Dy.CIT, Central Circle-3, Hyderabad V. M/s IRMAC Services India Limited, Hyderabad

ITA 667/HYD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82362 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 06-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D SUDHAKAR RAO
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICAL MEMBER ITA.NO.667/HYD/2013 ASSESSMENT YEAR 2007-08 DCIT, CENTRAL CIRCLE-3 HYDERABAD. VS. M/S. IRMAC SERVICES INDIA LTD., HYDERABAD 500 033. PAN-AAACO-7389-D (APPELLANT) (RESPONDENT) FOR REVENUE : MR. D. SUDHAKAR RAO FOR ASSESSEE : -NONE- DATE OF HEARING : 03.09.2014 DATE OF PRONOUNCEMENT : 12.09.2014 ORDER PER B. RAMAKOTAIAH, A.M. THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE OR DER OF THE LD. CIT(A)-III, HYDERABAD DATED 14 TH NOVEMBER, 2012 IN WHICH REVENUE HAS RAISED THE FOLLOWING GROUNDS : 1. THE LD. CIT(A) ERRED BOTH IN FACTS AND IN LAW IN D ELETING THE ADDITIONS MADE. 2. THE LD. CIT(A) FAILED TO APPRECIATE THE ADDITION OF EXPENDITURE TOWARDS EVICTION CHARGES AND DEVELOPMENT CHARGES OF RS.44,61,25,000 IN THE HANDS OF M/S. IRMAC SERVICES INDIA LTD. ON PROTECTIVE BASIS FOR THE A.Y. 2007-08. 3. THE LD. CIT(A) HAS DELETED THE ADDITION WITH REGARD TO THE LAND TRANSACTION ON PROTECTIVE BASIS, ON THE GROUND THAT SUBSTANTIVE ADDITION MADE IN THE HANDS OF M/S. KNR CONSTRUCTIONS LTD. HAS BEEN UPHELD. 4. THE APPEAL OF M/S. KNR CONSTRUCTIONS LTD. FOR A.Y. 2007-08 AGAINST THE ORDER OF CIT(A) IS BEFORE ITAT B. 2 ITA.NO.667/HYD/2013 M/S. IRMAC SERVICES INDIA LTD., HYDERABAD. 5. THUS, IT IS PRAYED BEFORE HONBLE ITAT THAT IN THE EVENT OF DELETION OF THE ADDITION IN THE HANDS OF M/S. KNR CONSTRUCTIONS LTD., DIRECTIONS MAY PLEASE BE GIVEN TO TAX THE SAME IN THE HANDS OF M/S. IRMAC SERVICES INDIA LTD. , HYDERABAD FOR THE A.Y. 2007-08. 2. WHEN THE CASE WAS POSTED, NONE APPEARED ON BEHA LF OF ASSESSEE BUT REPRESENTATIVE FROM ASSESSEE KNR CONST RUCTIONS LTD., PLEADED THAT THEY MAY BE TAKEN AS INTERVENER AS ANY DECISION IN THIS CASE WILL EFFECT THEIR CASE. HOWEVER, THERE IS NO PROVISION TO TAKE ANY OTHER PERSON AS INTERVENER IN THE PRESENT SCHEME OF APPEALS BEFORE THE ITAT. THEREFORE, THE PLEA WAS NO T ACCEPTED. HOWEVER, AS SEEN FROM THE ORDER PASSED IN THE CASE OF M/S. KNR CONSTRUCTIONS LTD., FOR THE IMPUGNED ASSESSMENT YEA R IN WHICH ASSESSEES APPEAL IN ITA.NO.44/HYD/2013 DATED 21.06 .2013 WAS ALSO DISPOSED OFF, WITHOUT CLUBBING WITH REVENUE AP PEAL BEING CONSIDERED NOW, THE APPEAL OF ASSESSEE WAS SET ASID E TO THE FILE OF CIT(A) BY OBSERVING AS UNDER : 10. IN THIS APPEAL BY ASSESSEE, IN WHOSE HANDS PROTECTIVE ADDITION CORRESPONDING ADDITION ON SUBST ANTIVE BASIS HAS BEEN MADE IN THE CASE OF M/S. K.N.R. CONSTRUCTI ONS, EFFECTIVE GROUNDS FO ASSESSEE READ AS FOLLOWS- THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS IN LA W, CONTRARY TO FACTS AND AGAINST THE PRINCIPLES OF EQUITY AND NATURAL JUSTIC E. 02. THE LOWER AUTHORITIES FAILED TO APPRECIATE THE FACT THAT THE DISALLOWANCE OF DEPRECIATION RS 18,01,855 AGINST TH E CLAIM OF RS. 35,88,530.80/REPRESENTS DEPRECIATION ON WDV AT THE BEGINNING OF THE YEAR AND NO EXCESS DEPRECIATION WAS CLAIMED ON FIXE D ASSETS AS ALLEGED BY LOWER AUTHORITIES. 