Omicron Bio-Genesis Ltd, Hyderabad V. DCIT, Hyderabad

ITA 88/HYD/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6273 (ITAT-HYDERABAD)
• Duration Of Justice: 5 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 21-07-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 19-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Depreciation; Additional evidence; Corroborative evidences
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 88/HYD/2011 ASSESSMENT YEAR: 2007-08 OMICRON BIO-GENESIS LTD., HYDERABAD. PAN AAACJ7423K VS. DY. COMMISSIONER OF INCOME- TAX, CIRCLE 16(3), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P. MURALI MOHAN RAO REVENUE BY : SHRI K.J. RAO DATE OF HEARING 21-07-2016 DATE OF PRONOUNCEMENT 27 -07-2016 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST T HE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX(A) - V, HYDE RABAD FOR AY 2007-08. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE COMPANY ENGAGED IN TRADING OF STEEL, FILED ITS RETURN OF IN COME FOR THE AY 2007- 08 ON 01/02/2008 ADMITTING TOTAL INCOME OF RS. 18,2 5,300/-. THE AO COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT BY M AKING THE FOLLOWING ADDITIONS: 1. DISALLOWANCE U/S 40(A)(IA) AMOUNTING TO RS. 5,2 1,000/- 2. DISALLOWANCE OF DEPRECIATION ON ADDITION TO COM PUTERS AMOUNTING TO RS. 42,00,072/-. 3. AS REGARDS THE DISALLOWANCE U/S 40(A)(IA) AMOUNT ING TO RS. 5,21,000/-, THE AO NOTICED THAT THE ASSESSEE HAD MA DE PAYMENT OF CONSULTANCY CHARGES TO THE FOLLOWING PERSONS: 2 ITA NO. 88/H/11 OMICRON BIO-GENESIS LTD., HYD. B.A. KISHORE RS. 3,80,000 N. DAYASAGAR RS., 41,000 S.R. ASHOK RS. 1,00,000 RS. 5,21,000 ========= SINCE THE ASSESSEE COULD NOT PROVIDE EVIDENCE TO SH OW THAT THE TDS WAS DEDUCTED AND PAID TO THE GOVT. ACCOUNT, IN TIME , THE AO MADE THE ADDITION OF THE SAID AMOUNT U/S 40(A)(IA) OF TH E ACT. 4. ON AN APPEAL, BEFORE THE CIT(A) THE ASSESSEE REL IED ON THE DECISION OF THE ITAT IN THE CASE OF M/S TEJA CONSTR UCTIONS WHEREIN IT WAS HELD THAT THE PROVISIONS OF SECTION 40(A)(IA) W OULD BE ATTRACTED ONLY WITH RESPECT TO AMOUNTS WHERE THE EXPENDITURE IS PAYABLE. THE ASSESSEE CONTENDED THAT THE AMOUNTS HAD BEEN PAID I N ITS CASE. 5. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E, THE CIT(A) OBSERVED THAT THE ITAT, HYDERABAD HAD REINTERPRETED THE WORDS PAID AND PAYABLE IN SECTION 40(A)(IA) OF THE ACT IN TH E CASE OF M/S PARNIKA CONSTRUCTIONS PVT. LTD. IN ITA NO. 1081/HYD/09, DAT ED 16/07/2010 FOR AY 2005-06. FOLLOWING THE SAID DECISION, THE CIT(A) HELD THAT THE M/S TEJA CONSTRUCTIONS CASE IS NOT APPLICABLE TO THE C ASE OF THE ASSESSEE AND, THEREFORE, HE CONFIRMED THE DISALLOWANCE MADE BY THE AO U/S 40(A)(IA) OF THE ACT. 6. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESS EE IS IN APPEAL BEFORE US. 7. GROUND NOS. 1 TO 8 ARE PERTAINING TO THE DISALLO WANCE OF RS. 5,21,000/- U/S 40(A)(IA) OF THE ACT. 8. BEFORE US, THE LD. AR SUBMITTED THAT THE ASSESSE E COMPANY HAS ALREADY DEDUCTED THE TDS ON THE EXPENDITURE INCURRE D TOWARDS CONSULTANCY CHARGES WITHIN THE STIPULATED TIME AND REMITTED THE SAME TO THE CENTRAL GOVT. IT IS SUBMITTED THAT THE PROOF OF PAYMENT ALONG WITH ALL THE DETAILS HAVE ALREADY BEEN FURNISHED TO THE AO AT THE TIME OF ASSESSMENT, BUT, FAILED TO SUBMIT THE PAYMENT CH ALLANS. HENCE, THE AO HAS DISALLOWED AN AMOUNT OF RS. 5,21,000/- U/S 4 0(A)(IA) WHICH IS 3 ITA NO. 88/H/11 OMICRON BIO-GENESIS LTD., HYD. NOT CORRECT AND NOT JUSTIFIED. LD. AR SUBMITTED THA T THE ASSESSEE COMPANY HAS ALSO FILED 154 PETITION TO THE AO MENTI ONING THE DETAILS OF TDS PAYMENT ALONG WITH PROOF OF CHALLAN ON 28 TH APRIL, 2010 FOR RECTIFICATION OF THE ORDER. HE RELIED ON THE DECISI ONS OF M/S TEJA CONSTRUCTIONS VS. ACIT AND JAIPUR VIDYUT NIGAM LD. VS. DCIT AS WELL AS CBDT CIRCULAR NO. 5 OF 2005, DATED 25 TH JULY, 2005 IN SUPPORT OF ASSESSEES CASE. THE LD. AR FILED ADDITIONAL EVI DENCES BEFORE US, NAMELY, COPY OF 154 PETITION MADE TO DCIT FOR THE A Y 2007-08, DT. 28/04/10 ALONG WITH SUPPORTING EVIDENCE OF PAYMENT OF TDS CHALLANS. 