Elite Recreations and Resorts Private Limited, Hyderabad V. Income Tax Officer, Ward-17(2), Hyderabad

ITA 948/Hyd/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1099 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Assessment Year: 2015-2016
• Appeal Filed On: 04-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P.MURALI MOHANA RAO
• Keywords: Opportunity of being heard; Additional evidence; Set aside
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER I.T.A. NO. 948/HYD/2019 ASSESSMENT YEAR: 2015-16 M/S.ELITE RECREATIONS AND RESORTS PRIVATE LIMITED, HYDERABAD [PAN: AACCE5121B] VS INCOME TAX OFFICER, WARD-17(2), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI P.MURALI MOHANA RAO, AR FOR REVENUE : SHRI ROHIT MUJUMDAR, DR DATE OF HEARING : 15-12-2020 DATE OF PRONOUNCEMENT : 17-12-2020 O R D E R PER A.MOHAN ALANKAMONY, A.M. : THIS APPEAL IS FILED BY THE ASSESSEE AGGRIEVED BY TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS )1, HYDERABAD, IN APPEAL NO.0201/2017-18/ITO, WARD-17(2 ), HYD/CIT(A)-1/HYD/2018-19, DATED 28-03-2019. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PR IVATE LTD., COMPANY, ENGAGED IN THE BUSINESS OF PROVIDING RECREATION TO ITS MEMBERS, FILED ITS RETURN OF INCOME FOR THE AY.2 015-16 ON 28-09-2015 ADMITTING LOSS OF RS.25,08,631/-. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS. THEREAFTER NOTICES U/S.143(2) & 142(1) OF THE [ACT], D T.21-03- 2016 & DT.17-01-2017 RESPECTIVELY, WERE ISSUED TO THE ASSESSEE. IN RESPONSE TO THE ABOVE NOTICES, THE AUTHORIS ED ITA NO.948/HYD/2019 :- 2 -: REPRESENTATIVE OF THE ASSESSEE SUBMITTED THE INFORMATION CALLED-FOR. 2.1. THEREAFTER THE LD.AO COMPLETED THE ASSESSMENT U/S.143(3) OF THE ACT ON 18-12-2017 BY DETERMINING THE TOTAL LOSS AT RS.2,477/- WHEREIN AN AMOUNT OF RS.36,58,417/ - (1,92,717 + 34,65,700) WAS DISALLOWED TOWARDS UNEXP LAINED CASH DEPOSITS AND UNEXPLAINED LOANS. 3. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). HOWEVER, THE LD.AR FAILED TO APPEAR BEFORE THE LD.CIT( A) IN HIS PROCEEDINGS. THEREFORE, THE LD.CIT(A) PASSED AN EX-PARTE ORDER, WHEREIN HE HAS SUSTAINED THE ADDITION OF RS.1,92,717/- TOWARDS UNEXPLAINED CASH DEPOSITS, BECAUSE THE DEPOS ITS WERE NOT SUBSTANTIATED WITH COGENT EVIDENCE. HOWEVER, WITH R ESPECT TO ADDITION MADE TOWARDS UNEXPLAINED LOANS, AS THE ASS ESSEE HAS FURNISHED CERTAIN DETAILS AND CONFIRMATION LETTERS, THE LD.CIT(A) REMITTED THE MATTER BACK TO THE FILE OF LD.AO FO R VERIFICATION. 4. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), THE ASSES SEE HAS FILED THIS APPEAL BEFORE THE TRIBUNAL, RAISING THE FO LLOWING GROUNDS: 1. THE LD.CIT(A) ERRED BOTH ON FACTS AND IN LAW. 2. A. THE LD.CIT(A) ERRED IN CONFIRMING THE ADDITIO N MADE OF RS.1,92,717/- REPRESENTING CASH DEPOSITS IN BANK AC COUNT. B. THE LD.CIT(A) GROSSLY ERRED IN APPRECIATING THE FACT THAT ALL THE CASH DEPOSITS INCLUDING THE IMPUGNED AMOUNT OF RS.1 ,92,717/- MADE INTO BANK ACCOUNT OF THE ASSESSEE REPRESENT RECEIPT S FROM ITS CUSTOMERS ONLY. ITA NO.948/HYD/2019 :- 3 -: C. THE LD.CIT(A) OUGHT TO HAVE APPRECIATED THAT THE ASSESSING OFFICER, BEFORE MAKING THE ADDITION OF RS.1,92,717/- HAS NOT GIVEN A REASONABLE OPPORTUNITY OF BEING HEARD. D. THE LD.CIT(A) OUGHT TO HAVE APPRECIATED THAT THE AMOUNT OF RS.1,92,717/- HAS ALREADY BEEN OFFERED TO TAX IN TH E RETURN OF INCOME FILED. 