ITAT Hyderabad Judgments — December 2021

DCIT, CENTRAL CIRCLE-2(4), HYDERABAD, HYDERABAD vs ADUNURU PALLAVI REDDY, HYDERABAD, HYDERABAD

ITA 531/HYD/2017[2013-14]Status: Disposed22 Dec 2021AY 2013-14Dismissed

The Tribunal held that no transfer of immovable property had occurred as the assessee had not received any consideration nor handed over possession during the relevant assessment year. The agreement was for joint development, and the amount received was a refundable security deposit.

TAJ GVK HOTELS & RESORTS LIMITED., HYD,HYDERABAD vs ACIT,CIRCLE-2(2) HYDERABAD, HYDERABAD

ITA 1450/HYD/2016[2012-13]Status: Disposed22 Dec 2021AY 2012-13Allowed

The Tribunal held that the assessee's significant expenditure on interiors, plant & machinery, and other essential hotel facilities constituted 'building' for the purpose of Section 35AD. The beneficial provision should be interpreted liberally, and the assessee's contribution was substantial enough to qualify for the deduction.

OPTISERV MUSKAN SERVICES PVT.LTD., HYD,HYDERABAD vs DCIT, CIRCLE-16(3), HYD, HYDERABAD

ITA 1247/HYD/2015[2005-06]Status: Disposed22 Dec 2021AY 2005-06Remanded

The ITAT held that the CIT(A) should have decided the appeal on merits as per Sections 250 & 251. The Tribunal found that the appeal against the order passed under Section 143(3) r.w.s. 263 was appealable before the CIT(A) under Section 246A.

DCIT, CENTRAL CIRCLE-2(4), HYDERABAD, HYDERABAD vs NAGAM DINAKAR REDDY, HYDERABAD, SECUNDERABAD

ITA 529/HYD/2017[2013-14]Status: Disposed22 Dec 2021AY 2013-14Dismissed

The Tribunal held that no transfer of immovable property had occurred as the assessee had not received any consideration nor handed over possession during the relevant assessment year. The agreement was for joint development, and the amount received was a refundable security deposit.

OPTISERV MUSKAN SERVICES PVT.LTD., HYD,HYDERABAD vs ITO, WARD-16(1), HYDERABAD, HYDERABAD

ITA 1111/HYD/2015[2005-06]Status: Disposed22 Dec 2021AY 2005-06Remanded

The ITAT held that the CIT(A) should have decided the appeal on merits as per Sections 250 & 251. The Tribunal found that the appeal against the order passed under Section 143(3) r.w.s. 263 was appealable before the CIT(A) under Section 246A.

DY. COMMISSIONER OF INCOME TAX, CIRCLE-16(2), HYDERABAD vs OCEAN PARK MULTITECH LIMITED, HYDERABAD

ITA 1038/HYD/2017[2010-11]Status: Disposed22 Dec 2021AY 2010-11Partly Allowed

The Tribunal allowed 50% of the repair and maintenance expenditure claim, holding that a 10% disallowance was just and proper. The disallowance of development expenditure was upheld due to lack of evidence. The Revenue's appeal regarding undisclosed income was remanded to the CIT(A) for fresh adjudication.

PATEL KNR HEAVY INFRASTRUCTURES LIMITED,HYDERABAD vs INCOME TAX OFFICER, WARD-16(1), HYDERABAD

ITA 1708/HYD/2018[2013-14]Status: Disposed22 Dec 2021AY 2013-14Remanded

The Tribunal found that the CIT(A) had not adjudicated the issues on merits as required by Section 250(6) of the Act. Therefore, the appeals were set aside for fresh adjudication.

DCIT, CENTRAL CIRCLE-2(4), HYDERABAD, HYDERABAD vs NAGAM SHASHIDHAR REDDY, HYDERABAD, HYDERABAD

ITA 530/HYD/2017[2013-14]Status: Disposed22 Dec 2021AY 2013-14Dismissed

The Tribunal held that no transfer of immovable property had occurred as the assessee had not received any consideration nor handed over possession during the relevant assessment year. The agreement was for joint development, and the amount received was a refundable security deposit.

