M/s KSR Infrastructure Pvt. Ltd., Hyderabad V. ACIT, Hyderabad

ITA 962/HYD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9905 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 22-12-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 28-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMLAN TRIPATHY
• Assessee Lawyers: MURALIMOHANA RAO
• Keywords: Depreciation; Principle of natural justice; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI AKBER BASHA, ACCOUNTANT MEMB ER ITA NO.962/HYD/10 : ASST. YEAR: 2006-07 M/S. KSR INFRASTRUCTURE PVT. LTD., HYDERABAD. (PAN:AACCK 3530 C) VS ACIT, CIR-2(1), HYDERABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MURALIMOHANA RAO RESPONDENT BY : SHRI AMLAN TRIPATHY O R D E R PER AKBER BASHA, ACCOUNTANT MEMBER: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDE R OF THE CIT (A)-III, HYDERABAD DATED 13-4-2010 AND IT P ERTAINS TO THE ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL BEFORE US: 1. THE CIT(A) ERRED BY DISALLOWING AN AMOUNT OF RS.5 ,39,122 RELATING TO THE DEPRECIATION ON THE ADDITIONS MADE TO THE FIXED ASSETS DURING THE PREVIOUS YEAR 2005-06 RELEVANT TO THE ASSESSMENT YEAR 2006-07. THE ASSESSEE IS HAVING ALL THE IN VOICES RELATING TO THE ADDITIONS MADE TO THE FIXED ASSETS DURI NG THE ASSESSMENT YEAR AND THE SAME MAY BE ALLOWED. THE ENTRIE S HAVE ITA NO. 962/HYD/20 10 K.SR INFRASTRUCTUR E PVT. LTD. HYD. 2 BEEN REFLECTED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND THE AMOUNT HAS BEEN ENTERED IN THE BLOCK OF ASSETS. 2. AS PER BLOCK OF ASSETS CONCEPT ONCE THE AMOUNT OF ADDIT ION TOWARDS BLOCK OF ASSETS IS ENTERED INTO THE SAME SHOULD BE CONTINUED FROM EACH YEAR TO YEAR UNLESS IT IS DISCARDE D OR REMOVED AND DEPRECIATION SHOULD BE ALLOWED ON THAT. ALL SUPPO RTING PAPERS FOR PURCHASE OF ASSETS ARE AVAILABLE WITH THE ASSESSEE. 3. THE ASSESSEE HAS SUBMITTED THAT DUE TO THE REASON OF HI GH EMPLOYEE TURNOVER IT WAS UNABLE TO PRODUCE THE COPIES O F INVOICES ETC., (WITH RESPECT TO ADDITIONS TO FIXED ASSETS) TO THE ASSESSING OFFICER IN TIME. CIT (A) HAS NOT APPRECIATED THIS AND VIOLATED THE PRINCIPLES OF NATURAL JUSTICE IN DISALLOWING THE ADDITIO NAL EVIDENCE, WHICH HAS BEEN PRODUCED BY THE ASSESSEE REGARDING THE ADD ITIONS TO THE FIXED ASSETS. 4 THE ASSESSEE MAY ADD, ALTER, OR MODIFY OR SUBSTITUTE AN Y OTHER POINTS TO THE GROUNDS OF APPEAL AT ANY TIME BE FORE OR AT THE TIME OF HEARING OF THE CASE. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDER ATION ON 1- 11-2005 ADMITTING A TOTAL LOSS OF RS.21,32,740/-. DU RING THE COURSE OF SCRUTINY ASSESSMENT, THE ASSESSEE COMPANY WAS ASKED TO PRODUCE INVOICES/BILLS FOR THE ADDITIONS MADE TO THE FIXED ASSET S DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSID ERATION. THE ASSESSEE COMPANY DID NOT FURNISH ANY COPIES OF BILLS/INVOICE S FOR THE ADDITIONS SAID TO HAVE BEEN MADE BUT, FILED A COPY OF DEPRECIATION STATEMENT PREPARED AS PER THE PROVISIONS OF INCOME-TAX A CT. IN THE ITA NO. 962/HYD/20 10 K.SR INFRASTRUCTUR E PVT. LTD. HYD. 3 ABSENCE OF NECESSARY DOCUMENTARY EVIDENCE, IN SUPPORT OF IT S CLAIM OF ADDITION TO FIXED ASSETS, THE ASSESSING OFFICER DISALLOWED THE DEPRECIATION CLAIM ON THESE ADDITIONS TO FIXED ASSETS AMOUNTING TO RS.5,39,122/-. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSE E WENT IN APPEAL BEFORE THE CIT [A]. ON APPEAL, THE CIT [A] CONFIRMED THE ACTION OF THE ASSESSING OFFICER. FURTHER AGGRIEVED, THE ASSESSEE I S IN APPEAL BEFORE US. 4 THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT TH E CIT [A] IS NOT JUSTIFIED IN DISALLOWING AN AMOUNT OF RS.5, 39,122 RELATING TO THE DEPRECIATION ON THE ADDITIONS MADE TO THE FIXED ASSETS DURING THE PREVIOUS YEAR 2005-06 RELEVANT TO THE ASSESSMENT YEAR 20 06-07 WHEN THE ASSESSEE IS HAVING ALL THE INVOICES RELATING TO THE AD DITIONS MADE TO