent) Assessee by : Shri T. Rajendra Prasad, CA Revenue by: Shri KPRR Murthy, CIT(DR) Date of hearing: 15/02/2023 Date of pronouncement: 17/02/2023 ORDER Per R.K. Panda, A.M This appeal filed by the assessee is directed against the order dated 26.7.2022 of the learned CIT (A)-NFAC, Delhi relating to A.Y.2011-12. 2. There is a delay of 37 days in filing of the appeal for which the assessee has filed a condonation application along with an affidavit explaining the reasons for such delay. After considering the contents of the condonation application and after hearing the learned DR, the delay in filing of the appeal by the assessee is condoned and the appeal is admitted for adjudication. ITA 598 of 2022 Arudra Roofings P Ltd Secunderabad Page 2 of 6 3. Although a number of grounds have been raised by the assessee, however, these all relate to the various additions made by the Assessing Officer in the assessment order and sustained by the learned CIT (A)NFAC. 4. Facts of the case, in brief, are that the assessee is a company engaged in the business of manufacturing of Asbestos Roofings and allied activities. It filed its return of income on 21.6.2012 declaring total loss at Rs.17,18,705/-. The return was processed u/s 143(1) of the Act and subsequently the case was selected for scrutiny and statutory notices u/s 143(2) and 142(1) were issued to which the AR of the assessee appeared before the Assessing Officer from time to time and filed the requisite details. 5. During the course of assessment proceedings, the Assessing Officer on verification of Form No.26AS available with the Department noted that an amount of Rs.1,14,040/- was accrued on a/c of interest on security u/s 193 and TDS of Rs.11,404/- was appearing. He further noted that the assessee has received interest of Rs.8,233/- from the ICICI Bank. However, the above two amounts were not shown by the assessee. The Assessing Officer confronted the same to the assessee and asked the assessee to explain the discrepancy. In absence of any explanation by the assessee, the Assessing Officer made addition of Rs.1,22,273/-. 6. Similarly, the Assessing Officer noted from the balance sheet that the assessee has invested Rs.8,30,959,540/-. It has obtained loan from Bank and incurred expenditure. However, the company did not disallow the interest expenditure u/s 14A of the ITA 598 of 2022 Arudra Roofings P Ltd Secunderabad Page 3 of 6 I.T Act. When the Assessing Officer asked the assessee to explain as to why the disallowance u/s 14A should not be made, the assessee did not file any explanation. The Assessing Officer, therefore, computed the disallowance u/s 14A at Rs.4,82,250/- and accordingly made addition of the same to the total income of the assessee. 7. The Assessing Officer further observed from the balance sheet that the assessee company has booked an amount of Rs.2,34,981/- against the accrued interest on VILICD under the head current asset. Since the assessee is following the mercantile system of accounting and has not brought the accrued amount of Rs.2,34,981/-, the Assessing Officer made addition of the same to the total income of the assessee. The Assessing Officer accordingly determined the total loss of the assessee at Rs.4,82,336/-. 8. The Assessing Officer similarly determined the book profit u/s 115JB at Rs.1,85,92,054/- and determined the tax thereof at Rs.37,46,569/-. Apart from the above, the Assessing Officer also computed the interest u/s 234A, 234B and 234C amounting to Rs.18,54,602/-. Thus, the demand of Rs.55,60,000/- was raised. The Assessing Officer accordingly determined the total loss of the assessee at Rs.4,82,336/- as against the returned loss of Rs.17,18,705/- after considering the capital gain of Rs.3,94,861/-. 9. In appeal, the learned CIT (A)-NFAC in the ex-parte order passed by it upheld the various additions made by the Assessing Officer by observing as under: ITA 598 of 2022 Arudra Roofings P Ltd Secunderabad Page 4 of 6 “6.2. Though the appellant claims that the AO was not justified in making such assessment, he never put forth any reasons for claiming so. Even during current appellant proceedings, the appellant never came forward with his explanation to the grounds mentioned by the appellant despite being offered number of opportunities through hearing notices issued by this office. The onus lies on the appellant to prove his case before seeking relief in the appellate proceedings. On this front, appellant miserably failed. In these circumstances, it is deemed fit not to interfere with the assessment made by the AO. Accordingly, the addition made by the AO is upheld and grounds are dismissed”. 