SYNAPTICS INDIA PRIVATE LIMITED,BANGALORE V. DCIT., CIRCLE - 8(1), HYDERABAD

ITA 605/HYD/2024

AI Insights

The case involves Synaptics India Private Limited, which appealed against the addition of Rs.2,14,48,600 to its income for the assessment year 2021-2022, as determined by the Assessing Officer under section 143(1) of the Income Tax Act. This amount represented a GST refund for the assessment year 2020-2021, which the company argued was not taxable as it was not included in the Profit & Loss account nor claimed in the income tax return. The CIT(A) upheld the addition, leading to the appeal before the Tribunal. The Tribunal found procedural lapses in the hearing process and remitted the case back to the Assessing Officer for a detailed examination and proper hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 31760 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2021-2022
• Other Referred Cases: Chowranghee Sales Bureau P. Ltd. vs. CIT [1973] 87 ITR 542 (SC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SRINATH SADANALA
• Assessee Lawyers: C S SUBRAHMANYAM
• Keywords: Opportunity of being heard

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD “A” BENCH : HYDERABAD BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ITA.No.605/Hyd/2024 Assessment Year 2021-2022 Synaptics India Private Limited, Unit No.402, 4th Floor, No.1-C, RMZ Ecospace Outer Ring Road, Bellandur-560 103 Karnataka. PAN AACCV7123N vs. The DCIT, Circle-8(1), Hyderabad. (Appellant) (Respondent) For Assessee : CA CS Subrahmanyam And Shri V. Siva Kumar, Advocate For Revenue : Shri Srinath Sadanala, Sr. AR Date of Hearing : 12.02.2025 Date of Pronouncement : 24.02.2025 ORDER PER G. MANJUNATHA, A.M. : This appeal filed by the assessee has been directed against the order of the Addl/JCIT(A), Bhubaneswar, dated 07.05.2024 relating to assessment year 2021-2022. 2 ITA.No.605/Hyd./2024 2. Facts of the case, in brief, are that the assessee company filed it’s return of income on 11.03.2022 declaring income at Rs.10,35,04,070/-. The said return was processed by the Assessing Officer-CPC u/sec.143(1) of the Act and determined the total income of the assessee at Rs.12,49,52,670/- by making addition of Rs.2,14,48,600/- on account of GST refund vide order dated 25.10.2022. 3. On being aggrieved, the assessee carried the matter in appeal before the learned CIT(A) and the learned CIT(A) confirmed the addition of Rs.2,14,48,600/- made in the hands of the assessee. 4. Aggrieved by the order of the learned CIT(A), the assessee carried the matter in appeal before the Tribunal. 5. During the course of hearing, Learned Counsel for the Assessee submitted that both the lower authorities erred in law and on facts in making the addition of Rs.2,14,48,600/-. He submitted that the impugned amount is refund of GST to the company for the assessment year 2020-2021 and such refund is out of actual payments of GST by the company in earlier years which was never 3 ITA.No.605/Hyd./2024 charged to P & L A/c as expenditure and, therefore, never claimed in the income tax return. He accordingly, pleaded that the GST refund sum of Rs.2,14,48,600/- cannot be taxed in the hands of the assessee and the said addition sustained by the learned CIT(A) be deleted in the interest of substantial justice. Learned Counsel for the Assessee further submitted that the impugned addition has been made by the Assessing Officer-CPC during sec.143(1) proceedings and the learned CIT(A) sustained the same without providing ample opportunity of being heard to the assessee. He accordingly, in the alternative, pleaded that the matter may be sent back to the file of jurisdictional Assessing Officer to revaluate it’s VAT/GST claim in the interest of justice. 6. The Learned DR on the other hand strongly relied on the orders of the authorities below. He submitted that merely because the assessee did not charge the GST refund to it’s P & L A/c as expenditure, it did not preclude the authorities to make the addition in the hands of the assessee. Therefore, the learned CIT(A) sustained addition 4 ITA.No.605/Hyd./2024 made by the Assessing Officer by relying on the decision of Hon’ble Supreme Court in the case of Chowranghee Sales Bureau P. Ltd., vs. CIT [1973] 87 ITR 542 (SC) wherein it has been held that sales tax collected by the assessee is revenue receipt even if it is not shown by the assessee as non-revenue one and such treatment of assessee is not a decisive one. He submitted that since the assessee did not shown the VAT/GST refund as the income of the company, the learned CIT(A) rightly sustained the addition made by the Assessing Officer –CPC. 7. We have heard the rival submissions of both the parties and perused the material available on record. Admittedly, it is not in dispute between the parties that the impugned sum of Rs.2,14,48,600/- is the VAT/GST refund of the assessee. It is the contention of the assessee that the said amount is refund of GST to the company for the A.Y. 2020-2021, which has not been disclosed by the assessee company in it’s return of income. Therefore, the Assessing Officer made the addition and the learned CIT(A) sustained the same. We find that the impugned addition has been by 5 ITA.No.605/Hyd./2024 the Assessing Officer-CPC u/sec.143(1) of the Act and thereby the assessee was prevented by sufficient opportunity of being heard to substantiate it’s claim. Even in the appeal before the learned CIT(A) also, he simply sustained the addition without affording proper opportunity of being heard to the assessee. We, therefore, deem it fit and appropriate to remit the matter in issue back to the fie of jurisdictional Assessing Officer with a direction to provide one more opportunity to the assessee to furnish any additional information or clarity before a final decision can be made on the impugned addition. Needless to say, it is the assessee’s risk and responsibility to plead and prove it’s case in consequential proceedings by providing all the requisite documents as called for by the Assessing Officer to re-evaluate the VAT/GST refund as per fact and law. Accordingly, the grounds raised by the assessee are allowed for statistical purposes. 8. In the result, appeal of the Assessee is allowed for statistical purposes. 6 ITA.No.605/Hyd./2024 Order pronounced in the open Court on 24.02.2025. Sd/- Sd/- [LALIET KUMAR] [G.MANJUNATHA] JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, Date 24th February, 2025 VBP Copy to 1. The appellant 2. The respondent 3. The CIT(A), Hyderabad concerned 4. The CIT, Hyderabad concerned 5. The DR ITAT ‘A” Bench, Hyderabad 6. Guard File //By Order// //True Copy// Sr. Private Secretary : ITAT : Hyderabad Benches, Hyderabad. "