PIONEER GAS POWER LIMITED,HYDERABAD vs. DY. COMMISSIONER OF INCOME TAX, CIRCLE-16(2), HYDERABAD

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ITA 1753/HYD/2019Status: DisposedITAT Hyderabad21 November 2022AY 2011-122 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the amount advanced to M/s. Rashmi Enterprises, which was found to be a non-existent concern, constituted unexplained money. Therefore, the addition made by the Assessing Officer was sustained.

What were the facts?

The assessee company, engaged in electricity production, advanced Rs. 2.50 crore to M/s. Rashmi Enterprises. Information suggested Rashmi Enterprises was a non-existent concern, leading the AO to treat the advance as the assessee's own funds routed and received as unexplained money.

What were the issues?

Whether the amount advanced to a non-existent entity can be treated as unexplained money and added to the assessee's income under Section 68 of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 68,Section 147,Section 148

AI-generated summary — verify with the full judgment below

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

Before: Shri R.K. Panda & Shri Laliet Kumar

For Appellant: Shri Mohd. Afzal, Advocate
For Respondent: Shri B. Sunil Kumar, DR
Hearing: 17/11/2022Pronounced: 21/11/2022

आयकर अपील�य अ�धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ B ‘ Bench, Hyderabad Before Shri R.K. Panda, Accountant Member AND Shri Laliet Kumar, Judicial Member Assessment Year: 2011-12 M/s. Pioneer Gas Power Vs. Dy. C.I.T. Ltd, Hyderabad Central Circle 16(2) PAN:AAFCP2499C Hyderabad (Appellant) (Respondent) Assessee by: Shri Mohd. Afzal, Advocate Revenue by: Shri B. Sunil Kumar, DR Date of hearing: 17/11/2022 Date of pronouncement: 21/11/2022 ORDER Per R.K. Panda, A.M This appeal filed by the assessee is directed against the order dated 30.09.2019 of the learned CIT (A)-4, Hyderabad relating to A.Y.2011-12.

2.

This appeal was earlier dismissed by the Tribunal vide order dated 27.8.2021. Subsequently, the Tribunal vide M.A. No.16/Hyd/2022 order dated 15.7.2022 recalled its earlier order. Hence this is a recalled matter.

3.

Facts of the case, in brief, are that the assessee is a company and is engaged in the business of production, collection and distribution of electricity. It filed its return of income for the ITA 1753 of 2019 Pioneer Gas Power Ltd A.Y 2011-12 on 30.09.2011 declaring total income of Rs.72,87,783/-. The return was processed u/s 143(1) of the Act on 13.1.2012 resulting in a refund of Rs.33,080/-. Subsequently, the case was reopened u/s 147 of the I.T. Act on 28.03.2018 on the basis of information from the Jt. Director of Income Tax (OSD) (Inv.), Unit-2, Mumbai that the amount of Rs.2,50,00,000/- given to M/s. Rashmi Enterprises is a non-existent proprietary concern. Accordingly, notice u/s 148 of the Act was issued to the assessee. However, the assessee neither filed return of income nor furnished any reply to the notice u/s 148 of the I.T. Act.

3.1 During the course of the assessment proceedings, the Assessing Officer noted that the assessee has advanced an amount of Rs.2,50,00,000/- as short-term loans & advances to M/s. Rashmi Enterprises. Since the report of the Jt. Director (Inv.) has clearly indicated that M/s. Rashmi Enterprises is a non- existent proprietary concern and has no business link with the assessee, therefore, the Assessing Officer held that the entire modus operandi of the transaction by the assessee to the proprietary concern is nothing but a routing of the assessee’s own funds as loans and advances and receiving the same in the form of unexplained money. The Assessing Officer, therefore, in absence of any explanation from the assessee to the proposed addition presumed that the assessee has no objection to make addition of Rs.2,50,00,000/- to the income of the assessee.

4.

In appeal, the learned CIT (A) sustained the addition made by the Assessing Officer u/s 68 of the I.T. Act by observing as under: “6. I have carefully considered the assessment order, Grounds of appeal and the submissions of the appellant. It is seen from the Asst. Order, the appellant has not Page 2 of 6

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