ACIT, CIRCLE-1, KADAPA, KADAPA vs. A.C.CHENNA REDDY, MYLAVARAM, KADAPA

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ITA 13/HYD/2017Status: DisposedITAT Hyderabad07 October 2021AY 2005-063 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal agreed that the outcome of the pending assessments of the benami firms would impact the assessee's case. Therefore, the matter was remitted back to the Assessing Officer for a fresh decision.

What were the facts?

The Revenue appealed against the CIT(A)'s deletion of disallowances made under Section 40(a)(ia) for payments to sub-contractors. The assessee's representative requested a remand as the assessment of related benami firms was pending.

What were the issues?

Whether the disallowance under Section 40(a)(ia) was correctly deleted by the CIT(A) and if the case should be remanded pending decision in related benami firm assessments.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCH-A, HYDERABAD

Before: SHRI A. MOHAN ALANKAMONY & SHRI S.S. GODARA

For Appellant: Shri Raj Kumar Jaju
For Respondent: Smt. B. Kavitha Rani, DR
Hearing: 29/09/2021Pronounced: 07/10/2021

Assessee by: Shri Raj Kumar Jaju Revenue by: Smt. B. Kavitha Rani, DR Date of hearing: 29/09/2021 Date of pronouncement: 07/10/2021 ORDER PER A. MOHAN ALANKAMONY, AM:

This appeal is filed by the Revenue against the order of the Ld. CIT (A)-11, Pune in appeal No. Pn/CIT(A)-11/ACIT Cen. Cir 2, Thane/508/2014-15, dated 20/10/2016 passed U/s. 143(3) r.w.s 254 and U/s. 250(6) of the Act for the AY 2005-06.

2.

The revenue has raised four grounds in its appeal and they are extracted herein below for reference: “(i) The Ld. CIT (A) erred on facts and in law of the case. (ii) The Ld. CIT (A) erred in deleting the disallowance of Rs. 1,35,76,742/- made by invoking the provisions of section 40(a)(ia) without appreciating the payments are admittedly made to sub-contractors. (iii) The Ld. CIT (A) erred in deleting the disallowance of Rs. 3,12,13,815/- made by invoking the provisions of section 40(a)(ia) without appreciating that the payments are admittedly made to sub-contractors. (iv) Any other ground that may be urged at the time of hearing.”

3.

At the outset, the Ld. AR submitted before us that the assessment of the partnership firm/s of the assessee which is treated as the benami firm/s of the assessee is pending before the Ld. AO and the decision rendered in those/that case/s will have a bearing while deciding the case of the assessee. Therefore, the Ld. AR pleaded that the appeal of the Revenue in the case of the assessee may be remitted back to the file of the Ld. AO in order to pass appropriate order considering the outcome of the decision rendered in the benami partnership firm/s of the assessee. Ld. DR conceded to the request of the Ld. AR.

4.

After hearing both the parties, we are of the view that the contention of the Ld. AR has some merit. Therefore, in the interest of justice, we here by remit back the matter to the file of the Ld. AO in order to pass appropriate order considering the outcome of the decision rendered in the Benami/partnership firm/s of the assessee.

5.

In the result, appeal of the Revenue is allowed for statistical purposes as indicated herein above.

Order pronounced in the open court on the 07th October, 2021.

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