3. A. THE LD.CIT(A) OUGHT TO HAVE APPRECIATED THAT THE ASSESSING OFFICER DURING THE COURSE OF SCRUTINY HAS NOT CALLE D FOR ANY DETAILS WITH REGARD TO THE UNSECURED LOANS OF RS.34,65,700/ -. B. THE LD.CIT(A) OUGHT TO HAVE ALLOWED THE GROUNDS OF APPEAL WITH REGARD TO THE ADDITION MADE OF RS.34,65,700/- REPRE SENTING UNSECURED LOANS. C. THE LD.CIT(A) ERRED IN NOT DELETING THE ADDITION MADE OF RS.34,65,700/- IN VIEW OF THE CONFIRMATIONS FILED. 4. THE APPELLANT MAY, ADD OR ALTER OR AMEND OR MODI FY OR SUBSTITUTE OR DELETE AND/OR RESCIND ALL OR ANY OF THE GROUNDS OF APPEAL AT ANY TIME BEFORE OR AT THE TIME OF HEARING OF THE APPEAL . 5. AT THE OUTSET, LD.AR SUBMITTED BEFORE US THAT THE LD.AO HAS NOT OFFERED PROPER OPPORTUNITY TO THE ASSESSEE AND PASSED EX-PARTE ORDER . IT WAS FURTHER SUBMITTED THAT ASSESSEE- COMPANY HAD INCURRED HUGE LOSSES AND IS UNDER THE P ROCESS OF CLOSING DOWN ITS BUSINESS. IT WAS FURTHER SUBMITTED THAT, THE ASSESSEE IS NOW IN POSSESSION OF THE CONFIRMATION LETT ERS FROM THE UNSECURED LOAN CREDITORS. THEREFORE LD.AR REQUEST ED THE CASE TO BE REMITTED BACK TO THE FILE OF LD.AO FOR FRESH CONSIDERATION. 6. THE LD.DR VEHEMENTLY OPPOSED THE SUBMISSIONS OF THE LD.AR AND REQUESTED FOR CONFIRMING THE ORDER OF THE L D.CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS THROUGH VIDEO CONFERENCE AND CAREFULLY PERUSED THE MATERIAL ON RECO RD. ON VERIFYING THE FACTS OF THE CASE, WE FIND THAT, NEITHER THE ITA NO.948/HYD/2019 :- 4 -: ASSESSEE NOR ITS AUTHORISED REPRESENTATIVE APPEARED BE FORE THE LD.CIT(A) DURING THE PROCEEDINGS BEFORE HIM, THOUGH SEVERAL OPPORTUNITIES WERE PROVIDED. THEREFORE, THE ARGUMENT ADVANCED BY THE LD.AR THAT PROPER OPPORTUNITY OF BEING HEARD WAS NOT PROVIDED TO THE ASSESSEE BY THE LD.CIT(A), DOES NOT HAVE ANY MERIT. HOWEVER, WE FIND THAT THE LD.CIT(A) HAS REMITTED BACK THE ISSUE WITH RESPECT TO UNSECURED CREDI TORS TO THE FILE OF LD.AO FOR VERIFICATION WHICH IS ERRONEOUS BECAUSE THE LD.CIT(A) DOES NOT HAVE SUCH POWERS UNDER THE ACT. FURTHER, CONSIDERING THE SUBMISSIONS OF THE LD.AR THAT ADDITIONAL EVIDENCE IS REQUIRED TO BE PRODUCED BEFORE THE LD.REVENUE AUTHORITIES, WE HEREBY SET ASIDE THE ORDER O F THE LD.CIT(A) AND REMIT THE ENTIRE APPEAL BACK TO THE LD.AO FOR FRESH CONSIDERATION. NEEDLESS TO MENTION THAT THE ASSESS EE SHALL BE PROVIDED WITH FAIR OPPORTUNITY OF BEING HEAR D ADMITTING THE ADDITIONAL EVIDENCE IF ANY. WE ALSO MA KE IT CLEAR THAT IF THE ASSESSEE OR ITS COUNSEL FAIL TO CO-OPERATE BE FORE THE LD.CIT(A) IN HIS PROCEEDINGS, THE LD.CIT(A) SHALL BE AT LIBERTY TO PASS APPROPRIATE ORDER IN ACCORDANCE WITH LAW AND ME RIT BASED ON THE MATERIALS BEFORE HIM. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED A S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE 17 TH DECEMBER, 2020 SD/- SD/- ( P. MADHAVI DEVI ) ( A. MOHAN ALANKA MONY ) JUDICIAL MEMBER ACCOUNTANT MEMBE R HYDERABAD, DATED: 17-12-2020 TNMM ITA NO.948/HYD/2019 :- 5 -: COPY TO : 1.M/S.ELITE RECREATIONS AND RESORTS PRIVATE LIMITED , C/O. P.MURALI & CO., CHARTERED ACCOUNTANTS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD. 2.THE INCOME TAX OFFICER, WARD-17(2), HYDERABAD. 3.CIT(APPEALS)-1, HYDERABAD. 4.THE PR.CIT-1, HYDERABAD. 5.D.R. ITAT, HYDERABAD. 6.GUARD FILE.