Itta/236/2022 Of The Pr. Commissioner Of Income Tax-2 v. M/S. Dharani Sheltors Private Limited

IN THE HIGH COURT FOR THE STATE OF TELANGANAAT HYDERABAD WEDNESDAY ,THE TENTH DAY OF AUGUSTTWO THOUSAND AND TWENTY TWO PRESENT THE HONOURABLE THE CHIEF JUSTICE UJJAL BHUYAN AND THE HONOURABLE SRI JUSTICE C.V. BHASKAR REDDY INCOME TAX TRIBUNAL APPEAL NO: 236 OF 2022 (lncome Tax Tribunal Appeal Under Section 260 A of the lncome Tax Act,1961 against the order of the lncome Tax Appellate Tribunal, Hyderabad Bench ' A', Hyderabad in ITA Nos. 507 / Hyd 12020 for Assessment Year 2014-2015 dated:15.1'1.2021 , preferred against the Order of the Commissioner of lncome Tax(Appeals ) -5, Signature Towers, Kondapur, Hyderabad-500084, in Appeal. No.10456 12O16-17/C|T(A)-5 dated.13.07.2020 for the Assessment Yeat 2014-15,preferred against the Order of the lncome Tax Officer, Ward -'17(1 ) Hyderabad, inPAN No. AACCD8402E, dated: 31.03.20"14 forthe Assessment Year 2014-2015.Between: The Pr. Commissioner of lncome Tax-2, 6th Floor, Signature Towers, Kondapur,Opp Botanical Gardens, Hyderabad.Opp Botanical Gardens, Hyderabad. ...APPELLANT AND M/s. Dharani Sheltors Private limited, B-1-206/A, Raghavendra Hills,Mylardevpally, PAN Near Katdan, Rajendra Nagar [Vlandal,Hyderabad - 500 005 ...RESPONDENT I Counsel for the Appellant:SRl. A RADHA KRISHNA (Sr SC For lT DEPT)Counsel for the Respondents: S.C for l.T DEPTThe Court made the following: JUDGMENT THE HON'BLE THE CHIEF JUSTICE UJJAL BHI,IYAN AND THE HON'BLE SRI JUSTICE C.V.BHASKAR REDDY I.T.T.A. No.236 of 2022 JUDGMENTi Per the Hotl'ble the Chief Justtce {.ljjal Bhuyaft) Heard Mr. A.Radha Krishna, learned Standing Counsel,Income Tax Department for the appellant. 2. Revenue as the appellant has preferred the presentappeal under Section 260A of the Income Tax Act, 1961 (brieflyreferred to hereinafter as 'the Act') assailing the order dated15.11.2021 passed by the Income Tax Appellate Tribunal,Hyderabad 'A' Bench, Hyderabad (Tribunal)tnITA.No.5O7/Hydl2O2O for the assessment year 2014-15. 3. The appeal has been liled proposing the followingquestion as substantial question of law: "Whether the ITAT was right in law in holing that the AssessingOffrcer has not found any adr.erse material during the course ofremand proceedings despite the fact that it was found during theremand proceedings despite the fact that it was found during theremand proceedings that the capacity to invest was established onlyto the extent of Rs. 1,06,I6,720.00 out of the total advances addedunder Section 68 of the Act?"to the extent of Rs. 1,06,I6,720.00 out of the total advances addedunder Section 68 of the Act?" HC] & CVBRJ LT.T.A.No.236 of 2022 4. Respondent before us is an assessee under the Act having the status of company. By the assessment order dated31 .12.2016 passed by the Income Tax Officer, Ward-17(1),Hyderabad (Assessing Officer) under Section 1a3(3) of the Act,addition of Rs.6,54,86,580.00 was made to the returned income ofthe respondent under Section 68 of the Act on account ofunexplained cash credits. Be it it stated that in its that in its in its return of income for theof income for theincome for thefor thethe 5. Be it it stated that in its that in its in its return of income for theof income for theincome for thefor thetheaforesaid assessment year, assessee had declared income ofRs.43,43,100.00. The case ',r,as selected for scrutiny. In thecourse of the assessment proceedings, Assessing Officer held thatrespondent had failed to prove receipt of payments in cash to theextent of Rs.6,54,86,580.00 which was accordingll, added to theincome of the respondent under Section 68 of the Act. 6. Against the assessment order dated 31.12.2016,respondent preferred appeal before the Commissioner of lncomeTax (Appeals)-5, Hyderabad (briefl_v referred to hereinafter as'CIT(A)). By the appellate order dated 13.O7.2O2O, the addition ofRs.6,54,86,580.00 was deleted. According to CIT(A), r<:spondent II had filed written submissions belore the Assessing Oflicer 6. Against the assessment order dated 31.12.2016,respondent preferred appeal before the Commissioner of lncomeTax (Appeals)-5, Hyderabad (briefl_v referred to hereinafter as'CIT(A)). By the appellate order dated 13.O7.2O2O, the addition ofRs.6,54,86,580.00 was deleted. According to CIT(A), r<:spondent II had filed written submissions belore the Assessing Oflicer furnishing therewith identity of the purchasers, confirmationletters and details of transactions. Assessing Oflicer had notdisputed the identity of the purchasers nor has disputedgenuineness of the transactions. The customers had the capacityto invest but Assessing Officer had ignored the confirmationletters, copies of Income Tax returns, Pan Numbers and bankdetails of the purchasers. First appellate authority noted thatthere had to be some cogent reasons and materials for theAssessing Officer to reject the explanation and to make additionsunder Section 68 of the Act. He could not have gone into therea,lm of suspicion. Thereafter lirst appellate authority held ASfollows: "lt is noticed that the Assessing Officer has neither doubtedtheir identity, genuineness nor any adverse comments in respect ofthe conflrmations so obtained by issuing summons. If theAssessing Oflicer has to disregard the documents so obtained, hecould have given a clear finding and taking the issue to the logicalconclusion. Not only this it appears that the approach adopted bythe oflicer would have due cffect of ta-xing the same transactiontwice as the Assessing Officer has accepted the turnover of theassessee. [n the background of the aloresaid discussions, theAssessing Officer is not justified in making the addition in dispute.lccordingly [the ][addition ][of ][Rs.6,54,86,580/- ][made by the ][Assessing]\ II \ Ofhcer is hereby deleted. Thus, the ground Nos.2 to 8 raised by theassessee on this issue are allowed." 7 . . 7 . . Aggrieved by the aforesaid order of the CIT(A), Revenuepreferred appeal before the Tribunal being ITA.No.5O7 lHydl2O2OTribunal did not find any substance in the challenge made by theRevenue and noted that lirst appellate authority had gone by theAssessing Officer's own remand report dated 14.06.2019 verifyingthe entire advances. Tribunal thereafter held that respondent hadfiled a detailed compilation before the Assessing Officer furnishingall relevant details. In the backdrop of the above factual position,Tribunal uide the order dated 15.11.2021 dismissed the appeal ofthe Revenue.preferred appeal before the Tribunal being ITA.No.5O7 lHydl2O2OTribunal did not find any substance in the challenge made by theRevenue and noted that lirst appellate authority had gone by theAssessing Officer's own remand report dated 14.06.2019 verifyingthe entire advances. Tribunal thereafter held that respondent hadfiled a detailed compilation before the Assessing Officer furnishingall relevant details. In the backdrop of the above factual position,Tribunal uide the order dated 15.11.2021 dismissed the appeal ofthe Revenue. 8. On tl-rorough consideration of all aspects of the matter,we are of the vielr, that the proposed substantial question of lau, asframed do not arise from the order passed tn appeal by theTribunal. Nol. to speak of any substantial question of law,noquestion of law can be said to have arisen out of the order dated15.11.2021 passed by the Tribunal. I \ 5HCJ & CVBRJ1.T.7'. A. No.2 36 of 202 2 9. Consequently, the appeal liled by the Revenuedismissed. However, there shall be no order as to costs. 1S 10. As a sequel, miscellaneous applications pending, ifany, in this Appeal, shall stand closed. SD/-B.S.CHINJEEVIJOINIS//TRUE COPY//SECN OFFICER To, 1 . The lncome Tax Appellate Tribunal, Hyderabad Bench ' A ', Hyderabad2. The Commissioner of lncome Tax (Appeals ) -5, Signature Towers,Kondapur, Hyderabad-5000842. The Commissioner of lncome Tax (Appeals ) -5, Signature Towers,Kondapur, Hyderabad-500084 3. The lncome Tax Officer, Ward -17(1), Hyderabad. 4. One CC to SRl. A RADHA KRISHNA (SC For lT. DEPT) 5. Two CD Copies 6. One Spare Copy ,\$k I \ 5HCJ & CVBRJ1.T.7'. A. No.2 36 of 202 2 9. Consequently, the appeal liled by the Revenuedismissed. However, there shall be no order as to costs. 1S 10. As a sequel, miscellaneous applications pending, ifany, in this Appeal, shall stand closed. SD/-B.S.CHINJEEVIJOINIS//TRUE COPY//SECN OFFICER To, 1 . The lncome Tax Appellate Tribunal, Hyderabad Bench ' A ', Hyderabad2. The Commissioner of lncome Tax (Appeals ) -5, Signature Towers,Kondapur, Hyderabad-5000842. The Commissioner of lncome Tax (Appeals ) -5, Signature Towers,Kondapur, Hyderabad-500084 3. The lncome Tax Officer, Ward -17(1), Hyderabad. 4. One CC to SRl. A RADHA KRISHNA (SC For lT. DEPT) 5. Two CD Copies 6. One Spare Copy ,\$k HIGH COURT DATED:10/0812022 JUDGMENl'ITTA.No.236 of 2022 DISN,IISSTNC; I1-TA :.:-:\)5EP[N)_]