Criteria to be exigible to Section 115JB of the Income Tax Act

This Income Tax Appellate Tribunal order addresses appeals by the Revenue concerning disallowances and unexplained credits related to the Dummugudem Project. The Revenue challenged the CIT(A)'s decision to restrict disallowances and delete certain additions, arguing the assessee failed to prove cash expenditure and explain the source of funds. The Tribunal's decision partially allowed the Revenue's appeals.

IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCHES “A” : HYDERABAD
(THROUGH VIDEO CONFERENCE)
BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER
AND
SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER

Deputy Commissioner
of Income Tax,
Central Circle-2(4),
Hyderabad

Asst. Commissioner of
Income Tax,
Central Circle-2(4),
Hyderabad

Deputy Commissioner
of Income Tax,
Central Circle-2(4),
Hyderabad

Appellant

vs

M/s.Gayatri Projects
Limited,
Hyderabad
[PAN: AAACG8040K]

Respondent

For Revenue : Smt. S.Praveena, DR
For Assessee : Shri Mohan Kumar &
Shri B.Shanti Kumar, ARs
Date of Hearing : 16-08-2021
Date of Pronouncement : 24-08-2021
O R D E R

It transpires at the outset that the Revenue has raised its identical twin substantive grounds seeking to challenge correctness of the CIT(A)’s action inter alia restricting disallowance of assessee’s certain identical expenditure claim pertaining to Dummugudem Project to the tune of Rs.15.82 crores (in lead case ITA No.943/Hyd/2016) to the extent of 12.5% and in deleting un-explained credits addition of Rs.20,50,99,560/- (involving varying sum in all these six assessment years); respectively.

2. Learned CIT-DR vehemently contended during the course of hearing that the CIT(A) has erred in law and on facts in deleting the impugned cash expenditure additions. Her case is that the assessee had failed to prove its cash expenditure regarding Dummugudem Project during the course of assessment. She fails to dispute that the Assessing Officer’s assessment order dt.31-03-2013 had already disallowed the assessee’s entire expenditure pertaining to the very project to the tune of Rs.32,18,13,943/- as bogus under a separate head.

3. Learned CIT-DRs vehement contention before us is that the Assessing Officer had rightly made the impugned addition on account of assessee’s failure to explain identity, genuineness and creditworthiness of the corresponding creditor parties which could sufficiently throw light on source of the sum in issue. She further invited our attention to the assessee’s Managing Director, Shri T.V.Sandeep Reddy survey statement.

4. These Revenue’s appeals are partly allowed in above terms. A copy of this common order be placed in the respective
case files.
5. Order pronounced in the open court on 24th August, 2021.

Please find attached the enclosed file for the full judgement.