Infotech Infin & Trading P.Ltd., hyd, Hyderabad V. DIT, Cir-2(1, Hyderabad

ITA 920/HYD/2011

• Counselvise Citation: 92022514 RSA 2011
• Duration Of Justice: 2 year(s) 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 13-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D SUDHAKAR RAO
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Additional evidence
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 920/HYD/2011 ASSESSMENT YEAR : 2006-07 M/S INFOTECH INFIN & TRADING P. LTD., HYDERABAD. PAN: AAAC18882R VS. DY. COMMISSIONER OF INCOME- TAX, HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P. MURALI MOHAN RAO REVENUE BY : SHRI D. SUDHAKAR RAO DATE OF HEARING : 25-11-2013 DATE OF PRONOUNCEMENT : 29-11-2013 O R D E R PER B. RAMAKOTAIAH, A.M.: THIS IS AN APPEAL BY ASSESSEE DIRECTED AGAINST THE ORDER OF CIT(A)-II, HYDERABAD DATED 23-03-2011. ASSESSEE RAI SED 11 GROUNDS ON VARIOUS ISSUES. 2. AT THE OUTSET, THE LEARNED COUNSEL FOR ASSESSEE SUBMITTED THAT ASSESSEE COMPANY BELONGS TO SUJANA GROUP WHEREIN SE ARCH AND SEIZURE OPERATIONS WERE CARRIED OUT AND THE CASE OF ASSESSEE WAS REFERRED TO SPECIAL AUDIT. THIS GROUP WAS DE-NOTIFI ED TO VARIOUS ASSESSING OFFICERS AND, THEREFORE, ASSESSEE WAS NOT IN A POSITION TO FURNISH VARIOUS EVIDENCES BEFORE THE AO AT THE TIME OF ASSESSMENT. HE REFERRED TO THE ORDER OF THE AO WHEREIN THE AO A DMITTED THAT AS THE CASE WAS GETTING TIME BARRED EFFORTS WERE MADE TO OBTAIN BALANCE 2 ITA NO. 920/HYD/2011 M/S INFOTECH INFIN TRADING (P) LTD. SHEETS WITH RELEVANT SCHEDULES FROM CONCERNED AOS W HEREVER IT WAS POSSIBLE. SINCE THE AO DID NOT GET CONFIRMATION, OU T OF THE TOTAL AMOUNT OF RS. 43.95 CRORES CREDITS SHOWN IN THE BOO KS, THE AO ADMITTED RS. 20.34 CRORES AS GENUINE AND MADE ADDIT ION OF RS. 18.59 CRORES U/S 68 OF THE IT ACT. IN ADDITION, THE AO AL SO ASSESSED RENTAL INCOME RECEIVED AS INCOME FROM HOUSE PROPERTY AND D EPRECIATION WAS CONSEQUENTLY DISALLOWED. IT WAS FURTHER SUBMITTED T HAT COMPUTATION OF LOSS ON SALE OF SHARES WAS ALSO DONE BY THE AO WIT HOUT GIVING OPPORTUNITY TO ASSESSEE. 3. THE LEARNED COUNSEL FURTHER SUBMITTED THAT IN TH E REMAND PROCEEDINGS BEFORE THE AO WHEN REFERRED BY THE CIT( A), ASSESSEE FURNISHED CONFIRMATIONS TO THE EXTENT OF RS. 15.42 CRORES WHICH WAS ACCEPTED AS GENUINE. WITH REFERENCE TO THE BALANCE, IT WAS SUBMITTED THAT THESE ARE ALSO THE CREDITS FROM GROUP ENTITIES AND THERE WERE TRANSFERS AND MERGERS IN VARIOUS COMPANIES DETAILS OF WHICH ASSESSEE COULD NOT FURNISH BEFORE THE AO AT THE TIM E OF REMAND. THE LEARNED COUNSEL ALSO REFERRED TO THE ORDER OF CIT(A ) WHEREIN IN SPITE OF FURNISHING CONFIRMATIONS IN THE APPELLATE PROCEE DINGS LATER, THE CIT(A) REFUSED TO ENTERTAIN THE ADDITIONAL EVIDENCE . WITH REFERENCE TO OTHER ISSUES FOR TREATING THE INCOME FROM HOUSE PRO PERTY AND COMPUTATION OF CAPITAL GAIN LOSS, THE LEARNED COUNS EL REFERRED TO CIT(A)S ORDER TO SUBMIT THAT CIT(A) DISMISSED GROU NDS AS THERE WERE NO SUBMISSIONS FROM ASSESSEE. IT WAS SUBMITTED THAT DUE TO SOME ADMINISTRATIVE PROBLEMS, THE DETAILS COULD NOT BE F URNISHED AND IF AN OPPORTUNITY IS GIVEN, THESE WILL BE SUBMITTED TO TH E AO FOR DUE VERIFICATION AS ALL THE TRANSACTIONS HAVE BEEN DONE THROUGH BOOKS OF ACCOUNT. HE, THEREFORE, PRAYED THAT THE MATTER MAY BE RESTORED TO THE FILE OF THE AO/CIT(A) FOR PROPER VERIFICATION. 