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Income Tax Appellate Tribunal, Hyderabad ‘ A ‘ Bench, Hyderabad
Before: Shri S.S. Godara & Shri Laxmi Prasad Sahu
Per S. S. Godara, J.M.
This Revenue’s appeal in ITA No.276/Hyd/2013 with assessee’s Cross Objection in C.O No.37/Hyd/2018 and latter’s cross appeal in ITA No.2179/Hyd/2018 arise against the CIT(A) Vijayawada’s common order dated 14.12.2012 passed in Appeal No.311/VJA/CIT(A)/VIJA/2011-12 involving proceedings u/s 143(3) of the Income Tax Act, 1961, in short ‘the Act’ respectively. Page 1 of 5
ITA Nos 276 of 2013 CO 37 of 2018 and ITA 2179 of 2018 Varalakshmi Constructions Khammam Heard both the parties. Case files perused. 2. It emerges at the outset that the Revenue’s appeal ITA No.276/Hyd/2013 raises the following substantive grounds:
“1. The Ld. CIT(A) erred in restricting the disallowance of Rs. 3 6,00,000/ - as against Rs. 73,35,836/- disallowed by the AD for expenses without supporting vouchers. 2. The Ld.CIT(A) erred in deletion of Rs.3,85, 00, 000/- representing the cash withdrawal. 3. The Ld. CIT(A) failed to appreciate that evidence was found during the search with regards to money being drawn by the employee of M/s. Madhucon Projects Ltd., who happened to be the principal contractor. 4. Thus, Ld. CIT(A) erred in holding that the AD has failed to prove the destination of the money drawn from the bank when it is evident that the money has gone back to main contractor. 5. The finding of the Ld. CIT(A), that addition is made merely on suspicions is erroneous on facts and circumstances as the addition is based on finding of Search conducted at the residence of Shri. Ravikanth Trivedi, the employee of the main contractor i.e. M/s. Madhucon projects Ltd. And not on mere suspicious as held by CIT(A). 6. The Ld. CIT(A) erred in deleting the unexplained cash deposit of Rs.75,00,000/ - without giving any reason in their order. 7. Any other ground that may be urged at the time of hearing”.
It next transpires that the assessee’s appeal in ITA No.2179/Hyd/2018 as well as the C.O No.37/Hyd/2018 suffer from respective delay(s) of 2076 and 2016 days attributable to miscellaneous reasons with misplacement of case file and the communication gap in the management. Hon'ble Apex Court’s landmark decision(s) in Collector Land Acquisition, ... vs Mst. Katiji & Ors 1987 SCR (2) 387 and University of Delhi vs. Union of India Civil Appeal No.9488 and 9489/2019 dated 19.12.2019 hold that cause of substantive justice
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ITA Nos 276 of 2013 CO 37 of 2018 and ITA 2179 of 2018 Varalakshmi Constructions Khammam must prevail over all technical aspects in case the litigant is able to sufficiently explain the delay in exercising the corresponding legal remedy(ies). We therefore, reject the Revenue’s vehement arguments contesting the assessee’s averments in the two condonation petitions i.e. both cross appeal as well as the cross objection (supra). The same stand admitted.
It next emerges that the assessee’s sole of substantive grounds in appeal ITA 2779/Hyd/2018 seeks to reverse both the lower authorities action disallowing the expenditure amount of Rs.73,35,836/- @ 10% since bogus in nature. Its cross objection No.37/Hyd/2018, on the other hand, support the CIT (A)’s action granting part relief forming subject matter of adjudication in the Revenue’s appeal.
We notice with the able assistance of both the parties that the Revenue’s appeal seeking to revive the corresponding addition(s) amounting to Rs.4,60,00,000/- comprises of cash withdrawals of Rs.3,85,00,000/- as well as cash deposit of Rs.75,00,000/-; deserves to be declined for the sole reason that the corresponding material to this effect had emerged during the course of search dated 4.2.2011 in M/s. Madhucon group. The Assessing Officer had thereafter framed its impugned assessment on 27.12.2011. Coupled with this, he also took recourse to section 153C proceeding to add the very amount forming part of Rs.6,85,00,000/- as money routed back by way of sub-contracts in construction business. And that this tribunal’s common order in assessee’s appeal No.1842 and 170 & 171/Hyd/2015 and Revenue’s cross appeals No.197 & 198 quashed the said section 153C assessments for want of a valid satisfaction. Meaning thereby that the impugned addition of the above money routed involving M/s.
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ITA Nos 276 of 2013 CO 37 of 2018 and ITA 2179 of 2018 Varalakshmi Constructions Khammam Madhucon group has been already held to be an invalid addition under the specific provisions enshrined in section 153C of the Act. We therefore, quote legal maxim “generalia specialises non-derogant” and hold that the very addition is not liable to be sustained in section 143(3) proceedings for this precise reason alone. We accordingly decline Revenue’s sole substantive grievance as well as the main appeal in ITA No.276/Hyd/2013. The assessee’s C.O No.37/Hyd/2018 supporting the CIT (A)’s order under challenge stand rendered infructuous therefor.
Now comes the assessee’s sole substantive ground in its appeal ITA No.2179/Hyd/2018 seeking to reverse the CIT (A)’s action disallowing 10% of expenditure; coming to Rs.73,35,836/- and restricted to Rs.36,00,000/- on estimation basis under challenge. It emerges during the course of hearing that neither the assessee has been able to prove the same in its entirety by filing all cogent evidence nor there is any specific default found in its books by either of the lower authorities. Faced with this factual position, we deem it proper to restore the impugned disallowance to Rs.25,00,000/- only with a rider that the same shall not be treated as a precedent in any other case or any preceding or succeeding assessment years. Ordered accordingly. No other ground has been pressed before us. The Revenue’s appeal ITA 276/Hyd/2013 is dismissed. The assessee’s cross objection CO No.37/Hyd/2018 is dismissed as rendered infructuous. And the latter’s cross appeal ITA 2179/Hyd/2018 is partly allowed in above terms. A copy of this common order be placed in the respective case files. Order pronounced in the Open Court on 8th September,2021. Sd/- Sd/- (LAXMI PRASAD SAHU) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER
Hyderabad, dated 8th September, 2021. Vinodan/sps
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ITA Nos 276 of 2013 CO 37 of 2018 and ITA 2179 of 2018 Varalakshmi Constructions Khammam Copy to:
S.No Addresses 1 Vara Lakshmi Constructions C/o P. Murali & Co. C.A, 6-3-655/2/3 Swomajiguda, Hyderabad 500082 2 ACIT, Circle-1, Khammam & Dy.CIT, Central Circle, Hyderabad 3 CIT (A)-Vijayawada 4 CIT - Vijayawada 5 DR, ITAT Hyderabad Benches 6 Guard File
By Order
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