DCIT, CENTRAL CIRCLE-2(4), HYDERABAD, HYDERABAD vs NAGAM SUGUNA, HYDERABAD, HYDERABAD

ITA 528/HYD/2017[2013-14]Status: Disposed22 Dec 2021AY 2013-14Dismissed

The Tribunal held that no transfer of immovable property had occurred as the assessee had not received any consideration nor handed over possession during the relevant assessment year. The agreement was for joint development, and the amount received was a refundable security deposit.

OCEAN PARK MULTITECH LTD, HYD,HYDERABAD vs DCIT, CIRCLE-16(2), HYDERABAD, HYDERABAD

ITA 734/HYD/2017[2010-11]Status: Disposed22 Dec 2021AY 2010-11Partly Allowed

The Tribunal allowed 50% of the repair and maintenance expenditure claim, holding that a 10% disallowance was just and proper. The disallowance of development expenditure was upheld due to lack of evidence. The Revenue's appeal regarding undisclosed income was remanded to the CIT(A) for fresh adjudication.

DCIT, CIRCLE-1(2), HYD, HYDERABAD vs BHAGYANAGAR INDIA LTD., SEC-BAD, SECUNDERABAD

ITA 1080/HYD/2016[2010-11]Status: Disposed16 Dec 2021AY 2010-11Partly Allowed

The Tribunal held that the expenditure incurred for soliciting FCCBs was not eligible for amortization under Section 35D and confirmed the disallowance. Regarding the discount on FCCBs, the Tribunal found merit in offsetting foreign exchange loss and directed the AO to reconsider the issue. For Section 14A, the Tribunal remitted the matter back to the AO to compute actual expenditure.

ASST. DIRECTOR OF INCOME-TAX (INTL.TXN)-II, HYDERABAD vs M/S MIDWEST GRANITE (P) LIMITED, HYDERABAD

ITA 724/HYD/2013[2005-06]Status: Disposed16 Dec 2021AY 2005-06Dismissed

The Tribunal held that the proceedings under Section 163(1) were initiated beyond the time limit prescribed under Section 149(3) of the Act. Consequently, the assessment orders treating the assessee as a representative-assessee were set aside.

ASST. DIRECTOR OF INCOME-TAX (INTL.TXN)-II, HYDERABAD vs M/S MIDWEST GRANITE (P) LIMITED, HYDERABAD

ITA 723/HYD/2013[2004-05]Status: Disposed16 Dec 2021AY 2004-05Dismissed

The Tribunal held that the proceedings under Section 163(1) were initiated beyond the time limit prescribed under Section 149(3) of the Act. Consequently, the assessment orders treating the assessee as a representative-assessee were set aside.

S. SHIVRAJ REDDY CONSTRUCTIONS, HYDERABAD,SECUNDERABAD vs ACIT, CIRCLE-4(1), HYDERABAD, HYDERABAD

ITA 177/HYD/2017[2009-10]Status: Disposed16 Dec 2021AY 2009-10Partly Allowed

The Tribunal upheld the disallowance under Section 40A(3) as the assessee failed to justify the cash payment. However, the issue under Section 40(a)(ia) was restored to the Assessing Officer for factual verification regarding payee assessment.

PREMKUMAR REDDY CHOWDAVARAM,HYDERABAD vs INCOME TAX OFFICER, WARD-13(1), HYDERABAD

ITA 2183/HYD/2017[2014-15]Status: Disposed16 Dec 2021AY 2014-15Remanded

The Tribunal found that the CIT(A)'s order was non-speaking and lacked proper adjudication. Therefore, the appeal was allowed, and the matter was restored to the CIT(A) for fresh adjudication.

SAMA RAMACHANDRA REDDY,HYDERABAD vs DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, HYDERABAD

ITA 165/HYD/2018[2006-07]Status: Disposed16 Dec 2021AY 2006-07Allowed

The Tribunal found merit in the assessee's case, noting that the CIT(A) had not considered the Tribunal's quantum order deleting the addition. The Tribunal also referred to its own co-ordinate bench's decision that non-payment of self-assessment tax does not attract penalty under section 271(1)(c) and that section 140A(3) renders the penalty mechanism inapplicable.

SRI AVANTIKA CONTRACTORS(I) LIMITED,HYDERABAD vs DY. COMMISSIONER OF INCOME TAX, CIRCLE-15(1), HYDERABAD

ITA 61/HYD/2018[2009-10]Status: Disposed16 Dec 2021AY 2009-10Dismissed

The Tribunal held that the assessee's reasons for non-compliance, such as lack of knowledge at local construction sites and changes in audit staff, were not valid excuses for mandatory TDS compliance. Therefore, the penalty imposed by the lower authorities was rightly upheld.

TALLURI VENKATA KRISHNA KISHORE,HYDERABAD vs ASST. COMMISSIONER OF INCOME TAX, CIRCLE-8(1), HYDERABAD

ITA 1397/HYD/2019[2010-11]Status: Disposed16 Dec 2021AY 2010-11Allowed

The Tribunal held that the addition was not justifiable as it was made solely on the basis of a third-party statement without any corroborating evidence. The reopening of assessment was also questioned.

NEKTAR THERAPEUTICS INDIA PRIVATE LIMITED,HYDERABAD vs DCIT CIRCLE-5(1), HYDERBAD

ITA 203/HYD/2021[2016-17]Status: Disposed16 Dec 2021AY 2016-17Partly Allowed

The Tribunal deleted the ALP adjustment, finding that no comparable transactions were cited and the TPO incorrectly used SBI rates instead of LIBOR. The disallowance of the 80G claim was restored for verification by the Assessing Officer.

ASST. DIRECTOR OF INCOME-TAX (INTL.TXN)-II, HYDERABAD vs M/S MIDWEST GRANITE (P) LIMITED, HYDERABAD

ITA 725/HYD/2013[2006-07]Status: Disposed16 Dec 2021AY 2006-07Dismissed

The Tribunal held that the proceedings under Section 163(1) were initiated beyond the time limit prescribed under Section 149(3) of the Act. Consequently, the assessment orders treating the assessee as a representative-assessee were set aside.

SATYANARAYANA REDDY MANNE,HYDERABAD vs ACIT CENTRAL CIRCLE-3(1), HYDERABAD

ITA 213/HYD/2021[2012-13]Status: Disposed15 Dec 2021AY 2012-13Dismissed

The Tribunal considered the assessee's request to withdraw the appeals. As the Revenue did not object, the Tribunal granted permission for the withdrawal.

SATYANARAYANA REDDY MANNE,HYDERABAD vs ACIT CENTRAL CIRCLE-3(1), HYDERABAD

ITA 216/HYD/2021[2016-17]Status: Disposed15 Dec 2021AY 2016-17Dismissed

The Tribunal considered the assessee's request to withdraw the appeals. As the Revenue did not object, the Tribunal granted permission for the withdrawal.

LAM PAUL SASHIKUMAR,HYDERABAD vs ASSISTANT COMMISSIONER OF INCOME TAX,CENTRAL CIRCLE-3(2), HYDERABAD

ITA 404/HYD/2021[2012-13]Status: Disposed15 Dec 2021AY 2012-13Allowed

The Tribunal held that since no incriminating material was found during the search related to the Rs. 10 lakh receipt, and the assessment was unabated, the addition could not be made. Following the precedent set in Kabul Chawla, the addition was deleted.

SATYANARAYANA REDDY MANNE,HYDERABAD vs ACIT CENTRAL CIRCLE-3(1), HYDERABAD

ITA 211/HYD/2021[2010-11]Status: Disposed15 Dec 2021AY 2010-11Dismissed

The Tribunal considered the assessee's request to withdraw the appeals. As the Revenue did not object, the Tribunal granted permission for the withdrawal.

SATYANARAYANA REDDY MANNE,HYDERABAD vs ACIT CENTRAL CIRCLE-3(1), HYDERABAD

ITA 212/HYD/2021[2011-12]Status: Disposed15 Dec 2021AY 2011-12Dismissed

The Tribunal considered the assessee's request to withdraw the appeals. As the Revenue did not object, the Tribunal granted permission for the withdrawal.

SATYANARAYANA REDDY MANNE,HYDERABAD vs ACIT CENTRAL CIRCLE-3(1), HYDERABAD

ITA 214/HYD/2021[2013-14]Status: Disposed15 Dec 2021AY 2013-14Dismissed

The Tribunal considered the assessee's request to withdraw the appeals. As the Revenue did not object, the Tribunal granted permission for the withdrawal.

