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Income Tax Appellate Tribunal, Hyderabad ‘ B ‘ Bench, Hyderabad
Before: Smt. P. Madhavi Devi & Shri B. Ramakotaiah
Per Smt. P. Madhavi Devi, J.M.
This is assessee’s appeal for the A.Y 2005-06 against the order of the CIT (A)-5, Hyderabad, dated 30.03.2016.
Brief facts of the case are that the assessee company, engaged in civil contracts, filed its return of income on 30.10.2005 for the A.Y 2005-06 declaring a total loss of (-) Rs.71,85,204. The return was processed u/s 143(1) of the Act on 20.04.2006. Thereafter, it was found that the assessee has received Rs.5,79,808 as seignerage amount but has not disclosed it as income on the ground that it was the amount collected in excess over a period of time in previous years and it does not relate to the
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ITA No 820 of 2016 YRCR Infrastructure Ltd Hyderabad .
present A.Y. The AO observed that the amount was claimed in earlier years and therefore, has to be offered for tax u/s 41(1) of the Act. Observing that the assessee has failed to disclose the same as income u/s 41(1) of the Act for the relevant A.Y, a notice u/s 148 was issued on 21.11.2008.
In response to the said notice, the assessee filed a letter dated 11.12.2008 requesting to treat the return filed on 30.10.2005 as the return filed in response to the said notice. Thereafter, a notice u/s 142(1) was issued directing the assessee to produce books and other explanations for not including the same as its income for the relevant A.Y. The assessee, vide its reply dated 10.02.2009, stated that the Executive Engineer, SRBC Division No.2, Pandyam has to furnish the information as the said authorities have not furnished the information, the same could not be filed, the AO may pursue with the said authority and get the information. The AO however, held that there is no dispute regarding the receipt of the sum of Rs.5,79,808 from the assessee’s side and therefore, it has to be assessed u/s 41 of the Act. Accordingly, he brought it to tax.
Aggrieved, the assessee preferred an appeal before the CIT (A), who confirmed the addition and the assessee is in second appeal before us.
The learned Counsel for the assessee while reiterating the submissions made before the authorities below submitted that the assessee had offered the net seignerage charges of
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Rs.52,282/- to tax as is evident from the page 70 of the paper book which is schedule-A forming part of the P&L A/c. He has also drawn our attention to the Govt. of Andhra Pradesh Irrigation & CAD (PW) Deptt. letter dated 5.5.2009, giving the details of the receivables which includes the refund of seignerage charges and also the recoveries including the recovery of seignerage charges and the net amount which has been paid to the assessee vide cheque dated 30.10.2004.He has also drawn our attention to Page 52 of the Paper Book, wherein, the details of the financial bill of SRBC Book I are given. Therefore, according to the learned Counsel for the assessee, the AO as well as the CIT (A) have failed to consider the issue in its proper perspective and prayed for the deletion of the addition.
The learned DR, however, supported the orders of the authorities below.
Having regard to the rival contentions and the material on record, we find that both the AO as well as the CIT (A) have not considered the details furnished by the assessee and the contents of the letter from the Govt. of Andhra Pradesh, and also that the assessee has offered the net income to tax and therefore, gross seignerage charges need not to be brought to tax u/s 41(1) of the Act for the relevant A.Y as it would amount to double taxation. In view of the same, we deem it fit and proper to remand the issue to the file of the AO with a direction to reconsider the issue on merit in accordance with law and after considering the letter from the Executive Engineer, SRBC Division No.2, Pandyam, Govt. of A.P.
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and the books of A/c of the assessee and examining if the assessee has offered the net income to tax. Needless to mention that the assessee shall be given a fair opportunity of being heard.
In the result, assessee’s appeal is treated as allowed for statistical purposes. Order pronounced in the Open Court on 6th April, 2018.
Sd/- Sd/- (B. Ramakotaiah)) (P. Madhavi Devi) Accountant Member Judicial Member
Hyderabad, dated 6th April 2018. Vinodan/sps
Copy to:
1 S/Shri K.Vasantkumar, AV Raghuram, Advocates, Flat No.610, 6th Floor, Babukhan Estate, Basheerbagh, Hyderabad 500001 2 Dy. CIT Circle 3(3) (presently ITO) Ward 17(4) Hyderabad 3 CIT (A)-5 Hyderabad 4 Pr. CIT – 5 Hyderabad 5 The DR, ITAT Hyderabad 6 Guard File
By Order
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