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Income Tax Appellate Tribunal, HYDERABAD BENCHES “B”: HYDERABAD
Before: SHRI SATBEER SINGH GODARA & SHRI LAXMI PRASAD SAHU
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “B”: HYDERABAD (THROUGH VIRTUAL CONFERENCE) BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER
ITA Nos. 776 & 777/H/2018 Assessment Years: 2012-13 & 2013-14 Asst. Commissioner of Vs. Amelinane Ravindra Income-tax, Chowdary, Anantapur Circle – 1(2), Anantapur. PAN – AFSPC 7138Q (Appellant) (Respondent) Revenue by: Shri Rohit Mujumdar Assessee by: Shri Abhiroop Bhargav Date of hearing: 23/08/2021 Date of pronouncement: 26/08/2021
O R D E R PER L.P. SAHU, A.M.: Both these appeals filed by the Revenue are directed against CIT(A), Kurnool’s separate orders dated 26/02/2018 for AYs 2012-13 & 2013-14 involving proceedings u/s 144 of the Income- Tax Act, 1961; in short “the Act”. As the grounds and facts are materially identical in both these appeals, the same were clubbed and heard together and, therefore, a common order is passed for the sake of convenience. Therefore, the decision taken in AY
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2012-13 shall mutatis-mutandis apply to AY 2013-14. The grounds raised by the revenue in AY 2012-12 are as under: “1) The order of the Learned CIT (Appeals) is bad both on facts and in law. 2) Whether the CIT(A) is right in directing the AO to estimate the income of the assessee when assessee failed to produce books of accounts or any other evidence (including proof of deduction of TDS on the Expenses, which could have resulted in disallowance of Sec. 40(a)(ia) or disallowance u/s 40A(3) 3) Whether the CIT(A) is right in giving relief in a case decided u/s 144 when the assessee has failed to produce books of accounts before the Assessing Officer, and there by encouraging the assessee to avoid legal consequences of various Sections of IT Act such as 40(a)(ia) and 40A(3) etc. 4) Whether CIT(A) is right in not appreciating the fact that cash credits can be taxed separately even when income is estimated and thereby wrongly allowing telescoping of cash credit addition. 5) Any other additional ground that may be urged at the time of appeal hearing.”
Briefly the facts as taken from AY 2012-13 are that the assessee, an individual, filed his return of income for AY 2012-13 on 30/09/2012 admitting a total income of Rs. 35,21,820/-. Subsequently, the case was taken up for scrutiny under CASS and accordingly, statutory notices were issued. The AO observed that in-spite of so many efforts made by his office, the assessee had not attended for hearing nor furnished any information or books of account.
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He, therefore, passed ex-parte order by making the following additions with observations: 1. Addition to unsecured loans during the year was at Rs. 46,90,243/- (Rs. 42,65,000/- as on 31/03/2011 & Rs. 89,55,243/- as on 31/03/2012). In failure of the assessee to prove genuinity of the loans, Rs. 46,90,243/- is considered for addition. 2. The profit & loss account was debited with Rs. 13,35,81,422/- under the head “other expenses”. In failure of the assessee to produce the books of account and other supporting documents, considering the nature of the business and the exigencies of expenditure, ten percent of the said expenditure is disallowed resulting in an addition of Rs. 1,33,58,142/-. 3. The assessee along with three other persons had purchased 2.63 acres of land in Survey No. 401/2A of Anatapur Village, on 02/12/2009 for a consideration of Rs. 8,25,000/-. A part of this land, 45.91 cents was sold on 19/08/2011 for Rs. 22,23,000/-. The assessee has concealed this transaction. There is a short term capital gain of Rs. 2,65,859/- in assessee’s case. Hence, Rs. 2,65,859/- is assessed as short term capital gain. 4. Interest of Rs. 21,384/- u/s 244A of the Act was received by the assessee on 15/04/2011 for AY 2011-12 and this was not offered to tax. Hence, Rs. 21,384/- is considered for addition. 3. When the assessee preferred an appeal before the CIT(A), the CIT(A) partly allowed the appeal of the assessee following the assessment order passed in AY 2011-12 in assessee’s case, wherein the income of the assessee was
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estimated at 8% on gross receipts on main contracts and 5% on sub-contract works carried out by the assessee.
Aggrieved by the order of CIT(A), the assessee is in appeal before the ITAT.
Before us, the ld. DR submitted that the CIT(A) was not justified in directing the AO to delete the additions made by the AO as the CIT(A) has considered the turnover, whereas, the AO has made the additions under the head “other expenses” debited to P&L Account. Further, he submitted that in respect of unsecured loans, the CIT(A) was wrong in directing the AO to consider the factual matrix of the case and allow as per his findings in his order.
The ld. AR, on the other hand, submitted that the order was passed by the AO ex-parte u/s 144 of the Act by making the additions on the ground that the assessee failed to substantiate his case by way of documentary evidence. He, therefore, requested the Bench to remit the matter back to the file of the AO to argue its case on merits. The ld. AR undertook to produce all the relevant documents to substantiate his case before the AO.
After considering the rival submissions and perusing the material on record as well as going the orders of authorities below, we set aside the order of the CIT(A) as
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he passed the order passed by the CIT(A) is on a different footings and remit the matter back to the file of the AO with a direction to decide the matter afresh and in accordance with law after examining the details, which will be put- forth by the assessee before him and reasonable opportunity of hearing to the assessee may be provided. The assessee is directed to substantiate his case by way of documentary evidence without seeking any unnecessary adjournment for speedy disposal of the appeal. Accordingly, the grounds raised by the revenue are treated as allowed for statistical purposes.
With regard to AY 2013-14, though, the AO passed the order u/s 143(3) of the Act, the CIT(A) passed the order on the same footings as passed in AY 2012-13. Therefore, this appeal is also remitted to the file of the AO to decide the same with identical directions as given in AY 2012-13 (supra).
In the result, both the appeals of the Revenue are allowed for statistical purposes in above terms. A copy of this common order be placed in the respective case files. Pronounced in the open court on 26th August, 2021.
Sd/- Sd/- (S.S. GODARA) (L. P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, Dated: 26th August, 2021.
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kv Copy to : 1 ACIT, Circle - 1, Circle – 1, Aayakar Bhavan, 3rd Road, Anantapur 2 Amelinane Ravindra Chowdary, 2-311, 3rd Road, New Town, Anantapur. 3 CIT(A), Kurnool Pr. CIT, Kurnool 4 ITAT, DR, Hyderabad. 5 6 Guard File.
S.No. Details Date 1 Draft dictated on 2 Draft placed before author Draft proposed & placed before 3 the Second Member Draft discussed/approved by 4 Second Member Approved Draft comes to the Sr. 5 PS/PS 6 Kept for pronouncement 7 File sent to Bench Clerk Date on which the file goes to 8 Head Clerk 9 Date on which file goes to A.R. 10 Date of Dispatch of order