THE FIXED ASSETS DURING THE ASSESSMENT YEAR. IT IS SUBMITTE D THAT DUE TO THE REASON OF HIGH EMPLOYEE TURNOVER, THE ASSESSEE COMPAN Y WAS UNABLE TO PRODUCE THE COPIES OF INVOICES ETC., IN RESPECT O F ADDITIONS TO FIXED ASSETS TO THE ASSESSING OFFICER IN TIME. IT IS FURTHE R SUBMITTED THAT THE CIT [A] HAS NOT APPRECIATED THIS AND VIOLATED THE PRINCIPLES OF NATURAL JUSTICE IN DISALLOWING THE ADDITIONAL EVIDENCE , WHICH HAS BEEN PRODUCED BY THE ASSESSEE REGARDING THE ADDITIONS TO THE FIXED ASSETS. THE ASSESSEE COMPANY IS READY WITH ALL THE DETAILS WITH R EGARD TO ADDITIONS TO THE FIXED ASSETS AND HENCE THE ISSUE MAY BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH CONSIDERATI ON. 5. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REP RESENTATIVE E WHILE RELYING ON THE ORDERS OF THE AUTHORITIES BELO W SUBMITTED THAT THE LOWER AUTHORITIES ALREADY GIVEN AMPLE OPPORTUNITY TO THE ASSESSEE TO PRODUCE EVIDENCE WITH REGARD TO ADDITIONS MADE TO THE FIXED ASSETS. THE ITA NO. 962/HYD/20 10 K.SR INFRASTRUCTUR E PVT. LTD. HYD. 4 ASSESSEE HAS NOT EXPLAINED ANY VALID REASON FOR NOT FURNI SHING THE COPIES OF INVOICES BEFORE THE ASSESSING OFFICER FOR ALLOWING THE CLAIM OF THE ASSESSEE WITH REGARD TO THE DEPRECIATION. HENCE THE O RDERS OF THE LOWER AUTHORITIES ON THIS ISSUE MAY BE UPHELD. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PAR TIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THA T THE ASSESSEE HAS FURNISHED PHOTOCOPIES OF THE VARIOUS BILLS/INVOICES IN SUP PORT OF ACQUISITION OF FIXED ASSETS DURING THE PREVIOUS RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION BEFORE THE CIT [A] RE QUESTING HIM TO CONSIDER THE SAME AND ALLOW NECESSARY RELIEF TO THE ASSESSEE COMPANY. HOWEVER, THE CIT [A] REJECTED THE REQUEST OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAS NOT EXPLAINED PROPERLY THE REASONS FOR NOT SUBMITTING INVOICES/BILLS BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. THE CIT [A] ALSO NOTICED THAT T HE ASSESSEE COMPANY HAS NOT CLARIFIED AS TO UNDER WHICH CIRCUMSTANCES THE ASSESSEE COMPANY COULD NOT FURNISH THE NECESSARY BILLS/INVOICES IN SU PPORT OF ADDITIONS TO THE FIXED ASSETS SHOWN IN THE PREVIOUS YEAR WHICH IS CALLED FOR BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDIN GS. WE FIND THAT THE ASSESSEE COMPANY HAS SUBMITTED BEFORE THE C IT [A] THAT DUE TO THE REASON OF HIGH EMPLOYEE TURNOVER, IT WAS UNABLE TO PRODUCE THE COPIES OF INVOICES/BILLS ETC., BEFORE THE ASSESSING OFF ICER IN TIME. THE DISALLOWANCE OF DEPRECIATION OF RS.5,39,122 HAS BEEN MAD E ONLY ON ACCOUNT OF ABSENCE OF EVIDENCE ADDUCED BY THE ASSESSEE IN SU PPORT OF PURCHASE OF ASSETS BY THE ASSESSEE COMPANY. AS SUBMITTED BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE COMPANY IS R EADY WITH ALL SUPPORTING PAPERS, BILLS/VOUCHERS FOR PURCHASE O F ASSETS,HENCE, IN OUR CONSIDERED OPINION, ENDS OF JUSTICE WOULD BE MET IF THE ASSESSEE ITA NO. 962/HYD/20 10 K.SR INFRASTRUCTUR E PVT. LTD. HYD. 5 IS GIVEN ONE MORE OPPORTUNITY TO PUT FORTH HIS CLAIM BEFORE THE ASSESSING OFFICER. ACCORDINGLY, WE REMIT THIS MATTER BACK TO THE ASSESSING OFFICER FOR FRESH CONSIDERATION AND DIRECT THE ASSESSEE TO SUBMIT/PR ODUCE ALL THE RELEVANT PAPERS, BILLS/VOUCHERS FOR PURCHASE OF ASSETS DUR ING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSID ERATION IN SUPPORT OF ITS CLAIM FOR DEPRECIATION. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TR EATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 13-01-2011. SD/ - (G.C. GUPTA)) SD/- (AKBER BASHA) VICE PRESIDENT. ACCOUNTANT MEMBER. DT/- 13-01-2011. COPY FORWARDED TO: 1. SHRI MURALI & COMPANY, CHARTERED ACCOUNTANTS, 6-3- 655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD. 2. 3. 4.. 5. JMR* ACIT, CIR-2(1), HYDERABAD. CIT (A)-III, HYDERABAD. CIT, AP. HYDERABAD. THE DR, ITAT, HYDERABAD.