INCOME TAX OFFICER, WARD-1, SURYAPET vs. BHAGWATI SALES CORPORATION, BHONGIRI

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ITA 1625/HYD/2019Status: DisposedITAT Hyderabad11 August 2021AY 2013-143 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the matter needed to be re-examined by the AO. The AO was to be given an opportunity to review the documents presented to the CIT(A) before a final decision was made.

What were the facts?

The Revenue appealed the CIT(A)'s order which granted relief to the assessee. The CIT(A) had considered additional evidence without obtaining a remand report from the AO. The Revenue argued that the CIT(A)'s order should be set aside.

What were the issues?

Whether the CIT(A) erred by considering additional evidence without a remand report from the AO, and whether the disallowance under Section 40A(3) was justified.

Which sections of the Income-tax Act were involved?

Section 143,Section 263,Section 40A(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCH “SMC”, HYDERABAD

Before: SHRI A. MOHAN ALANKAMONY

For Appellant: Shri S. Rama Rao
For Respondent: Shri Vijay Garladinne, DR
Hearing: 26/07/2021Pronounced: 12/08/2021

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH “SMC”, HYDERABAD BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER Assessment Year:2013-14 Income Tax Officer, Vs. M/s. Bhagwati Sales Ward-1, Corporation, Suryapet. D.No.1-7-77, R.E. Nagar, Bhongiri – 508116. PAN: AAFFB 4269 F (Appellant) (Respondent) Assessee by: Shri S. Rama Rao Revenue by: Shri Vijay Garladinne, DR Date of hearing: 26/07/2021 Date of pronouncement: 12/08/2021 ORDER PER A. MOHAN ALANKAMONY, AM.:

This appeal is filed by the Revenue against the order of the Ld. CIT (A)-3, Hyderabad in appeal No. 10338/CIT(A)-3/2018-19, dated 16/08/2019 passed U/s. 143(3) r.w.s 263 of the Act for the assessment year 2013-14.

2.

The Revenue has raised four grounds in its appeal and they are extracted herein below for reference:-

“1. The Ld. CIT(A) erred both in law and on facts of the case. 2. On the facts and circumstances of the case and in law, whether the Ld. CIT(A) is correct in holding that the additions made by the A.O. with regard to the issues relating to disallowance of interest on partners drawings of Rs. 3,20,750/-, payments of sales advances to Annapurna Sales of Rs. 1,57,053/- and payment of advance to Sri Sai Santhosh Canteen & Stationery of Rs. 29,070/- are beyond jurisdiction ignoring that vide 263 order dated 31/3/2016 was set aside to re-do the assessment in accordance with law? 3. On the facts and circumstances of the case and in law, whether the Ld. CIT(A) is correct in allowing appeal of the assessee on disallowance U/s. 40A(3) of the IT Act, 1961 ignoring that the assessee failed to establish that the payments made in cash to a person in a day were not exceeding Rs. 20,000/-.

4.

Any other ground (s) that may be urged at the time of hearing.”

3.

At the outset, the Ld. DR submitted before us that the Ld. CIT(A) granted relief to the assessee without obtaining proper remand report from the Ld. A.O. It was therefore pleaded that the order of the Ld. CIT(A) may be set-aside and the order of the Ld. A.O. may be confirmed. The Ld. AR on the other hand argued in support of the order of the Ld.CIT(A).

4. Having heard the rival submissions and considering the facts and circumstances of the case, I am of the view that the matter is required to be re-visited by the Ld. A.O thereby affording an opportunity to the Ld.AO to examine the documents produced before the Ld. CIT(A) because it is apparent from the order of the Ld. CIT(A) that the Ld.CIT(A) had arrived at a contrary conclusion based on certain additional evidence without obtaining remand report from the Ld.AO. Accordingly, the appeal of the assessee is hereby remitted back to the file of the Ld. A.O. for de-novo consideration.

5.

In the result, appeal of the Revenue is allowed for statistical purposes.

Pronounced in the open Court on the 12th August, 2021.

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