10. Aggrieved with such order of the learned CIT (A) the assessee is in appeal before the Tribunal. 11. The learned Counsel for the assessee at the outset submitted that due to technical problems the assessee could not upload the written submission electronically through the Income Tax E-Filing Web before the statutory due date. He submitted that although the assessee during the impugned A.Y while filing its return of income has claimed an amount of Rs.28,74,665/- being the dividend received by the assessee company, however, while completing the assessment, the Assessing Officer did not allow the deduction of the same while computing the book profit u/s 115JB of the I.T. Act. He submitted that the Assessing Officer, while computing the total income u/s 115JB, has taken the P&L A/c at Rs.65,33,568/- which is prior to the appropriations instead of taking profit as per P&L A/c at Rs. 1,55,68,904/-, Referring to various other details which were filed in the statement of facts before the learned CIT(A)/NFAC which has been reproduced by it at Para 4 of its order, he submitted that the learned CIT(A)/NFAC has not considered the submissions already filed before it and passed the orders. He submitted that given an opportunity, the assessee is in a position to substantiate its case to the satisfaction of the learned CIT (A)-NFAC. He accordingly ITA 598 of 2022 Arudra Roofings P Ltd Secunderabad Page 5 of 6 submitted that in the interest of justice the matter should be restored to the file of the CIT (A)-NFAC. 12. The learned DR, on the other hand, submitted that the assessee has not filed the requisite details before the Assessing Officer or before the learned CIT(A)NFAC. Therefore, the various additions made by the Assessing Officer and sustained by the learned CIT(A)/NFAC should be upheld and the grounds raised by the assessee should be dismissed. 13. We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned CIT (A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us by both sides. We find the AO in the instant case determined the total loss of the assessee under the normal provisions at Rs.4,82,336/- as against the returned loss of Rs.17,18,705/- and also determined the book profit u/s 115JB at Rs.1,85,92,054/-. We find in absence of any compliance from the side of the assessee to the statutory notices issued by it, the learned CIT (A)-NFAC sustained the various additions made by the Assessing Officer and upheld the computation of the book profit u/s 115JB of the I.T. Act. It is the submission of the learned Counsel for the assessee that although the assessee has not appeared before the learned CIT (A)NFAC due to unavoidable circumstance, however, in the statement of facts all the details were there and therefore, the learned CIT (A) NFAC should have considered the same before passing the ex- parte order. It is also his submission that given an opportunity, the assessee is in a position to substantiate its case before the learned CIT (A) NFAC. Considering the totality of the facts of the ITA 598 of 2022 Arudra Roofings P Ltd Secunderabad Page 6 of 6 case and in the interest of justice, we deem it proper to restore the issue to the file of the learned CIT (A) NFAC with a direction to grant one last opportunity to the assessee to substantiate its case and decide the issue as per fact and law. The assessee is also hereby directed to appear before the learned CIT (A) NFAC and file the requisite details without seeking any adjournment under any pretext failing which the learned CIT(A)/NFAC is at liberty to pass appropriate order a per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes. 14. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 17 th February, 2023. Sd/- Sd/- (LALIET KUMAR) JUDICIAL MEMBER (R.K. PANDA) ACCOUNTANT MEMBER Hyderabad, dated 17 th February, 2023. Vinodan/sps Copy to: S.No Addresses 1 Arudra Roofings (P) Ltd 22 & 23, Sarwasukhi Society, West Marredpally, Secunderabad 500026 2 Income Tax Officer Ward 1(2) Block B, 7 th Floor, AC Guards, Masab Tank, Hyderabad 500004 3 CIT (A)- NFAC Delhi 4 Pr. CIT-, Hyderabad 5 DR, ITAT Hyderabad Benches 6 Guard File By Order