The Pr. Commissioner Of Income ... vs M/S. Dharani Sheltors Private ...
2022 Latest Caselaw 4101 Tel

     THE HON'BLE THE CHIEF JUSTICE UJJAL BHUYAN

                                     AND

      THE HON'BLE SRI JUSTICE C.V.BHASKAR REDDY

                       I.T.T.A. No.236 of 2022


JUDGMENT:     (Per the Hon'ble the Chief Justice Ujjal Bhuyan)



     Heard Mr. A.Radha Krishna, learned Standing Counsel,

Income Tax Department for the appellant.


     2.     Revenue as the appellant has preferred the present

appeal under Section 260A of the Income Tax Act, 1961 (briefly

referred to hereinafter as 'the Act') assailing the order dated

15.11.2021 passed by the Income Tax Appellate Tribunal,

Hyderabad        'A'      Bench,          Hyderabad              (Tribunal)   in

ITA.No.507/Hyd/2020 for the assessment year 2014-15.


     3.     The appeal has been filed proposing the following

question as substantial question of law:


    "Whether the ITAT was right in law in holing that the Assessing
    Officer has not found any adverse material during the course of
    remand proceedings despite the fact that it was found during the
    remand proceedings that the capacity to invest was established only
    to the extent of Rs.1,06,16,720.00 out of the total advances added
    under Section 68 of the Act?"
                                  2                        HCJ & CVBRJ
                                                 I.T.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 dated

31.12.2016 passed by the Income Tax Officer, Ward-17(1),

Hyderabad (Assessing Officer) under Section 143(3) of the Act,

addition of Rs.6,54,86,580.00 was made to the returned income of

the respondent under Section 68 of the Act on account of

unexplained cash credits.

5. Be it stated that in its return of income for the

aforesaid assessment year, assessee had declared income of

Rs.43,43,100.00. The case was selected for scrutiny. In the

course of the assessment proceedings, Assessing Officer held that

respondent had failed to prove receipt of payments in cash to the

extent of Rs.6,54,86,580.00 which was accordingly added to the

income 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 Income

Tax (Appeals)-5, Hyderabad (briefly referred to hereinafter as

'CIT(A)'). By the appellate order dated 13.07.2020, the addition of

Rs.6,54,86,580.00 was deleted. According to CIT(A), respondent 3 HCJ & CVBRJ I.T.T.A.No.236 of 2022

had filed written submissions before the Assessing Officer

furnishing therewith identity of the purchasers, confirmation

letters and details of transactions. Assessing Officer had not

disputed the identity of the purchasers nor has disputed

genuineness of the transactions. The customers had the capacity

to invest but Assessing Officer had ignored the confirmation

letters, copies of Income Tax returns, Pan Numbers and bank

details of the purchasers. First appellate authority noted that

there had to be some cogent reasons and materials for the

Assessing Officer to reject the explanation and to make additions

under Section 68 of the Act. He could not have gone into the

realm of suspicion. Thereafter first appellate authority held as

follows:

"It is noticed that the Assessing Officer has neither doubted their identity, genuineness nor any adverse comments in respect of the confirmations so obtained by issuing summons. If the Assessing Officer has to disregard the documents so obtained, he could have given a clear finding and taking the issue to the logical conclusion. Not only this it appears that the approach adopted by the officer would have due effect of taxing the same transaction twice as the Assessing Officer has accepted the turnover of the assessee. In the background of the aforesaid discussions, the Assessing Officer is not justified in making the addition in dispute. Accordingly the addition of Rs.6,54,86,580/- made by the Assessing 4 HCJ & CVBRJ I.T.T.A.No.236 of 2022

Officer is hereby deleted. Thus, the ground Nos.2 to 8 raised by the assessee on this issue are allowed."

7. Aggrieved by the aforesaid order of the CIT(A), Revenue

preferred appeal before the Tribunal being ITA.No.507/Hyd/2020.

Tribunal did not find any substance in the challenge made by the

Revenue and noted that first appellate authority had gone by the

Assessing Officer's own remand report dated 14.06.2019 verifying

the entire advances. Tribunal thereafter held that respondent had

filed a detailed compilation before the Assessing Officer furnishing

all relevant details. In the backdrop of the above factual position,

Tribunal vide the order dated 15.11.2021 dismissed the appeal of

the Revenue.

8. On thorough consideration of all aspects of the matter,

we are of the view that the proposed substantial question of law as

framed do not arise from the order passed in appeal by the

Tribunal. Not to speak of any substantial question of law, no

question of law can be said to have arisen out of the order dated

15.11.2021 passed by the Tribunal.

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                                                   I.T.T.A.No.236 of 2022

9. Consequently, the appeal filed by the Revenue is

dismissed. However, there shall be no order as to costs.

10. As a sequel, miscellaneous applications pending, if

any, in this Appeal, shall stand closed.

__________________________ UJJAL BHUYAN, CJ

___________________________ C.V.BHASKAR REDDY, J

Date: 10.08.2022 KL