Dy. Commissioner of Income Tax , Circle-16(2), Hyderabad V. Madhava Hytech Engineers Private Limited , Hyderabad

ITA 78/Hyd/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 0486 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2021
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB-B
• Assessment Year: 2013-2014
• Appeal Filed On: 08-01-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJIV RANKA
• Assessee Lawyers: PACHARI MURALI
• Keywords: Unexplained cash credit; Additional evidence
• Section: 143(3); 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO. 78/HYD/2018 A.Y. 2013 - 14 DCIT, CIRCLE - 16(2), HYDERABAD. VS. MADHAVA HYTECH ENGINEERS PRIVATE LIMITED, HYDERABAD. PAN:AABCM 3921 A (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI PACHARI MURALI, AR REVENUE BY: SHRI RAJIV RANKA, DR DATE OF HEARING: 08/07/2021 DATE OF PRONOUNCEMENT: 14 /07/2021 ORDER PER A. MOHAN ALANKAMONY, A.M: THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) - 4, HYDERABAD IN APPEAL NO. 0241/16 - 17/ACIT, CIR.16(2)/CIT(A) - 4/HYD/17 - 18, DATED 20/10/2017 PASSED U/S. 143(3) R.W.S 250(6) OF THE ACT FOR THE A.Y. 2013 - 1 4. 2. THE REVENUE HAS RAISED FOUR GROUNDS IN ITS APPEAL AND THEY ARE EXTRACTED HEREIN BELOW FOR REFERENCE: 2 1. THE LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE OF INCREASE / DECREASE IN INVENTORIES / WIP OF RS.6,00,00,359/ - . 2. THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED CASH CREDIT OF RS. 1,02,58,240/ - U/S. 68 OF THE IT ACT. 3. THE LD. CIT(A) ERRED IN NOT GIVING AN OPPORTUNITY TO THE A.O. FOR VERIFICATION OF ADDITIONAL EVIDENCE ON THE ABOVE ISSUES IN VIOLATION OF RULE 46A OF TH E INCOME TAX RULES. 4. ANY OTHER GROUND THAT MAY BE URGED AT TIME OF HEARING. 3. AT THE OUTSET, THE LD. D R SUBMITTED BEFORE US THAT THE ASSESSEE HAS FILED ADDITIONAL EVIDENCE BEFORE THE LD. CIT(A) AND THE LD. CIT(A) GRANTED RELIEF TO THE ASSESSEE IN RESPECT OF THE CERTAIN DISALLOWANCES MADE BY THE LD. AO IE., (I) DISALLOWANCE OF RS. 6,00,00,359/ - TOWARDS IN CREASE / DECREASE IN INVENTORIES / WIP AND (II) ADDITION OF RS. 1,56,70,443/ - TOWARDS UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT. FURTHER, THE LD. DR SUBMITTED THAT THE LD. CIT(A) HAD NOT PROVIDED ANY OPPORTUNITY TO THE LD. A.O. FOR VERIFICATION OF THE AD DITIONAL EVIDENCE SUBMITTED BEFORE HIM WHICH IS IN VIOLATION OF RULE 46A OF THE ACT. T HEREFORE , THE LD. DR SUBMITTED THAT THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE LD. AO FOR VERIFICATION OF THE ADDITIONAL EVIDENCE . ON THE OTHER HAND, T HE LD. AR COULD NOT SUCCESSFULLY CONTROVERT TO THE SUBMISSIONS OF THE LD. DR EXCEPT STATING THAT SINCE THE ADDITIONAL EVIDENCE SUBMITTED BY THE ASSESSEE BEFORE THE LD. CIT(A) RELATES TO THE SUBSTANTIAL ADDITIONS MADE BY THE LD. AO AND THE SAME WERE THOROUGHLY VERIFIED BY THE LD. CIT(A) WHILE 3 GRANTING RELIEF TO THE ASSESSEE AND THEREFORE, THE DECISION OF THE LD. CIT(A) MAY BE SUSTAINED. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. ON PERUSING THE ORDER OF THE LD. REVENUE AUTHORITIES, WE FIND THAT THE ASSESSEE HA D FURNISHED ADDITIONAL EVIDENCE BEFORE THE LD. CIT(A) IN RESPECT OF THE ADDITIONS MADE BY THE LD. A.O. AND THE LD. CIT(A) WITHOUT GRANTING ANY OPPORTUNITY TO THE LD. A.O. FOR VERIFYING THE ADDITIONA L EVIDENCE, ADMITTED THE SAME AND GRANTED RELIEF TO THE ASSESSEE. FURTHER IT IS APPARENT THAT A S PER RULE 46A(3) OF THE IT RULES, THE LD. CIT(A) SHALL NOT TAKE INTO ACCOUNT ANY EVIDENCE PRODUCED BEFORE HIM UNLESS THE ASSESSING OFFICER HAS BEEN ALLOWED A R EASONABLE OPPORTUNITY TO VERIFY AND COMMENT . THIS LAPSE ON THE PART OF LD. CIT(A) IS NOT APPRECIABLE. THEREFORE, KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE CASE, IN THE INTEREST OF JUSTICE, WE HEREBY REMIT THE MATTER BACK TO THE FILE OF THE LD. AO FOR DE - NOVO CONSIDERATION WITH DIRECTION TO ADMIT , EXAMINE AND VERIFY THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE BEFORE THE LD. CIT(A) AND ANY OTHER EVIDENCE FILED AT THE TIME OF ASSESSMENT PROCEEDINGS CONSEQUENT TO THIS REMAND AND THEREAFTER PASS AP PROPRIATE ORDER IN ACCORDANCE WITH LAW AND MERIT. WE ALSO CAUTION THE ASSESSEE TO PROMPTLY CO - OPERATE 4 BEFORE THE LD. REVENUE AUTHORITIES FAILING WHICH THEY SHALL BE AT LIBERTY TO PASS APPROPRIATE ORDER BASED ON THE MATERIALS ON RECORD. 6. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES AS INDICATED HEREINABOVE. PRONOUNCED IN THE OPEN COURT ON 14 TH JULY, 2021. SD/ - S D/ - (P. MADHAVI DEVI) ( A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 14 TH JULY , 2021. OKK COPY TO: - 1) M/S. MADHAVA HYTECH ENGINEERS PRIVATE LIMITED, 501, DOWN TOWN, NEAR NTR PARK, HYDERABAD 500082. 2) DCIT, CIRCLE - 16(2), 2 ND FLOOR, B - BLOCK, IT TOWERS, AC GUARDS, MASAB TANK, HYDERABAD. 3) THE CIT(A) - 4, HYDERABAD. 4) THE PR. CIT - 4, HYDERABAD. 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE 5