SATYANARAYANA REDDY MANNE,HYDERABAD vs ACIT CENTRAL CIRCLE-3(1), HYDERABAD

ITA 215/HYD/2021[2015-16]Status: Disposed15 Dec 2021AY 2015-16Dismissed

The Tribunal considered the assessee's request to withdraw the appeals. As the Revenue did not object, the Tribunal granted permission for the withdrawal.

MAANAVEEYA DEVELOPMENT & FINANCE PRIVATE LIMITED,HYDERABAD vs DY. COMMISSIONER OF INCOME TAX, CIRCLE-16(2), HYDERABAD

ITA 1507/HYD/2018[2013-14]Status: Disposed14 Dec 2021AY 2013-14Partly Allowed

The Tribunal held that the CCDs were received in Euros, not Indian Rupees, and the basis for the 11% interest payment was unsubstantiated. Therefore, the TPO's adoption of LIBOR+200 for computing the arm's length interest rate was upheld.

MAANAVEEYA DEVELOPMENT & FINANCE PRIVATE LIMITED,HYDERABAD vs DY. COMMISSIONER OF INCOME TAX, CIRCLE-16(2), HYDERABAD

ITA 1682/HYD/2018[2014-15]Status: Disposed14 Dec 2021AY 2014-15Partly Allowed

The Tribunal held that the CCDs were received in Euros, not Indian Rupees, and the basis for the 11% interest payment was unsubstantiated. Therefore, the TPO's adoption of LIBOR+200 for computing the arm's length interest rate was upheld.

MAANAVEEYA DEVELOPMENT & FINANCE PRIVATE LIMITED, HYDERABAD,HYDERABAD vs DCIT, CIRCLE-16(2), HYDERABAD, HYDERABAD

ITA 565/HYD/2017[2012-13]Status: Disposed14 Dec 2021AY 2012-13Partly Allowed

The Tribunal held that the CCDs were received in Euros, not Indian Rupees, and the basis for the 11% interest payment was unsubstantiated. Therefore, the TPO's adoption of LIBOR+200 for computing the arm's length interest rate was upheld.

DY. COMMISSIONER OF INCOME TAX, CIRCLE-16(2), HYDERABAD vs MAANAVEEYA DEVELOPMENT & FINANCE PRIVATE LIMITED, HYDERABAD

ITA 1506/HYD/2018[2013-14]Status: Disposed14 Dec 2021AY 2013-14Partly Allowed

The Tribunal held that the CCDs were received in Euros, not Indian Rupees, and the basis for the 11% interest payment was unsubstantiated. Therefore, the TPO's adoption of LIBOR+200 for computing the arm's length interest rate was upheld.

DCIT, CIRCLE-16(2), HYDERABAD, HYDERABAD vs MAANAVEEYA DEVELOPMENT & FINANCE PRIVATE LIMITED, HYDERABAD, HYDERABAD

ITA 149/HYD/2017[2011-12]Status: Disposed14 Dec 2021AY 2011-12Partly Allowed

The Tribunal held that the CCDs were received in Euros, not Indian Rupees, and the basis for the 11% interest payment was unsubstantiated. Therefore, the TPO's adoption of LIBOR+200 for computing the arm's length interest rate was upheld.

SHARAN CHARITABLE TRUST,HYDERABAD vs COMMISSIONER OF INCOME TAX,(EXEMPTIONS), HYDERABAD

ITA 423/HYD/2021[NA]Status: Disposed14 Dec 2021Remanded

The Tribunal condoned the delay in filing the appeal and, considering the pandemic situation, decided to provide the assessee with one more opportunity to furnish the required details to the DCIT (Exemptions). The matter was remitted back to the DCIT for fresh adjudication.

DY. COMMISSIONER OF INCOME TAX, CIRCLE-16(2), HYDERABAD vs MAANAVEEYA DEVELOPMENT & FINANCE (P) LIMITED, HYDERABAD

ITA 1811/HYD/2018[2014-15]Status: Disposed14 Dec 2021AY 2014-15Partly Allowed

The Tribunal held that the CCDs were received in Euros, not Indian Rupees, and the basis for the 11% interest payment was unsubstantiated. Therefore, the TPO's adoption of LIBOR+200 for computing the arm's length interest rate was upheld.

