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Income Tax Appellate Tribunal, HYDERABAD BENCHES “A”: HYDERABAD
Before: SHRI SATBEER SINGH GODARA & SHRI LAXMI PRASAD SAHU
O R D E R PER L.P. SAHU, A.M.: This appeal filed by the Revenue is directed against CIT(A) - 5, Hyderabad’s order dated 10/06/2019 for AY 2008-09 involving proceedings u/s 143(3) r.w.s. 144 r.w.s. 254of the Income Tax Act, 1961 ; in short “the Act on the following grounds of appeal:
1. Whether in the facts and circumstances, the Id. CIT(A) is correct in deleting the addition made by Assessing Officer as per order of Hon'ble ITAT dated
:- 2 -: M/s Deepika Infratech Pvt. Ltd., Hyd.
28.04.2017 in 49/Hyd/2013 wherein it directed the assessee to submit list of reconciled sundry creditors as on 31.03.2008 to the tune of Rs.42.32Crores without considering the mobilization advance(which should be additional).
2. The Ld. CIT(A) erred in not appreciating the fact that the assessee submitted a list of 41 parties containing closing balances of sundry creditors as on 31.03.2008 at Rs. 27,74,20,20,898/- which included mobilisation advances of Rs. 14,82,83,269/-, which was not in line with the directions of Hon'ble ITAT.
3. The Ld. CIT(A) erred in deleting the addition of Rs. 14,82,93,269/- being mobilization advances which were included in the list of sundry creditors as on 31-03- 2008 in contradiction to the directions of the Hon'ble ITA T in its Order in ITA No. 749/Hyd/2013 dt. 28-04- 2017.
Any other ground that may be urged during appeal proceedings.”
Brief Facts of the Case are that the Appellant had filed its return of income for the Assessment Year 2008-09 on 13.04.2009 declaring total income of Rs. 1,30,40,019/-. The case was selected for scrutiny under CASS and the Assessment was completed under section 144 of the Income Tax Act, 1961 with total assessed income of Rs. 121,34,09,569/-. On an appeal, the CIT(A) gave relief on certain additions and thereafter Revenue preferred an appeal with the ITAT. The Hon'ble ITAT vide order in dated 28.04.2017 remitted back certain issues to the AO. The A.O. passed order u/s. 143(3) r.w.s.
:- 3 -: M/s Deepika Infratech Pvt. Ltd., Hyd.
144 r.w.s. 254 on 30.12.2018 determining total income at Rs. 34,92,23,720/- by making the following additions in respect of sundry creditors: 1. Rs. 18,00,88,299/- 2. Rs. 1,99,04,454/- 3. 10,05,88,166/-
3. When the assessee preferred an appeal before the CIT(A), the CIT(A) partly allowed the appeal of the assessee by observing in his order as under:
:- 4 -: M/s Deepika Infratech Pvt. Ltd., Hyd. :- 5 -: M/s Deepika Infratech Pvt. Ltd., Hyd. :- 6 -: M/s Deepika Infratech Pvt. Ltd., Hyd. :- 7 -: M/s Deepika Infratech Pvt. Ltd., Hyd. :- 8 -: M/s Deepika Infratech Pvt. Ltd., Hyd. :- 9 -: M/s Deepika Infratech Pvt. Ltd., Hyd. :- 10 -: M/s Deepika Infratech Pvt. Ltd., Hyd. :- 11 -: M/s Deepika Infratech Pvt. Ltd., Hyd. :- 12 -: M/s Deepika Infratech Pvt. Ltd., Hyd. :- 13 -: M/s Deepika Infratech Pvt. Ltd., Hyd. :- 14 -: M/s Deepika Infratech Pvt. Ltd., Hyd. :- 15 -: M/s Deepika Infratech Pvt. Ltd., Hyd. :- 16 -: M/s Deepika Infratech Pvt. Ltd., Hyd. :- 17 -: M/s Deepika Infratech Pvt. Ltd., Hyd. :- 18 -: M/s Deepika Infratech Pvt. Ltd., Hyd. :- 19 -: M/s Deepika Infratech Pvt. Ltd., Hyd. :- 20 -: M/s Deepika Infratech Pvt. Ltd., Hyd. :- 21 -: M/s Deepika Infratech Pvt. Ltd., Hyd. :- 22 -: M/s Deepika Infratech Pvt. Ltd., Hyd. :- 23 -: M/s Deepika Infratech Pvt. Ltd., Hyd. :- 24 -: M/s Deepika Infratech Pvt. Ltd., Hyd.