03. NON CONSIDERATION OF UNABSORBED DEPRECIATION LOSS OF RS. 22,02,058/- ALLEGING IT TO BE BUSINESS LOSS IS AGAI NST FACTS WHICH IS AVAILABLE ON RECORD AND THEREFORE DISALLOWANCE OF C ARRY FORWARD DEPRECIATION AS BUSINESS LOSS IS UNJUSTIFIED. 04. THE ADDITION OF RS 1,02,00,000/- INVOKING THE P ROVISIONS OF SEC 68 EVEN AFTER SHOWING THAT THE AMOUNTS WERE RECEIVED T HROUGH ACCOUNT PAYEE CHEQUES FROM LIMITED COMPANIES FOR THE BUSINE SS PURPOSE, EVIDENT FROM BANK STATEMENTS, APART FROM THE FACT THAT PART OF THE LOAN WERE 3 ITA.NO.667/HYD/2013 M/S. IRMAC SERVICES INDIA LTD., HYDERABAD. REPAID AND, THEREFORE THE VERY ADDITION IS UNSUSTAI NABLE IN LAW. 05. THE LOWER AUTHORITIES OUGHT TO HAVE SET OFF THE ENTIRE CARRY FORWARD LOSS AGAINST THE INCOME ASSESSED, AS THE APPELLANT CLAIMED CARRY FORWARD LOSS TO THE EXTENT OF INCOME DISCLOSED AND THEREFOR E THE CARRY FORWARD LOSS AMOUNTING TO RS. 13,70,793/SHALL BE SET OFF. 06. THE APPELLANT CRAVE TO SUBMIT THAT, ALL THE FAC TS AND CONTENTIONS RAISED IN THE STATEMENT OF FACTS ACCOMPANIED BY THESE GROU NDS SHALL BE TREATED AS PART AND PARCEL OF THESE GROUNDS AND SHALL BE DE ALT WITH. . 11. WE HEARD BOTH SIDES AND PERUSED THE IMPU GNED ORDERS OF THE LOWER AUTHORITIES. IT HAS BEEN THE C ONTENTION OF THE LEARNED COUNSEL FOR ASSESSEE BEFORE US, THAT THE CI T(A) HAS DISPOSED OF THE ABOVE ISSUE IN APPEAL BEFORE HIM EX -PARTE, WITHOUT GIVING ADEQUATE OPPORTUNITY OF HEARING TO ASSESSEE. WE FIND MERIT IN THIS CONTENTION OF ASSESSEE. IN THE INTERESTS O F JUSTICE, WE ACCORDINGLY SET ASIDE THE IMPUGNED ISSUE TO THE FIL E OF CIT(A) WITH A DIRECTION TO GIVE TO GIVE ADEQUATE OPPORTUNITY OF HEARING TO ASSESSEE, AND RE-ADJUDICATE ON THE ISSUES INVOLVED IN THE ABOVE GROUNDS BEFORE HIM, IN ACCORDANCE WITH LAW AND AFTE R CONSIDERING ALL THE RELEVANT ASPECTS OF THE MATTER. ASSESSEE TO O IS DIRECTED TO COOPERATE BY COMPLYING WITH THE NOTICES OF THE CIT( A), AND ENABLE HIM IN THE EARLY DISPOSAL OF THE APPEAL, FAILING WH ICH THE CIT(A) WOULD BE AT LIBERTY TO DRAW HIS OWN INFERENCES AND DISPOSE OF THE APPEAL ONCE AGAIN EX-PARTE. WE DIRECT ACCORDINGLY . 3. SINCE APPEAL BY ASSESSEE WAS ALREADY RESTORED T O THE FILE OF CIT(A), WE DEEM IT FIT TO RESTORE THE ISSUE S AS RAISED BY THE REVENUE TO THE FILE OF LD. CIT(A) FOR FRESH ADJUDIC ATION AS DIRECTED IN THE AFORESAID ORDER. ACCORDINGLY, REVENUE GROUND S ARE ALLOWED FOR STATISTICAL PURPOSES. 4. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 12.09.2014. SD/- SD/- (SAKTIJIT DEY) (B.RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 12 TH SEPTEMBER, 2014 VBP/- 4 ITA.NO.667/HYD/2013 M/S. IRMAC SERVICES INDIA LTD., HYDERABAD. COPY TO 1. DCIT, CENTRAL CIRCLE-3, 8 TH FLOOR, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD. 2. M/S. IRMAC SERVICES INDIA LTD. 8-2-293/82, BE/43 -A, ROAD NO.71, JUBILEE HILLS, HYDERABAD 500 033. 3. CIT(A)-III, HYDERABAD. 4. CIT-II, HYDERABAD 5. D.R. B BENCH, ITAT, HYDERABAD.