SANJAY GUPTA,HYDERABAD vs DY. COMMISSIONER OF INCOME TAX, CIRCLE-3(1), HYDERABAD

ITA 1787/HYD/2019[2012-13]Status: Disposed14 Dec 2021AY 2012-13Partly Allowed

The Tribunal upheld the disallowance of LTCG exemption, finding the transactions to be bogus based on evidence of shell companies and dummy directors. However, the disallowance of financial costs was remanded back to the AO for de novo consideration with directions to admit additional evidence.

DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(3), HYDERABAD vs ASR ENGINEERING AND PROJECTS LIMITED, HYDERABAD

ITA 227/HYD/2019[2014-15]Status: Disposed14 Dec 2021AY 2014-15Partly Allowed

The Tribunal found that while the CIT(A) was correct in reducing the disallowances, the reduction to 1-2% was too low. The Tribunal restored the disallowances to 50% of the amounts added back in the assessment order.

MAANAVEEYA DEVELOPMENT & FINANCE PRIVATE LIMITED, HYDERABAD,HYDERABAD vs ACIT, CIRCLE-16(2), HYDERABAD, HYDERABAD

ITA 134/HYD/2017[2011-12]Status: Disposed14 Dec 2021AY 2011-12Partly Allowed

The Tribunal held that the CCDs were received in Euros, not Indian Rupees, and the basis for the 11% interest payment was unsubstantiated. Therefore, the TPO's adoption of LIBOR+200 for computing the arm's length interest rate was upheld.

SAJEEVI KARUPPUSWAMY,HYDERABAD vs INCOME TAX OFFICER, WARD-8(1), HYDERABAD

ITA 104/HYD/2020[2014-15]Status: Disposed14 Dec 2021AY 2014-15Dismissed

The Tribunal condoned the delay in filing the appeal, finding it not attributable to the assessee. It upheld the Principal Commissioner's direction to redo the assessment, agreeing that the AO had not conducted proper inquiries regarding the assessee's turnover.

INCOME TAX OFFICER, WARD-1(1), HYDERABAD vs AMR GLOBAL INDUSTRIES LIMITED, HYDERABAD

ITA 41/HYD/2020[2011-12]Status: Disposed14 Dec 2021AY 2011-12Dismissed

The Tribunal held that the Revenue's appeal lacked merit as the assessee was a trader with back-to-back transactions, and the difference between purchases and sales was already assessed as business income. The Tribunal found the Revenue's stand to be contradictory by accepting 75% of the purchases and 100% of the sales.

USHA BAI,HYDERABAD vs INCOME TAX OFFICER, WARD-7(2), HYDERABAD

ITA 594/HYD/2020[2011-12]Status: Disposed14 Dec 2021AY 2011-12Remanded

The Tribunal restored the matter to the file of the CIT(A) with a direction to condone the delay and decide the appeal on merits. This was based on a similar issue in the assessee's own case where the Tribunal emphasized substantial justice over technicalities.

COGNIZANT TECHNOLOGY SOLUTIONS INDIA PRIVATE LIMITED(AS SUCCESSOR IN INTEREST OF ERSTWHILE CONGINANT TECHNOLOGY SERVICES PRIVATE LIMITED,CHENNAI vs DY. COMMISSIONER OF INCOME TAX, CIRCLE-1(2), HYDERABAD

ITA 1320/HYD/2018[2012-13]Status: Disposed13 Dec 2021AY 2012-13Partly Allowed

The Tribunal held that the PCIT's revision directions were justified in principle, as the Assessing Officer's failure to conduct detailed inquiries regarding the non-payment of employee contributions attracted the Section 263 revision mechanism. The Tribunal also noted prospective amendments to Sections 36(1)(va) and 43B.

ANDHRA PRADESH INDUSTRIAL DEVELOPMENT CORPORATION LIMITED,HYDERABAD vs DY. COMMISSIONER OF INCOME TAX, CIRCLE-1(1), HYDERABAD

ITA 685/HYD/2018[2013-14]Status: Disposed13 Dec 2021AY 2013-14Partly Allowed

The Tribunal directed the deletion of disallowance under Rule 8D(2)(ii) as investments were made from own funds. The disallowance under Rule 8D(2)(iii) was remitted to the AO for recalculation based on investments yielding exempt income. The issue of capital gains was also remitted to the AO for re-adjudication upon submission of documentary evidence.

RAGHU JANA,HYDERABAD vs INCOME TAX OFFICER, WARD-8(2), HYDERABAD

ITA 181/HYD/2020[2014-15]Status: Disposed13 Dec 2021AY 2014-15Remanded

The Tribunal, in the interest of justice, remitted the entire matter back to the Assessing Officer for de-novo consideration. The AO was directed to admit and examine the additional evidence and pass an appropriate order.

DWARKA PRASAD JHAWAR,ADILABAD vs INCOME TAX OFFICERS,WARD -1, MANCHERIAL

ITA 360/HYD/2021[2016-17]Status: Disposed13 Dec 2021AY 2016-17Allowed

The Tribunal found no merit in the PCIT's revision direction. It held that for revision jurisdiction to be exercised, the assessment must be both erroneous and prejudicial to revenue, and the AO had already initiated penalty proceedings under Section 271(1)(c). The Tribunal also noted that the PCIT had not specifically established that the assessee's income met the definition of 'undisclosed income' to attract Section 271AAB.

ASST. COMMISSIONER OF INCOME TAX, CIRCLE-4(1), HYDERABAD vs SRI KARNI JEWELLERS, HYDERABAD

ITA 1986/HYD/2018[2008-09]Status: Disposed9 Dec 2021AY 2008-09Allowed

The Tribunal held that since the purchases were entirely bogus and no goods were received, the entire amount should be disallowed. Estimating profit on non-existent purchases is inappropriate.

GAYATRI PROJECTS LIMITED, HYD,HYDERABAD vs DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2(4), HYD, HYDERABAD

ITA 1342/HYD/2017[2006-07]Status: Disposed9 Dec 2021AY 2006-07Dismissed

The Tribunal held that the assessee's business was in the nature of a 'works contract' as per the Explanation to Section 80IA, making it ineligible for the deduction, even if considered a developer. The Tribunal relied on a co-ordinate bench's decision and contractual terms indicating fixed payments and mobilization advances.

PROGRESSIVE DIGITAL MEDIA PRIVATE LIMITED, HYDERABAD,HYDERABAD vs DCIT, CIRCLE-16(2), HYDERABAD, HYDERABAD

ITA 209/HYD/2017[2012-13]Status: Disposed9 Dec 2021AY 2012-13Partly Allowed

The Tribunal held that the facts and circumstances were similar to a previous co-ordinate bench decision. It found no material change in the assessee's business model or the comparables' business models, thus upholding the exclusion of these three companies.

ASST. COMMISSIONER OF INCOME TAX, CIRCLE-4(1), HYDERABAD vs KARNI JEWELLERS, HYDERABAD

ITA 1987/HYD/2018[2008-09]Status: Disposed9 Dec 2021AY 2008-09Allowed

The Tribunal held that since the purchases were entirely bogus and no goods were received, the entire amount should be disallowed. Estimating profit on non-existent purchases is inappropriate.

FIMA PROPERTIES PRIVATE LIMITED,HYDERABAD vs INCOME TAX OFFICER, WARD-17(2), HYDERABAD

ITA 2085/HYD/2018[2015-16]Status: Disposed9 Dec 2021AY 2015-16Remanded

The Tribunal condoned the delay in filing the appeal, considering it was not intentional. The Tribunal restored the matter to the CIT(A) to decide the appeal on merits after providing the assessee with an opportunity to be heard and present evidence.

GAYATRI PROJECTS LIMITED, HYD,HYDERABAD vs DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2(4), HYD, HYDERABAD

ITA 1340/HYD/2017[2004-05]Status: Disposed9 Dec 2021AY 2004-05Dismissed

The Tribunal held that the assessee's business was in the nature of a 'works contract' as per the Explanation to Section 80IA, making it ineligible for the deduction, even if considered a developer. The Tribunal relied on a co-ordinate bench's decision and contractual terms indicating fixed payments and mobilization advances.