DCIT, Circle-16(2), Hyd, Hyderabad V. P M Telelinks Ltd., Sec-bad, Secunderabad

ITA 661/HYD/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2527 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 27-06-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 09-05-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P CHANDRA SEKHAR
• Section: 143(3); 115JB; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER I.T.A. NO. 661/HYD/2016 ASSESSMENT YEAR: 2012-13 DY. COMMISSIONER OF INCOME TAX, CIRCLE-16(2), HYDERABAD VS M/S. P M TELELINKS LIMITED, SECUNDERABAD [PAN: AADCP0835A] (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI P. CHANDRA SEKHAR, CIT-DR FOR ASSESSEE : SHRI K.C. DEVDAS, AR DATE OF HEARING : 05-10-2017 DATE OF PRONOUNCEMENT : 17-10-2017 O R D E R PER SMT. P. MADHAVI DEVI, J.M. : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE O RDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-4, HYDERABA D, DATED 29-02-2016. 2. BRIEF FACTS OF THE CASE ARE THAT, THE ASSESSEE-COMPAN Y, ENGAGED IN TRADING ACTIVITY, FILED ITS RETURN OF INCOME FOR THE AY. 2012-13 ON 30-09-2012 ADMITTING NIL TOTAL INCOME AND CURRENT YEAR LOSS OF RS. 38,17,33,151/-. THE BOOK PROFIT U/ S. 115JB OF THE INCOME TAX ACT [ACT] WAS ADMITTED AT (-) RS. 62,02,97,46 3/-. THE ASSESSMENT PROCEEDINGS U/S. 143(3) WERE INITIATED BY ISSUANCE OF NOTICE U/S. 143(2) OF THE ACT. HOWEVER, SINCE THERE W AS NO COMPLIANCE FROM THE ASSESSEES SIDE TO THE ABOVE NOTIC E, EXCEPT FOR THE APPEARANCE OF ONE MR. I. SESHASAYI, ON 27-02-201 5 ON BEHALF ITA. NO. 661/HYD/2016 :- 2 - : OF ASSESSEE, FOR FILING OF THE ANNUAL REPORTS OF THE COMPANY FOR THE FYS. 2010-11 AND 2011-12, THE ASSESSING OFFICER (AO ) COMPLETED THE ASSESSMENT U/S. 144 OF THE ACT. ON PERUSAL OF THE ANNUAL REPORTS AND P&L A/C OF THE ASSESSEE AND THE RETURN OF INCOME, AO NOTICED VARIOUS DISCREPANCIES SUCH AS THE SALES OF RS. 44,13,26,312/-, IN THE P&L A/C AS AGAINST THE SALES I N THE RETURN OF INCOME AT RS. 4,41,32,631/-. HE ALSO OBSERVED TH AT ALL THE AMOUNTS RELATING TO EXPENDITURE IN THE RETURN OF INCOME A RE MATCHING WITH THOSE REFLECTED IN THE ANNUAL REPORT AND THAT THE AMOUNT SHOWN IN THE COLUMN RELATING TO PROFIT BEFORE TA X IN THE RETURN OF INCOME IS (-) RS. 38,17,33,351/- AS AGAINS T RS. 1,54,60,290/- SHOWN IN THE P&L A/C. THEREAFTER, OBS ERVING THAT THE ASSESSEE HAS NOT FURNISHED BOOKS OF ACCOUNT, BILLS AND VOUCHERS AND ALSO THE INFORMATION CALLED FOR, HE REJE CTED THE BOOK RESULTS OF THE ASSESSEE AND PROCEEDED TO DETERMINE THE INCOME AT 6%, TAKING INTO CONSIDERATION THE FINANCIAL RESULTS FOR THE AY. 2010-11. THIS HAS RESULTED IN AN ADDITION OF RS. 2,64 ,79,579/-. 2.1. THE AO ALSO OBSERVED THAT THE ASSESSEE HAS DEPOSI TED CASH TO THE EXTENT OF RS. 89,06,000/- IN ITS BANK ACCOUNT MAI NTAINED WITH HDFC BANK DURING THE FY. 2011-12. SINCE THE ASS ESSEE DID NOT FURNISH THE SOURCES FOR THE SAME, AO ADDED THE SAM E TO THE RETURNED INCOME OF THE ASSESSEE AND BROUGHT IT TO TAX. 2.2. WHILE CONSIDERING THE BOOK PROFITS U/S. 115JB O F THE ACT, AO OBSERVED THAT THE PROFIT AS PER THE P&L A/C FOR THE FY. 2 011-12 IS RS. 1,54,60,290/- AND THEREFORE, IT SHOULD HAVE BEEN THE BASIS FOR ARRIVING AT THE BOOK PROFIT U/S. 115JB. OBSERVING THA T THE ASSESSEE HAS ADOPTED THE FIGURE OF (-) RS. 38,17,33,351/-, HE