9. THE LD. DR, ON THE OTHER HAND, SUBMITTED THAT TH E EVIDENCES FOR TDS DEDUCTION WERE NOT SUBMITTED BY THE ASSESSEE BE FORE THE LOWER AUTHORITIES EVEN THOUGH SUFFICIENT OPPORTUNITY WAS BEEN GIVEN. 10. CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL FACTS ON RECORD AS WELL AS THE ORDERS OF R EVENUE AUTHORITIES. THE CONTENTION OF THE ASSESSEE IS THAT EVEN THOUGH THE PROOF OF PAYMENT ALONG WITH ALL THE DETAILS FURNISHED BEFORE THE AO, THE AO HAS NOT CONSIDERED THE SAME AND DISALLOWED THE AMOU NT U/S 40(A)(IA). THE ASSESSEE ALSO FILED 154 PETITION MENTIONING THE DETAILS OF TDS PAYMENT ALONG WITH PROOF OF CHALLAN FOR RECTIFICATI ON OF THE ORDER. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE, WE ARE INCLINED TO REMIT THE ISSUE IN DISPUTE TO THE FILE OF THE AO WI TH A DIRECTION TO DECIDE THE ISSUE AFTER CONSIDERING THE EVIDENCES FI LED BY THE ASSESSEE IN ACCORDANCE WITH LAW AFTER PROVIDING REASONABLE O PPORTUNITY OF BEING HEARD TO THE ASSESSEE IN THE MATTER. WE ORDER ACCOR DINGLY. 11. AS REGARDS THE NEXT ISSUE PERTAINING TO THE DI SALLOWANCE OF DEPRECIATION MADE WITH RESPECT TO COMPUTERS AMOUNTI NG TO RS. 42,00,072/-, THE AO FOUND THAT DURING THE YEAR, THE ASSESSEE HAD MADE ADDITIONS TO COMPUTERS AMOUNTING TO RS. 70,00, 120/-. THE AO DISALLOWED THE DEPRECIATION CLAIMED BY THE ASSESSEE ON THE GROUND THAT IN SPITE OF OPPORTUNITIES AND SHOW CAUSE NOTIC ES, THE ASSESSEE COULD NOT FURNISH PROOF OF ITS CLAIM REGARDING ADDI TIONS TO THE COMPUTERS. 4 ITA NO. 88/H/11 OMICRON BIO-GENESIS LTD., HYD. 12. BEFORE THE CIT(A), THE ASSESSEE CONTENDED THAT IT HAS IN ITS POSSESSION ALL THE INVOICES PERTAINING TO THE PURCH ASE OF COMPUTERS. HOWEVER, THE CIT(A) HELD THAT NO INVOICE WAS PRESEN TED BEFORE HIM NOR HAD ANY INVOICE BEEN PRESENTED BEFORE THE AO, H ENCE, HE CONFIRMED THE ACTION OF THE AO. 13. BEFORE US, THE ASSESSEE RAISED GROUND NOS. 9 TO 12 REGARDING THIS ISSUE AND SUBMITTED THAT THE ASSESSEE IS HAVIN G ALL THE INVOICES RELATING TO THE ADDITIONS MADE DURING THE AY AND TH E SAME MAY BE ALLOWED TO ADMIT AS ADDITIONAL EVIDENCE. 14. THE LD. DR, ON THE OTHER HAND SUBMITTED THAT TH OUGH OPPORTUNITY WAS GIVEN TO ASSESSEE, THE ASSESSEE FAILED TO SUBMI T THE EVIDENCES IN SUPPORT OF ITS CLAIM. 15. CONSIDERED THE SUBMISSIONS OF THE PARTIES AND P ERUSED THE MATERIAL FACTS ON RECORD. WE ARE OF THE VIEW THAT S INCE THE ASSESSEE IS HAVING ALL THE RELEVANT DOCUMENTS LIKE INVOICES FOR PURCHASE OF COMPUTERS AND THE SAME WERE SUBMITTED BEFORE US, WE REMIT THIS ISSUE ALSO TO THE FILE OF THE AO WITH A DIRECTION T O EXAMINE THE EVIDENCES SUBMITTED BY THE ASSESSEE AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER PROVIDING REASONABLE OPPO RTUNITY TO THE ASSESSEE. 16. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATE D AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 27 TH JULY, 2016 SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RAHM AN) JUDICIAL MEMBER A CCOUNTANT MEMBER HYDERABAD, DATED: 27 TH JULY, 2016 KV 5 ITA NO. 88/H/11 OMICRON BIO-GENESIS LTD., HYD. COPY TO:- 1) OMICRON BIO-GENESIS LTD., C/O P. MURALI & CO., CAS., 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYD. 500 482. 2) DCIT, CIRCLE 16(3), HYD. 3) CIT(A) - V, HYDERABAD 4 CIT - IV , HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD.