ACIT, Circle -2(1), Tirupathi V. M/s Shri Venkateswara Sponge and Power Pvt. Ltd, Srikalahasti

ITA 97/HYD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66263 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 24-01-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V SRINIVAS
• Assessee Lawyers: NEHRU MOORTHY

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SRI SAKTIJIT DEY, JUDICIAL MEMBER I.T.A. NO. 1273/HYD/2011 ASSESSMENT YEAR 2006-07 M/S. SHRI VENKATESHWARA SPONGE & POWER PVT. LTD., SECUNDERABAD PAN: AAICS1087L VS. DY. CIT CIRCLE-3(1) HYDERABAD APPELLANT RESPONDENT I.T.A. NO. 97/HYD/2012 ASSESSMENT YEAR 2008-09 THE ASST. CIT CIRCLE-2(1) TIRUPATI VS. M/S. SHRI VENKATESWARA SPONGE AND POWER PVT. LTD. SRIKALAHASTHI PAN: AAICS1087L APPELLANT RESPONDENT ASSESSEE BY: SRI NEHRU MOORTHY REVENUE BY: SRI V. SRINIVAS DATE OF HEARING: 08.08.2012 DATE OF PRONOUNCEMENT: 07.09.2012 O R D E R PER CHANDRA POOJARI, AM: ITA NO. 1273/HYD/2011 BY THE ASSESSEE FOR ASSESSME NT YEAR 2006-07 IS DIRECTED AGAINST THE ORDER OF THE C IT(A), GUNTUR DATED 27.4.2011 AND ITA NO. 97/HYD/2012 BY THE REVE NUE FOR THE ASSESSMENT YEAR 2008-09 IS DIRECTED AGAINST THE ORDER OF THE CIT(A), GUNTUR DATED 29.06.2011. 2. THE ASSESSEES GRIEVANCE IN ITS APPEAL IS WITH REGA RD TO SUSTAINING OF ADDITION OF RS. 15 LAKHS OUT OF RS. 1 ,43,81,000 MADE U/S. 68 OF THE ACT TOWARDS SHARE APPLICATION M ONEY. THE CIT(A) SUSTAINED RS. 15 LAKHS OUT OF RS. 1,43,81,00 0 MADE TOWARDS UNEXPLAINED SHARE APPLICATION MONEY RECEIVE D BY THE I.T.A. NO. 1273/HYD/2011 I.T.A. NO. 97/HYD/2012 M/S. SHRI VENKATESHWARA SPONGE & POWER PVT. LTD. ===================== 2 ASSESSEE. THIS AMOUNT OF RS. 15 LAKHS IS SAID TO H AVE BEEN RECEIVED FROM M/S. MADHUSRI FINVEST PVT. LTD. BUT T HE ASSESSEE NOT FURNISHED DETAILS OF IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION BEFORE THE LOWER AUT HORITIES. 3. BEFORE US, THE LEARNED AR FILED CONFIRMATION LETTER , LEDGER ACCOUNT, BANK ACCOUNT STATEMENT, AUDITED FINANCE ST ATEMENT AND INCOME-TAX RETURNS OF M/S. MADHUSRI FINVEST PVT. LT D. AND PLEADED THAT THE ASSESSEE RECEIVED A SUM OF RS. 15 LAKHS FROM A LIMITED COMPANY AND IT IS A GENUINE TRANSACTION AND IT SHOULD BE VERIFIED FROM THE END OF THE ASSESSING OFFICER. 4. THE LEARNED DR RELIED ON THE ORDER OF THE CIT(A). 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. THE ADDITION IS SUSTAINED BY THE CIT(A) ON THE REASON THAT THE ASSESSEE HAS NOT EXPLAINED THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION . AS THE ASSESSEE HAS FILED VARIOUS SUPPORTING DOCUMENTS IN THE FORM OF CONFIRMATION LETTER, LEDGER ACCOUNT, BANK STATEMENT , AUDITED FINANCE STATEMENT AND INCOME-TAX RETURNS OF M/S. MA DHUSRI FINVEST PVT LTD., IN OUR OPINION, IT IS FAIR AND AP PROPRIATE TO REMIT THE ISSUE BACK TO THE FILE OF THE ASSESSING O FFICER TO EXAMINE THE ABOVE DOCUMENTS AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW. ITA NO. 1273/HYD/2011 IS ALLO WED FOR STATISTICAL PURPOSES. 