DISALLOWED THE SAME. AGGRIEVED, THE ASSESSEE WENT IN APPEAL BEFOR E THE CIT(A). ITA. NO. 661/HYD/2016 :- 3 - : 3. CIT(A) GRANTED RELIEF TO THE ASSESSEE BY OBSERVING THAT THE ACTUAL SALES OF THE ASSESSEE IS RS. 44,13,26,312/- BU T WHILE FILING E-RETURN, THERE WAS A TYPOGRAPHICAL ERROR AND THE NUME RICAL FIGURE OF 2 AT THE END OF THE FIGURE HAD BEEN OMITTED, RESULTI NG IN THE REPORT OF RS. 4,41,32,631/- ONLY AS THE FIGURE OF SA LES. THE CIT(A) ACCEPTED IT TO BE TYPOGRAPHICAL ERROR AND DELETED THE ADDITION OF THE DIFFERENCE. 3.1. AS REGARDS THE ESTIMATION OF INCOME AND ALSO DISA LLOWANCE OF LOSS, CIT(A) HAS NOT GIVEN ANY REASONS FOR DELETING TH E SAME. AGGRIEVED BY THE ORDER OF CIT(A) IN DELETING THE ADDI TION MADE ON ACCOUNT OF ESTIMATION OF PROFIT AND ALSO THE DISALLOWAN CE OF LOSS, THE REVENUE IS IN APPEAL BEFORE US. 4. LD.DR SUBMITTED THAT THE ASSESSEE HAS NOT CO-OPERATE D WITH THE AO AT THE TIME OF ASSESSMENT AND EVEN BEFORE THE CIT( A), ASSESSEE HAS NOT FILED ANY DETAILS FOR DELETING THE DI SALLOWANCES AND CONSEQUENTIAL ADDITIONS OF THE PROFIT AND LOSS CLA IMED BY THE ASSESSEE. HE SUBMITTED THAT THE CIT(A) HAS ERRED IN GRA NTING RELIEF WITHOUT VERIFYING ANY OF THE CONTENTIONS OF ASSESSEE. 5. LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HAND, S UBMITTED THAT THOUGH THE ASSESSEE COULD NOT FILE THE DETAILS BEFOR E THE AO, IT HAS FURNISHED ALL THE INFORMATION BEFORE THE CIT(A) A ND THE CIT(A) HAS CALLED FOR A REMAND REPORT FROM THE AO AND ONLY A FTER BEING SATISFIED WITH THE CONTENTIONS OF THE ASSESSEE, HAS THE ADDITION BEEN DELETED. 5.1. IN REBUTTAL, THE LD.DR HAS SUBMITTED THAT IN THE REMA ND REPORT, THE AO HAS REPORTED ONLY ON THE FIGURE OF CAS H DEPOSITS AND ITA. NO. 661/HYD/2016 :- 4 - : THEIR ACCEPTABILITY AND THERE IS NO MENTION WHAT-SO-EVE R ABOUT THE ESTIMATION OF INCOME OR ALLOWABILITY OF LOSS CLAIMED BY THE ASSESSEE. THEREFORE, ACCORDING TO HIM, THE REMAND R EPORT CANNOT BE RELIED UPON TO DELETE THE DISALLOWANCE OF LOSS AN D ESTIMATION OF INCOME. 6. HAVING REGARD TO THE RIVAL CONTENTIONS AND MATERIAL O N RECORD, WE FIND THAT THE ASSESSEE HAS NOT FILED ANY DETA ILS BEFORE THE AO EXCEPT FOR THE ANNUAL REPORTS FOR THE AY. 2011-1 2, BUT HAS FILED FULL DETAILS BEFORE THE CIT(A). THE CIT(A) HAS CALLED FOR THE REMAND REPORT BUT THE AO HAS REPORTED ONLY ON THE ALLOWA BILITY OF CASH DEPOSITS. EVEN BEFORE US, THE ASSESSEE HAS NOT F ILED ANY EVIDENCE TO SUPPORT ITS CONTENTIONS THAT THE ESTIMATION OF INCOME BY THE AO AT 6% IS NOT CORRECT OR ABOUT THE GENUINENES S OF THE LOSS CLAIMED BY THE ASSESSEE. IN VIEW OF THE SAME, WE DE EM IT FIT AND PROPER TO REMIT THE ISSUE TO THE FILE OF AO FOR DENOVO CONSIDERATION OF THESE TWO ISSUES AFTER GIVING A FAIR OPPORTUNITY OF HEARING TO THE ASSESSEE. 7. IN THE RESULT, APPEAL OF REVENUE IS ALLOWED FOR STA TISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH OCTOBER, 2017 SD/- SD/- (S. RIFAUR RAHMAN) (P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL ME MBER HYDERABAD, DATED 17 TH OCTOBER, 2017 TNMM ITA. NO. 661/HYD/2016 :- 5 - : COPY TO : 1. THE DY. COMMISSIONER OF INCOME TAX, CIRCLE- 16(2), HYDERABAD. 2. M/S. P M TELELINKS LIMITED, 1-7-241/11/D, S.D. R OAD, PARADISE, SECUNDERABAD. 3. CIT(A)-4 , HYDERABAD. 4. PR.CIT-4, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.