TMI Blog2012 (7) TMI 214X X X X Extracts X X X X X X X X Extracts X X X X ..... t sale of old glass or returned income had any nexus with the cash deposited in the bank account ,especially when the assessee did not produce relevant books of account - order of the CIT(A) while disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision - decided in favour of revenue. - ITA No.4598/Del./2011 - - - Dated:- 22-6-2012 - SHRI G.C. GUPTA,VP AND SHRI A.N. PAHUJA, JJ. Revenue by Smt . Veena Joshi, . DR O R D E R A.N. PAHUJA :- This appeal filed on 17.10.2011 by the Revenue against an order dated 08.08.2011 of the CIT(A), Rohtak, raises the following grounds:- 1) On the facts and in the circumstances of the case, the ld. CIT(A) has erred in law and in facts in deleting the addition of Rs. 11,523/-, which was made by the AO u/s 144 of the I.T. Act on account of profit on sale of Rs. 2,30,460/- by applying rate of profit 10%. The learned CIT(A) has applied the rate of 5% which is not justified. 2) The ld. CIT(A) has erred in law and in facts in deleting the addition of Rs. 4,25,075/- which was made by the AO on account of commission of trading of shares as the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by 50% in the following terms:- 5. Regarding ground No.4 of appeal, the AR submitted that the business of trading in glass was discontinued and the whole stock was sold for lump sum amount of Rs. 2 lacs. Even if the Assessing Officer were to estimate the income, it should not be more than 5% as per the provisions of section 44AF of the Act. 5.1 I have considered the issue and conclude that the ends of justice would be met if the income on sale of glass is estimated at 5% considering that it was old stock and therefore the ground of appeal is partly allowed. 6.. Ground no.2 in the appeal relates to addition of Rs. 4,25,075/- on account of commission from trading in shares. The AO noticed during the course of assessment proceedings that the assessee received an amount of Rs. 4,00,998/- from M/s Best Bull Stock (P) Ltd., 6/79, WEA, Padam Singh, Karol Bagh, Delhi on account of commission on trading in shares; TDS of Rs. 24,077/- had also been deducted from the commission. Since the assessee has claimed credited of TDS in the return of income but no corresponding commission income had been declared, accordingly addition of Rs. 4,25,075/- was made to the income of the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal, the AR drawing attention to page 2 of the assessment order submitted that the deposits totaling Rs.51,39,500/- in a/c no.0612000004615 with HDFC Bank pertain to the period 3.7.2007 to 6.11.2008. The cash deposits during the year under consideration are only Rs. 24,54,500/- but the Assessing Officer has added the entire amount, even pertaining to the subsequent year. Therefore, addition of Rs. 26,85,000/- (51,39,500 24,54,500) in the year under consideration is erroneous. Further, the Assessing Officer has not given any set off for the sources of cash deposits from sale of old stock, current income, sale/acquisition of agriculture land and out of earlier withdrawals from bank. 7.1 I have carefully considered the issue and the submissions made by the AR. It is evident from the assessment order itself that cash deposits of Rs. 26,85,000/- do not pertain to the year under consideration and therefore addition to this extent is deleted. On the issue of giving credit for the withdrawals made earlier, current income etc., no case has been made out in this regard by the AR and further no details alongwith evidence have been furnished to entertain such claim. However, it would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... othing to suggest as to whether or not the AO was confronted this additional ground before its admission nor any report of the AO is referred to in the impugned order. The ld. CIT(A) while allowing set off of amount of Rs. 2 lacs on account of sale of old stock of glass and returned income of Rs. 5,06,170/- did not refer to any evidence that sale of old glass or returned income had any nexus with the cash deposited in the bank account ,especially when the assessee did not produce relevant books of account before the AO or the ld. CIT(A). It is well established that unless there was a connection between the unexplained investment by way of cash and sale of old glass or returned income , it would be difficult to accord set off of the two figures as held in the case of CIT v. Devi Prasad Viswanath Prasad [1969] 72 ITR 194(SC) and CIT Vs. Jhaverbhai Biharilal Co.160 ITR 634(Patna). As is apparent from the aforesaid facts narrated in the impugned order, the assessee did not appear before the AO nor produced the relevant books of accounts before the AO or even before the ld. CIT(A). Even before us none appeared on behalf of the assessee despite service of the not ice. There is nothing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is cryptic and grossly violative of one of the facets of the rules of natural justice, namely, that every judicial/quasi-judicial body/authority must pass reasoned order which should reflect application of mind by the concerned authority to the issues/points raised before it. The requirement of recording of reasons and communication thereof has been read as an integral part of the concept of fair procedure and safeguard to ensure observance of the rule of law. We may point out that a decision does not merely mean the conclusion . It embraces within its fold the reasons forming basis for the conclusion.[Mukhtiar Singh Vs. State of Punjab,(1995)1SCC 760(SC)]. In view of the foregoing, we consider it fair and appropriate to set aside the order of the ld. CIT(A) and restore the issues raised in ground nos.1 to 3 in the appeal to his file for deciding the matter afresh in accordance with law, after allowing sufficient opportunity to both the parties. Needless to say that while redeciding the appeal, the learned CIT(A) shall pass a speaking order, keeping in mind, inter alia, the mandate of provisions of sec. 250(6) of the Act. With these observations, ground nos. 1 to 3 are disposed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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