4. Aggrieved by the order of CIT(A), the revenue is in appeal before the ITAT.
Before us, the ld. DR besides relying on the order of the AO submitted that the CIT(A) has wrongly decided the appeal of the assessee without following the directions of the ITAT. Further, he submitted that in the earlier proceedings, the assessee could not substantiate its claim :- 25 -: M/s Deepika Infratech Pvt. Ltd., Hyd. before the AO. He, therefore, prayed that the order of the CIT(A) may be set aside and that of the AO be restored.
6. The ld. AR of the assessee, on the other hand, reiterated the submissions made before the revenue authorities and submitted that in the earlier proceedings due to lack of proper representation before the Tribunal, the decision was not in favour of the assessee, whereas, in the present proceedings, the discrepancies were explained before the CIT(A) and the same were accepted by the CIT(A) and partly allowed the appeal of the assessee. The assessee filed a paper book containing pages 1 to 166 of its paper book, which are placed on record in support of its case. The ld. AR further filed written submissions in support of assessee’s case, which are reproduced below: “1. This is the second round of appeal before the Hon'ble Tribunal for the asst. year 2008-09. The only issue in the Revenue's appeal is the relief granted by the ld. CIT(A) deleting addition of Rs.14,82,93,269 out of addition made by the AO in respect of sundry creditors at Rs.18,00,88,299. 2. The case of the Assessee right from the inception is that the sundry creditors amounting to Rs.27,74,20,898 (Rs.19,65,10,750 plus Rs.8,09, 10,148) appearing in the liabilities side of balance sheet includes mobilisation advance of Rs.14,82,93,269. The balance of Rs.12,91,27,628 pertained to sundry creditors. Apart from this, the Assessee had debit balances in sundry creditors (advances given to parties) to an extent of Rs.15,22,47,839. The details of the sundry creditors and mobilisation advance party wise are given at pages 132 to 136 (Vol -3 of paper book).
:- 26 -: M/s Deepika Infratech Pvt. Ltd., Hyd.
Similarly, details of sundry creditors of Rs.15,22,47,839 (debit balance) were produced before the authorities below and also discussed by the Hon'ble Tribunal in the earlier round at pages 27-29 of its order (running page 121-123 (Vol 2 of paper book). There is absolutely no dispute about this amount.
4. At this stage it is pertinent to notice the observation of the Hon'ble Tribunal at para 18.2 of its order in the earlier round (running page 124 vol -2). The Hon'ble Tribunal by inadvertence has observed that total sundry creditors including debit balance of Rs.15.22 crores should be Rs.42.32 crores. This observation has apparent mistake because as per balance sheet, the sundry creditors including mobilisation advance of Rs.14.82 crores was Rs.27.74 crores. Further, though it was contended throughout by submitting details that Sundry creditors include mobilisation advance, and that the amount of Rs.27,74,20,898 includes mobilisation advance of Rs.14,82,93,269. The submission of the assessee was that leaving aside mobilisation advance as mentioned above, sundry creditors in liabilities is Rs.12,91,27,628 for which statement and ledger accounts were filed before authorities below. Further, the assessee also has given complete details of debit balances in sundry creditors of Rs.15,22,47,839 which was accepted earlier. 5. The Hon'ble Tribunal though observed as above, has remitted back the issue (among other) to the file of AO with following direction: "Para 18.3 Hence, the assessee has to submit the details of sundry creditors of Rs.42.32 crores without considering the mobilization advances (which should be additional) and the party wise reconciliation has to be done as on 31.03.2008. we are in agreement with CIT(A) that debit balances has to be accepted, but, the assessee has to account for Rs.42.32 crores of sundry :- 27 -: M/s Deepika Infratech Pvt. Ltd., Hyd.
