PCMR INFRASTRUCTURE PRIVATE LIMITED,HYDERABAD vs. ASST. COMMISSIONER OF INCOME TAX, CIRCLE-16(2), HYDERABAD

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ITA 1369/HYD/2019Status: DisposedITAT Hyderabad03 March 2021AY 2016-174 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee failed to explain the discrepancies before the lower authorities. Therefore, in the interest of justice, the issue was remanded to the AO for reconsideration.

What were the facts?

The assessee company's return showed lower receipts than reflected in Form 26AS. The assessee claimed the difference was wrongly credited, but without substantiation, the AO added it as unexplained income. The CIT(A) dismissed the appeal due to non-appearance.

What were the issues?

Whether the addition of unexplained income based on Form 26AS is justified when the assessee claims the entries are erroneous and requests an opportunity to substantiate.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 142(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Hyderabad ‘ B ‘ Bench, Hyderabad

Before: Smt. P. Madhavi Devi & Shri A. Mohan Alankamony

Hearing: 25/02/2021Pronounced: 03/03/2021

This is assessee’s appeal for the A.Y 2016-17 against the order of the CIT (A)-4, Hyderabad, dated 19.6.2019.

2.

Brief facts of the case are that the assessee company, engaged in the business of contracts, e-filed its return of income for the A.Y 2016-17 on 14.10.2016 admitting total income of Rs.1,08,63,130/-. The case was selected for scrutiny under CASS and accordingly, notices u/s 143(2) and 142(1) were issued and served on the assessee. In response to the same, the assessee furnished the requisite information called for, electronically. On perusal of the same, the AO noticed that Form 26AS reflected higher gross receipts of Rs.33,99,73,632/- as against the receipts shown in the return of income at Rs.19,47,65,094/-. When the Page 1 of 4 assessee was asked to clarify the difference in the receipts amounting to Rs.14,52,08,538/-, the assessee replied that the transactions to the extent of Rs.14,52,08,538/- are not related to it and that they were wrongly credited to its 26AS. But since the assessee did not substantiate this claim with any documentary evidence, the difference of Rs.14,52,08,538/- was treated as unexplained income and brought to tax. Aggrieved, the assessee preferred an appeal before the CIT (A), but as none appeared before the CIT (A) on behalf of the assessee, the CIT (A) dismissed the appeal and consequently confirmed the addition made by the AO and the assessee is in second appeal before the Tribunal by raising the following grounds of appeal: “1. The order of the learned CIT (A) is against the law, weight of evidence and probabilities of case.

2. The learned CIT (A) ought to have appreciated that the contractee M/s. Ramky Infrastruture erroneously reflected an amount of Rs.30,43,67,015/- in the forms submitted to the Department, as against the actual amount of Rs,15,91,58,477/- as per the ledger account of the Ramky Infrastructure Ltd in the books of assessee.

3. The learned CIT (A) erred in not according one more opportunity to the assessee to clarify the turnover of the assessee as per Form No.26AS, which is rectified by the Contractee, subsequently by reflecting the correct amount and correct amount is reflected.

4. The learned CIT (A) erred in confirming the order of the AO wherein, an addition of Rs.14,52,08,538 is made solely on the basis Form No 26AS inspite of producing account copy of the Ramky Infrastructure Ltd in the books of assessee which are audited.

5. The learned CIT (A) ought to have verified the turnover reflected in Form No.26AS or should have directed the AO to verify the same, therefore, the order of the learned CIT is not correct.

6. The appellant craves leave to add to, amend or modify the above grounds of appeal either before or at the time of hearing of the appeal, if it is considered necessary.”

3.

The learned Counsel for the assessee submitted that if given an opportunity to present his case, the assessee will be in a position to explain the difference in its turnover and prayed for remand of the issue to the file of the CIT (A).

4.

The learned DR opposed the same stating that the assessee has not responded to the notices given by the CIT (A) and therefore, no further opportunity is to be given.

5.

Having regard to the rival contentions and the material on record, we find that the assessee has not explained the discrepancies either before the AO or before the CIT (A). Therefore, only in the interest of justice, we deem it fit and proper to remand the issue to the file of the AO for reconsideration of the issue in accordance with law. Needless to mention that the assessee should be given a fair opportunity of hearing and the assessee shall also cooperate with the AO by producing the necessary details before the AO for an early completion of the assessment.

6.

In the result, assessee’s appeal is treated as allowed for statistical purposes. Order pronounced in the Open Court on 3rd March, 2021.

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