S.S.Organics Limited, Hyderabad V. Asst.CIT,Circle 8(1), Hyderabad

ITA 603/HYD/2014

• Counselvise Citation: 60322514 RSA 2014
• Duration Of Justice: 7 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 03-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMAKRISHNA BANDI
• Assessee Lawyers: Y SURYANARAYANA
• Section: 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 603/HYD/2014 ASSESSMENT YEAR 2006-07 M/S. S.S. ORGANICS LTD. HYDERABAD PAN: AADCS2216C VS THE ASST. CIT CENTRAL CIRCLE-8(1) HYDERABAD APPLICANT RESPONDENT APPELLANT BY: SRI Y. SURYANARAYANA RESPONDENT BY: SRI RAMAKRISHNA BANDI DATE OF HEARING: 26.11.2014 DATE OF PRONOUNCEMENT: 28.11.2014 ORDER PER ASHA VIJAYARAGHAVAN, JM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A)-III, HYDERABAD DATED 18.2.2014 FOR A.Y. 2006 -07. 2. THE ASSESSEE-COMPANY FILED ITS RETURN OF INCOME ON 15.11.2006 DECLARING A LOSS OF RS. 51,57,978. THE DDIT (INV.) CONDUCTED AN ENQUIRY IN THE CASE OF THE ASSESSEE AND SUBMITTED A REPORT DATED 11.12.2008 INFORMING THAT THE ASSESSEE-COMPANY HAD DEPOSITED AN AMOUNT OF RS. 70,000 IN ING VYSYA BANK, RS. 20,40,0 00 IN HDFC BANK AND RS. 43,50,000 IN SBI TOTALLING TO RS. 64,6 0,000. THE DDIT (INV.) HELD THAT THE SAME MAY BE TREATED AS UNEXPLA INED CASH DEPOSITS U/S. 68 OF INCOME-TAX ACT, 1961. A NOTICE U/S. 148 WAS ISSUED TO THE ASSESSEE-COMPANY ON 22.7.2010 BY DCIT-1(1), HYD ERABAD. 3. THE LEARNED AR OF THE COMPANY AND THE MANAGING DIRE CTOR APPEARED BEFORE THE ASSESSING OFFICER AND STATED TH AT THE CASH IS DEPOSITED FROM THE INTERNAL ACCRUALS AND SHARE APPL ICATION MONEY. IN THE ABSENCE OF ANY EVIDENCE TO PROVE THE SAME, T HE ASSESSING 2 ITA NO. 603/HYD/2014 M/S. S.S. ORGANICS LTD. ================== OFFICER ADDED THE AMOUNT OF RS. 64,60,000 AS UNEXPL AINED CASH DEPOSITS IN BANK. 4. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). NONE APPEARED BEFORE THE CIT(A). THE CIT( A) DISMISSED APPEAL OF THE ASSESSEE BY HOLDING AS UNDER: '4.3 I FIND THAT THERE IS ABSOLUTELY NO EVIDENCE TO PROVE THAT THERE WERE INTERNAL CASH ACCRUALS WHICH WERE DEPOSITED IN CASH. I DO NOT SEE ANY LOGICAL R EASON AS TO WHY INTERNAL ACCRUALS I.E., PROFITS WOULD BE DEPOSITED IN CASH IN HUGE AMOUNTS. MOREOVER, THERE IS ABSOLUTELY NO EVIDENCE TO SHOW ANY SHARE APPLICATIO N AMOUNT RECEIVED AND THAT TOO IN CASH IN LARGE QUANTITIES. IN THE ABSENCE OF ANY EVIDENCE I DO NO T SEE ANY REASON TO DELETE THE ADDITION MADE AND TO INTERFERE WITH THE ORDER OF THE ASSESSING OFFICER.' 5. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 6. THE LEARNED COUNSEL SUBMITTED BEFORE US THAT ONE OF THE SHAREHOLDERS OF THE ASSESSEE-COMPANY HAD FORCIBLY O CCUPIED THE COMPANY PREMISES AND DECLARED HIMSELF AS CHAIRMAN A ND MANAGING DIRECTOR OF THE ASSESSEE-COMPANY. THE EARLIER MANA GING DIRECTOR SRI V.N. SUNANDA REDDY FILED A COMPLAINT BEFORE THE COM PANY LAW BOARD AND THE COMPANY LAW BOARD DECIDED THE COMPANY 'S APPEAL IN FAVOUR OF SRI V.N. SUNANDA REDDY. SUBSEQUENTLY, THE HONBLE HIGH COURT OF ANDHRA PRADESH UPHELD THE ORDER OF TH E COMPANY LAW BOARD AND SRI V.N. SUNANDA REDDY AND HIS ASSOCI ATES HAD TAKEN POSSESSION OF THE COMPANY DURING THE END OF T HE FIRST QUARTER OF THE FY 2012-13. 7. IT WAS EXPLAINED THAT DUE TO THE CIRCUMSTANCES STAT ED ABOVE, NOBODY REPRESENTED BEFORE THE CIT(A) AND AN EX-PART E ORDER WAS PASSED BY THE CIT(A). THE LEARNED COUNSEL ALSO FIL ED ADDITIONAL GROUND OF APPEAL BEFORE US. 8. WE HAVE HEARD BOTH THE PARTIES. WE APPRECIATE THAT THE ASSESSEE WAS UNABLE TO REPRESENT BEFORE THE CIT(A) DUE TO UNFORTUNATE CIRCUMSTANCES BEING IN-FIGHT AMONG THE SHAREHOLDERS. IN 3 ITA NO. 603/HYD/2014 M/S. S.S. ORGANICS LTD. ================== THESE CIRCUMSTANCES, WE REMIT THE ISSUE BACK TO THE FILE OF THE CIT(A) WHO SHALL DECIDE THE ISSUE AFTER GIVING A REASONABL E OPPORTUNITY TO THE ASSESSEE TO REPRESENT ITS CASE. THE CIT(A) SHA LL ALSO ADJUDICATE ON THE ADDITIONAL GROUND RAISED BEFORE US. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSES. 10. IN THE RESULT, ASSESSEE'S APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 28 TH NOVEMBER, 2014 SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER SD/- (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER HYDERABAD, DATED THE 28 TH NOVEMBER, 2014 TPRAO COPY TO: 1. M/S. S.S. ORGANICS LTD., H. NO. 8 - 2 - 120/77/5, GROUND FLOOR, OPP.: KBR PARK, ROAD NO. 2, BANJARA HILLS, HYDERABAD-500 034. 2. THE ASST. CIT, CENTRAL CIRCLE - 8( 1 ) , HYDERABAD. 3. THE CIT(A) - II I, HYDERABAD. 4. THE CIT - II, HYDERABAD. 5. THE DR, A - BENCH, ITAT, HYDERABAD.