Income Tax Appellate Tribunal - Hyderabad
Sonam Seed Technologies P. Ltd., ... vs Jcit, Karimnagar Range, Karimnagar, ... on 11 January, 2017
ITA No 351 of 2016 Sonam Seed Technologies P Ltd Karimnagar
IN THE INCOME TAX APPELLATE TRIBUNAL
Hyderabad ' B ' Bench, Hyderabad
Before Smt. P. Madhavi Devi, Judicial Member
AND
Shri B. Ramakotaiah, Accountant Member
ITA No.351/Hyd/2016
(Assessment Year: 2010-11)
M/s. Sonam Technologies Vs Jt. Commissioner of Income
Private Limited Tax, Karimnagar Range
Karimnagar Karimnagar
PAN: AAMCS 5542 E
For Assessee : Shri S. Rama Rao
For Revenue : Shri K.J. Rao, DR
Date of Hearing: 20.12.2016
Date of Pronouncement: 11.01.2017
ORDER
Per Smt. P. Madhavi Devi, J.M.
This is assessee's appeal for the A.Y 2010-11.
2. Brief facts of the case are that the assessee company, engaged in the business of manufacturing and trading of seeds, filed its return of income on 15.10.2013 for the A.Y 2010-11, admitting an income of Rs.35,02,100. There was a survey in the case of the assessee on 14.12.2009 during the course of which, the assessee had admitted an income of Rs.35.00 lakhs towards construction of factory and other disallowances. The assessee included the said sum in the return of income filed. Thus, the net profit admitted after reducing the survey disclosure, is Rs.2,100/- only. During the assessment proceedings u/s 143(3) of the Act, Page 1 of 5 ITA No 351 of 2016 Sonam Seed Technologies P Ltd Karimnagar the AO was of the opinion that the net profit of Rs.2,100/- is very meager in the assessee's line of business. Further, he also observed that the assessee has introduced cash of Rs.35.00 lakhs in the cash book through journal entry. AO observed that at the time of survey, as per the cash book, the cash available is Rs.97,045 only. Therefore, the AO asked the assessee to explain as to how the cash was introduced when there is no cash available in the cash book. The assessee explained that the sum of Rs.35.00 lakhs is offered towards construction and also discrepancies in the books of account by passing a journal entry. AO observed that the income offered at the time of survey cannot be brought into the books of account as cash in the form of "other sources" and hence treated the sum of Rs.35.00 lakhs as unexplained cash credit u/s 68 of the I.T. Act and brought it to tax in addition to the returned income. Aggrieved, the assessee preferred an appeal before the CIT (A) who confirmed the order of the AO and the assessee is in 2nd appeal before us.
3. The learned Counsel for the assessee submitted that the assessee had not been able to explain the sources of investment in the construction of a building and there were certain other discrepancies in his books of account, due to which, the assessee had admitted an additional income of Rs.35.00 lakhs and in accordance with the said admission, the assessee has filed the return of income offering the sum of Rs.35.00 lakhs as other income along with the business income of Rs.2,100/-. He submitted that both the AO as well as the CIT (A) have erroneously brought the same to tax again as unexplained cash credits and therefore, it amounts to a double addition.
Page 2 of 5ITA No 351 of 2016 Sonam Seed Technologies P Ltd Karimnagar
4. The learned DR, on the other hand, supported the orders of the authorities below.
5. Having regard to the rival contentions and the material on record, it is seen from the P&L a/c of the assessee for the relevant A.Y, that the other income offered by the assessee is Rs.35,05,040 and it forms part of schedule-19 and on perusal of schedule-19, we find that the farmers booking is Rs.5,040/- and other income is shown as Rs.35.00 lakhs. There is no bifurcation of the said amount of Rs.35.00 lakhs and as explained by the assessee it is the income offered during the course of survey. Merely because the assessee has shown it by way of journal entry, it does not become unexplained cash credit. It is settled principle that an item of income cannot be taxed twice. Thus, the additional income offered by the assessee during the course of survey and offered in the return of income, cannot be brought to tax on account of an entry in the books of the assessee. Therefore, we are inclined to allow the assessee's appeal.
6. In the result, assessee's appeal is allowed. Order pronounced in the Open Court on 11th January, 2017.
Sd/- Sd/-
(B.Ramakotaiah) (P. Madhavi Devi)
Accountant Member Judicial Member
Hyderabad, dated 11th January, 2017.
Vinodan/sps
Page 3 of 5
ITA No 351 of 2016 Sonam Seed Technologies P Ltd Karimnagar Copy to:
1 Shri S.Rama Rao, Advocate, Flat No.102, Shriya's Elegance, 3-6- 643, Street No.9, Himayatnagar, Hyderabad 500029 2 Jt. Commissioner of Income Tax, Karimnagar Range, Karimnagar 3 CIT (A)-9 Hyderabad 4 Pr. CIT - 2 Hyderabad 5 The DR, ITAT Hyderabad 6 Guard File By Order Page 4 of 5 ITA No 351 of 2016 Sonam Seed Technologies P Ltd Karimnagar Page 5 of 5