Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, HYDERABAD BENCH “A”, HYDERABAD
No.342/Hyd/2019) against the order of the Ld. CIT(A)-5, Hyderabad in appeal No.0496/2016-17/CIT(A)-5, dated 3/1/2019 passed U/s. 144 r.w.s 250(6) of the Act for the A.Y. 2014-15.
The assessee has raised five grounds in its appeal and they are extracted herein below for reference:
“1. The Ld. CIT(A) has erred in law and facts passing order U/s. 250 of the Act.
2. The Ld. CIT(A) has erred in law and in facts in confirming the addition of Rs.1,25,283/- on account of trade payables from Ritex Overseas Pvt Ltd U/s. 68 of the Act.
3. The Ld. CIT(A) has erred in law and in facts in confirming the disallowance U/s. 40(a)(ia) of the Act of Rs. 5,28,039/-.
4. The Ld. CIT(A) has erred in law and in facts in confirming the addition of Rs.17,24,576/- being 75% of various expenses in the hands of the appellant.
5. The appellant craves leave of your honours to add to, alter, amend and /or delete all or any of the foregoing grounds of appeal
.”
3. The Revenue has raised six grounds in its appeal and they are extracted herein below for reference:
“1. Whether in the facts and circumstances, the Ld. CIT(A) is correct in not upholding the addition of Rs. 23,88,17,118/- on account of trade payable when the case is classic case of rotation of turnover and no proper supporting evidence for transactions relating to purchase/sale/transport clearly indicate that these were sham transactions.
2. Whether in the facts and circumstances, the order of the Ld. CIT(A) in deleting the addition of Rs.23,88,17,118/- on account of trade payable and neglecting the submissions of the Assessing Officer in his remand report wherein it was stated that purchase/sale bills were self made and no transport bills were produced by the assessee as evidence of expenditure, the evidence of receipt/payment of monies were also not furnished by the assessee and both the purchases as well as sales were not supported by evidence is not perverse, illegal and like to be set aside.
Whether in the facts and circumstances, the Ld. CIT(A) is correct in not upholding the addition on account of trade payables when he himself has observed that most of the expenses are in cash and the substantial trading turnover being a mere rotation.
Whether in the facts and circumstances, the CIT(A) is erred in deleting the addition on account of trade payables when there was no material on record to prove or even remotely suggest that the trade activity has actually happened.
5. Whether the Ld. CIT(A) is justified in not appreciating that the assessee is under a legal obligation to prove the genuineness of the transaction, identity of creditor and creditworthiness of the creditors, to the satisfaction of the Assessing Officer so as to discharge the primary onus. In the instant case, the assessee has failed to prove the genuineness of transaction. Hence, the assessee has failed to discharge the onus contemplated by section 68 of the Income Tax Act, 1961.
6. Any other ground that may be raised at the time of hearing.”
4. At the outset, the Ld. AR submitted before us that the assessee could not appear before the ld. AO at the time of assessment proceedings therefore the Ld. AO passed ex-parte order. It was further submitted that even before the Ld. CIT (A), the assessee could not submit sufficient evidence to justify its stand. Therefore the ld. CIT (A) confirmed the order of the Ld. AO partially. The ld. AR further requested that the matter may be remitted back to the file of the Ld. AO in order to provide one more opportunity to the assessee so that the assessee may be able to substantiate its claim in an effective manner as the additions are enormous and unjustifiable. The Ld. DR on the other hand prayed for confirming the order of the Ld. AO. The Ld. DR further submitted that if the Bench decides to remit the assessee’s appeal back to the file of the Ld. AO then the Revenue’s Appeal may also be remitted back to the file of the ld. AO for fresh consideration.
We have heard the rival submission and carefully perused the materials on record. After considering the submission of the both the parties and quantum of addition, we are of the view that one more opportunity is required to be provided to the assessee in order to argue its claim effectively. Accordingly, we hereby remit back the appeal of the assessee as well as the appeal of the Revenue to the file of the Ld. AO for de novo consideration. The Ld. AO is also hereby directed to admit and examine any fresh evidence adduced by the assessee in order to substantiate its claim and thereafter pass appropriate order in accordance with law and merit after providing proper opportunity to the assessee of being heard. At the same time, we also caution the assessee to promptly cooperate with the Ld. Revenue Authorities in their proceedings failing which they shall be at liberty to pass appropriate orders in accordance with law and merit based on the materials on record.
In the result, both the appeals of the assessee and the Revenue are allowed for statistical purposes as indicated herein above.
Pronounced in the open Court on the 18th January, 2022.