4. THE LEARNED DR, HOWEVER, RELIED ON THE ORDERS OF THE AUTHORITIES AND SUBMITTED THAT ASSESSEE DID NOT FURNISH INFORMA TION AND, ACCORDINGLY, ADDITIONS WERE MADE. 3 ITA NO. 920/HYD/2011 M/S INFOTECH INFIN TRADING (P) LTD. 5. WE HAVE CONSIDERED THE ISSUES AND EXAMINED THE R ECORD. AS FAR AS VARIOUS CREDITS ARE CONCERNED, THE SAME ARE GROU P TRANSACTIONS AND THE AO HIMSELF RECORDED IN PARA 5 IN ASSESSMENT ORDER THAT ASSESSEE COMPANY FILED CONFIRMATIONS FROM ALL CREDI TOR COMPANIES. IN SPITE OF THAT, THE AO WAS OF THE OPINION THAT DUE T O LACK OF CROSS VERIFICATION IN SOME CASES AND VARIATIONS IN SOME ENTRIES, THE AMOUNTS WERE ADDED AS INCOME OF ASSESSEE. ASSESSEE FURNISHED FURTHER INFORMATION IN THE COURSE OF APPELLATE PROC EEDINGS AND ON THE BASIS OF REMAND REPORT, THE LEARNED CIT(A) DELETED THE AMOUNT TO THE EXTENT OF RS. 15.42 CRORES. THE AMOUNTS SUSTAINED T O THE EXTENT OF RS. 3.17 CRORES ARE NOTHING BUT THE DISCREPANCIES F OUND BETWEEN THE ACCOUNTS OF ASSESSEE AND ACCOUNTS OF OTHER PARTIES, AS VERIFIED FROM THE RECORDS OF ASSESSING OFFICERS. AS SEEN FROM THE CONFIRMATIONS FILED BY THE RESPECTIVE PARTIES, THERE WERE TRANSFE RS OF ENTRIES FROM ONE COMPANY TO ANOTHER COMPANY, WHICH HAVE NOT BEEN EXAMINED BY THE AO AT ALL. NOT ONLY THAT EVEN WHEN THE FURTHER INFORMATION WAS FURNISHED BEFORE THE CIT(A), THE CIT(A) REFUSED TO ENTERTAIN THE SAME AS CAN BE SEEN FROM PARA 6.1 OF CIT(A)S ORDER. WE ARE OF THE OPINION THAT ASSESSEE DESERVES ANOTHER OPPORTUNITY TO EXPLA IN THE TRANSACTIONS, PARTICULARLY, IN THE CONTEXT THAT MAN Y OF THE CREDITS PERTAIN TO EARLIER YEARS. ACCORDINGLY, WE ARE OF TH E OPINION THAT THE ISSUES RAISED IN THIS APPEAL ARE REQUIRED TO BE RE- EXAMINED BY THE AO, AS ASSESSEE WAS NOT GIVEN DUE OPPORTUNITY. WITH REFERENCE TO RENTAL INCOME RECEIVED BUT ASSESSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND ALSO COMPUTATION OF SHORT-TERM LOSS AND LONG TERM LOSS, WHICH EVEN THE CIT(A) FOUND THAT THERE A RE MISTAKES VIDE PARA 10 OF THE IMPUGNED ORDER, ARE REQUIRED TO BE V ERIFIED BY THE AO WITH CLAIMS IN VARIOUS YEARS. THEREFORE, AFTER CON SIDERING THE TOTALITY OF THE FACTS OF THE CASE, WE ARE OF THE OPINION THA T ORDERS ARE TO BE SET ASIDE AND RESTORE ALL THE ISSUES RAISED IN THE GROUNDS TO THE FILE OF AO FOR FRESH EXAMINATION AND TO DECIDE THE SAME IN ACCORDANCE WITH LAW AND FACTS, AFTER PROVIDING REASONABLE OPPORTUNI TY OF BEING HEARD 4 ITA NO. 920/HYD/2011 M/S INFOTECH INFIN TRADING (P) LTD. TO THE ASSESSEE. ASSESSEE IS DIRECTED TO PUT-FORTH THE NECESSARY MATERIAL/EVIDENCE IF ANY, IN SUPPORT OF ITS CLAIMS. WE ORDER ACCORDINGLY. 6. IN THE RESULT, APPEAL OF ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 29 TH NOVEMBER, 2013. SD/- SD/- (SAKTIJIT DEY) (B. RAMAKOTAIA H) JUDICIAL MEMBER ACCOU NTANT MEMBER HYDERABAD, DATED: 29 TH NOVEMBER, 2013. KV COPY TO:- 1) M/S INFOTECH INFIN & TRADING P. LTD., C/O P. MUR ALI & CO., CAS., 6-3-655/2/3, I FLOOR, SOMAJIGUDA, HYDERABAD 82. 2) DCIT, CIRCLE-2(1), HYDERABAD. 3) CIT(A)-III, HYDERABAD 4) CIT-II, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A .T., HYDERABAD.