6. NOW COMING TO ITA NO. 97/HYD/2012, THE APPEAL FILED BY THE REVENUE. THE ISSUE IN THIS APPEAL IS WITH REGA RD TO DELETION OF ADDITION OF RS. 10 CRORES OUT OF RS. 11,22,70,33 0 MADE TOWARDS DIFFERENCE IN CLOSING STOCK. THE ASSESSING OFFICER MADE AN ADDITION OF RS. 11,22,70,326 TOWARDS VARIATION B ETWEEN THE STOCK VALUE AS PER BOOKS OF ACCOUNT AND STOCK STATE MENT. IN SPITE OF GIVING SUFFICIENT OPPORTUNITY TO THE ASSES SEE BY THE I.T.A. NO. 1273/HYD/2011 I.T.A. NO. 97/HYD/2012 M/S. SHRI VENKATESHWARA SPONGE & POWER PVT. LTD. ===================== 3 ASSESSING OFFICER THE VARIATION WAS NOT SATISFACTOR ILY EXPLAINED. HOWEVER, ON APPEAL TO THE CIT(A), HAS DELETED THE A DDITION OF RS. 10 CRORES WITHOUT RECONCILING THE STOCK RECORDED IN THE BOOKS OF ACCOUNT AND THE STOCK REFLECTED IN THE BANK STATEME NT AND SUSTAINED ONLY RS. 1,22,70,330. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. THE ORDER OF THE CIT(A) IS NOT A SPEAKI NG ORDER AND VERY CRYPTIC. WE ARE NOT IN A POSITION TO UPHOLD T HE SAME. THE PRACTICE FOLLOWED BY THE ASSESSEE HAS NO LEGAL SANC TITY. THERE IS HUGE DIFFERENCE BETWEEN THE STOCK DISCLOSED IN THE STOCK STATEMENT AND STOCK DISCLOSED IN THE BOOKS OF ACCOU NT OF THE ASSESSEE. THOUGH ADEQUATE OPPORTUNITY HAS BEEN GIV EN TO THE ASSESSEE BY THE ASSESSING OFFICER, THE DIFFERENCE W AS NOT EXPLAINED. BEING SO, THE AD-HOC DELETION OF RS. 10 CRORES OUT OF THE ADDITION OF RS. 11,22,70,330 BY THE CIT(A) IS N OT JUSTIFIED. HENCE IN THE INTEREST OF JUSTICE, CONSIDERING THE J UDGEMENT OF PUNJAB & HARYANA HIGH COURT IN THE CASE OF BT STEEL S LTD. VS. CIT (328 ITR 471, WE ARE INCLINED TO REMIT THE ISSU E BACK TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO T HE ASSESSEE TO EXPLAIN AND RECONCILE THE DIFFERENCE BETWEEN THE ST OCK STATEMENT AND STOCK REFLECTED IN THE BOOKS OF ACCOU NT OF THE ASSESSEE. THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, BOTH ASSESSEES AND REVENUES APPEAL S ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH SEPTEMBER, 2012. SD/- (SAKTIJIT DEY) JUDICIAL MEMBER SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED 7 TH SEPTEMBER, 2012 TPRAO I.T.A. NO. 1273/HYD/2011 I.T.A. NO. 97/HYD/2012 M/S. SHRI VENKATESHWARA SPONGE & POWER PVT. LTD. ===================== 4 COPY FORWARDED TO: 1. M/S. SHRI VENKATESHWARA SPONGE & POWER PVT. LTD. , D. NO. 2002, 2 ND FLOOR, EMERALD HOUSE, S.D. ROAD, SECUNDERABAD- 500 003. 2. M/S. SHRI VENKATESHWARA SPONGE & POWER PVT. LTD. , INDUSTRIAL ESTATE, MERLAPAKA VILLAGE, YERPEDU MANDA L, SRIKALAHASTHI-517 619. 3. THE DCIT, CIRCLE-3(1), HYDERABAD. 4. THE ASST. CIT, CIRCLE-2(1), D. NO. 6-1-75E, RAJA SWA BHAVAN, VARADARAJA NAGAR, TIRUPATI. 5. THE CIT(A), GUNTUR 6. THE CIT-III, HYDERABAD. 7. THE CIT, TIRUPATI 8. THE DR A BENCH, ITAT, HYDERABAD