ITO, Ward-3(2), Hyderabad, Hyderabad V. Rayalaseema Industries (India) Ltd, Hyd, Hyderabad

ITA 686/HYD/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6244 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 12-05-2016
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: KISHORE KUMAR KABRA
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 686/HYD/2016 ASSESSMENT YEAR: 2012-13 INCOME TAX OFFICER, WARD-3(2), HYDERABAD VS M/S. RAYALASEEMA INDUSTRIES (INDIA) LTD., HYDERABAD [PAN: AACCC8836N] (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI K.J. RAO, DR FOR ASSESSEE : SHRI KISHORE KUMAR KABRA, AR DATE OF HEARING : 12-09-2016 DATE OF PRONOUNCEMENT : 21-09-2016 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS IS AN APPEAL BY REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-3, HYDERABAD, DATED 29-02-2016 DIRECTING THE ASSESSING OFFICER (AO) TO EX AMINE THE ADDITION OF CASH RECEIPTS OF RS. 63,49,111/- U/S. 68 OF THE INCOME TAX ACT [ACT]. 2. AO WHILE COMPLETING THE ASSESSMENT MADE VARI OUS ADDITIONS INTER ALIA CASH RECEIPTS SHOWN IN EXCESS OF RS. 20,000/- IN THE BOOKS OF ACCOUNT TO AN EXTENT OF RS. 63,49,111/-. OTH ER ADDITIONS MADE ARE NOT SUBJECT MATTER OF APPEAL. IT WAS SUBMITTED BY ASSESSEE THAT THESE AMOUNTS WERE RECEIVED IN CASH IN L IEU OF I.T.A. NO. 686/HYD/2016 M/S. RAYALASEEMA INDUSTRIES (INDIA) LTD., :- 2 -: VARIOUS SALE BILLS ISSUED EARLIER YEAR OR SALE RECE IPTS OF THIS YEAR. LD.AO HOWEVER, INVOKED THE PROVISIONS OF SECTION 68 O N THESE TRADE CASH RECEIPTS TREATING THEM AS CASH CREDITS. 3. DURING THE COURSE OF APPELLATE PROCEEDINGS ON THE SUBMISSIONS OF ASSESSEE, LD. CIT(A) HAD CALLED FOR REMAND REPORT AND ON RECEIPT OF SAME FROM THE AO, GAVE AN OPPORTUNIT Y TO ASSESSEE AND THEREAFTER, REMITTED THE MATTER TO THE FILE OF AO DIRECTING AS UNDER: 6.2. THE AO MADE ADDITION OF RS. 63,49,111 PERTAIN ING TO VARIOUS PARTIES AS MENTIONED BELOW ON THE GROUND TH AT THE ASSESSEE RECEIVED CASH IN EXCESS OF RS. 20,000 FROM THESE PA RTIES AND FAILED TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINE NESS OF THESE PARTIES. THEREFORE, THE SAME WERE CONSIDERED AS UN EXPLAINED CREDIT U/S. 68 OF THE IT ACT: PARTY AMOUNT (RS) M/S. AMBICA IRON & STEEL (HYD) 2,07,505 M/S. BASANTH STEELS 8,95,000 M/S. BMD STEELS 9,00,000 M/S. BM STEEL CORPN. 3,00,000 M/S. GODAVARI STEELS 2,63,510 M/S. JAI HANUMAN STEEL 4,04,317 M/S. MC IRON CORPN. 