creditors and needs to be reconciled. In our considered view, the exercise done by various parties involved are not proper and a fresh reconciliation and confirmation needs to be done. Hence. we remit this issue back to the file of the AD with a direction to reconcile the whole sundry creditors as discussed above. Accordingly, this ground is treated as allowed for statistical purposes.”
It is submitted that though Hon 'ble Tribunal made observations (which apparently had some clerical errors), ultimately, the direction to the AO was to reconcile sundry creditors.
In the remand proceedings before AO, as could be seen from the reply dated 25.10.2018 filed before AO (Page 4-5 of Vol-I of paper book) the Assessee furnished party wise statement of sundry creditors along with ledger copies for the year ended 31.03.2008, including few of the confirmation letters. The Assessee also brought to the notice of the AO the inadvertent mistake in the order of Hon'ble ITAT. In spite of the complete details made available, the AO instead of reconciling the sundry creditors has sat on the observation of the Hon'ble Tribunal which was subject to reconciliation. The AO made addition of Rs.18,00,88,299 after considering the information submitted before him.
The Assessee carried the matter in appeal to ld. CIT(A). The ld. CIT(A) has carried out detailed analysis and the facts emanating from record has granted partial relief. The ld. CIT(A) deleted addition of Rs.14,82,93,269 out of addition made by the AO in respect of sundry creditors at Rs.18,00,88,299.
It is submitted that the ld. CIT(A) passed a detailed order carrying out the reconciliation of sundry creditors and as well as mobilisation advances as on 31.03.2008. It is respectfully submitted that on facts, there is no second opinion on the same. The AO in the present appeal does not dispute the factual findings of :- 28 -: M/s Deepika Infratech Pvt. Ltd., Hyd. the ld. CIT(A) but relies on the observations made by the Hon'ble Tribunal which were not final but were subject to reconciliation. For all the aforesaid reason, it is prayed that the order of the ld. CIT(A) may be upheld.”
7. We have considered the rival submissions and perused the material on record as well as gone through the orders of revenue authorities. It is observed that from the paper books filed by the assessee in which from the orders of the lower authorities, we find that the assessee has taken over the business of M/s Deepika Constructions on 29/02/2008 as a going concern and the assessment was made by the AO in respect of the erstwhile Deepika Constructions u/s 143(3) of the Act for the AY 2008-09 on 31/12/2010, the order of which is placed on record in the paper book at pages 147-151. Thereafter, another order was passed by the AO u/s 143(3) rws 254 and 263 of the Act, which is placed at pages 152-155 of the paper book, wherein the addition was made u/s 40A(3) of Rs. 43,62,329/- and disallowance u/s 40(a)(ia) of Rs. 2,50,000/- only. Therefore, the impugned assessee has taken over the erstwhile assessee’s assets and liabilities on 29/02/2008 and the details of which are available in the balance sheet a page nos. 141&142 of the paper book placed on record, in which, there are sundry creditors of Rs. 16.66 crores and mobilisation advances of Rs. 25.73 crores. In the second round of proceedings, the ld. CIT(A) has :- 29 -: M/s Deepika Infratech Pvt. Ltd., Hyd. examined the facts in detail. In view of our above observations, we find no infirmity in the order of the CIT(A) and upholding the same, we dismiss the grounds raised
by the revenue.
8. In the result, appeal of the revenue is dismissed in above terms. Pronounced in the open court on 13th January, 2022.