8,00,000 M/S. OM SAI STEEL 78,779 M/S. RS TRANS COM 2,00,000 M/S. SHASIHI STEELS 10,00,000 M/S. SUVERNA IRON & CO. 7,00,000 M/S. VIJAY IRON 6,00,000 TOTAL 63,49,111 6.3. THE APPELLANT SUBMITS THAT IT HAD MADE SALES T O ALL THE ABOVE PARTIES (EXCEPT FIRST PARTY) IN EARLIER YEARS AND RECEIVED THE CASH DURING THE CURRENT YEAR AGAINST THE SUPPLIES M ADE EARLIER. WITH REFERENCE TO FIRST PARTY, IT IS STATED THAT TH E SALE WERE MADE IN THE CURRENT YEAR. IT WAS FURTHER CLAIMED THAT THE SALES MADE WERE CONSIDERED AND CREDITED TO P&L A/C IN RESPECTIVE YE ARS. THEREFORE, AO IS DIRECTED TO VERIFY THE EARLIER YEAR SALES REG ISTERS, AND IF THEY WERE CREDITED TO P&L A/C, NO ADDITION CAN BE MADE T HIS YEAR, AS IT I.T.A. NO. 686/HYD/2016 M/S. RAYALASEEMA INDUSTRIES (INDIA) LTD., :- 3 -: AMOUNTS TO DOUBLE TAXATION. THEREFORE, THIS GROUND OF APPEAL IS TREATED AS PARTLY ALLOWED. 4. REVENUE IS AGGRIEVED AND RAISED THE FOLLOWING GRO UNDS: 2. THE LEARNED CIT(A) ERRED IN ASKING THE ASSESSI NG OFFICER TO VERIFY ONCE AGAIN THE ISSUE OF ADDITION OF CASH RECEIPTS OF RS. 63,49,111/- U/S. 68, IGNORING THE REMAND REPORT. 3. THE LEARNED CIT(A) ERRED IN IGNORING THE FACT TH AT DURING THE REMAND PROCEEDINGS, ASSESSEE COULD NOT SUBSTANTIATE ITS CONTENTIONS ON THE ISSUES. 4. THE LEARNED CIT(A) ERRED IN AFFORDING MULTIPLE O PPORTUNITIES TO THE ASSESSEE TO ADDUCE EVIDENCE ON THE ISSUES. GROUND NOS. 1 & 5 ARE GENERAL IN NATURE. 5. AT THE OUTSET, LD. COUNSEL SUBMITTED THAT AO HAS EXAMIN ED THE ISSUE AS PER THE DIRECTIONS OF THE LD. CIT(A) AND HE HAS VERIFIED THE SALE REGISTER, LEDGER EXTRACTS AND BILLS AND GAVE R ELIEF TO ASSESSEE ON THE ENTIRE AMOUNT. THE ORDER OF AO DT. 20- 06-2016 WAS PLACED ON RECORD TO SUBMIT THAT THE ISSUE HAS BECO ME ACADEMIC. 6. AFTER CONSIDERING THE RIVAL CONTENTIONS, WE SEE NO R EASON TO INTERFERE WITH THE ORDER OF LD. CIT(A). FIRST OF ALL , WE ARE UNABLE TO UNDERSTAND HOW THE SALE RECEIPTS ARE TREATED AS CASH C REDITS SO AS TO INVOKE THE PROVISIONS OF SECTION 68. WHEN ASSESSEE SUBMITTED THE SAME INCLUDING THE COMPLETE DETAILS OF RECEIPTS, AS LISTED OUT BY THE CIT(A) IN THE ORDER ITSELF, THE AO SHOULD HAVE ACC EPTED THE SAME IN THE REMAND REPORT. WE DO NOT FIND ANY REASON TO INTERFERE WITH THE DIRECTION OF LD. CIT(A) AS IT IS PROPER ON TH E FACTS OF THE CASE. AS AO HAS ACCEPTED THE CREDITS AS THAT OF SALE PROCEEDS OF I.T.A. NO. 686/HYD/2016 M/S. RAYALASEEMA INDUSTRIES (INDIA) LTD., :- 4 -: THIS YEAR AND ALSO OF EARLIER YEAR, THE ISSUE RAISED BY REVENUE IN THE GROUNDS ARE ACADEMIC IN NATURE. ACCORDINGLY, WE DO NOT FIND ANY MERIT IN ENTERTAINING THEM. REVENUES GROUNDS A RE REJECTED. 7. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST SEPTEMBER, 2016 SD/- SD/- (P. MADHAVI DEVI) (B.RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMB ER HYDERABAD, DATED 21 ST SEPTEMBER, 2016 TNMM COPY TO : 1. THE INCOME TAX OFFICER, WARD-3(2), HYDERABAD. 2. M/S. RAYALASEEMA INDUSTRIES (INDIA) LTD., 4-1- 970, C-BLOCK, FLAT NO. 403, AHUJA ESTATES, ABIDS, HYDERA BAD. 3. CIT(APPEALS)-3, HYDERABAD. 4. PR.CIT-3, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.