TMI Blog2016 (1) TMI 492X X X X Extracts X X X X X X X X Extracts X X X X ..... on and we are unable to see any perversity or any other valid reason to interfere with the same. Before we part with the discussion on this issue, it is relevant to mention that the Assessing Officer will also take into consideration the binding Circular no. 17/2015 dated 6.10.2015 of the CBDT (supra) while verifying the facts and while applying the law in pursuance to the order of the first appellate authority. Accordingly, we uphold the conclusion of the CIT(A) with the direction to the Assessing Officer, as set out above. - Decided against revenue. Rejection of book results u/s 145(3) - Held that:- CIT(A) reduced the addition without pointing out any mistake in the calculation of the Assessing Officer and without recording any findings regarding conclusion of the Assessing Officer which is an incorrect approach for a first appellate authority. We, therefore, are of the opinion that this issue requires afresh adjudication at the end of the CIT(A) and hence, we restore this ground to the file of the CIT(A) for re-adjudication on this sole issue. Needless to say that the CIT(A) shall provide due opportunity of hearing to the assessee and shall decide the issue without being prej ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Replying to the above, learned counsel of the assessee pointed out that the Assessing Officer made addition on wrong appreciation of facts and incorrect application of law which was corrected by the CIT(A) on cogent and justified reasoning and hence, the impugned order may be upheld on this issue. He has also drawn our attention towards CBDT Circular No. 17/2015 dated 6.10.2015 the amended prescribed distance to be measured aerially, applied prospectively in relation to assessment year 2014-15 and onwards. For the period prior to assessment year 2014-15, it was held that the distance between municipal limit and agriculture land is to be measured having regard to shortest road distance. Accepting the decision of Hon'ble Bombay High Court (Nagpur Bench) in I.T.A. No. 151/2013 in the case of Smt. Maltibai R. Kadu CBDT has issued said Circular on 6.10.2015 on this issue of distance measurement. 5. On careful consideration of above, we note that the CIT(A) granted relief to the assessee by observing as follows:- 4. I have carefully considered the facts of the case, remand report of the AO, submission f rejoinder of the appellant and perused the record. It is evident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entioned in para 4 above, for the purpose of capital gains, has to be taken from the boundary of Municipal Limit of Gunnor. The AO is therefore, directed to measure the shortest possible aerial distance of lands other than lands mentioned in para 4 above along with the appellant and in case it is in the area upto a distance of 2.00 Kilometers (Kms) from the Gunnor Municipal Limits, the AO's findings in this regard remain upheld other wise not. In these circumstances, this issue is set aside for limited purpose for verification by the AO to consider the issue in line with the above directions. 5. The next issue is in respect of working of business income. Before going into the merits of the additions made by the AO in this case, it would be worthwhile to examine the veracity of action of the AO to invoke section 145(3) of the Act. The decision of the AO to invoke section 145(3) of the Act is based on his observations that the appellant has suppressed his gross profit (GP) to avoid the tax incidence on surrendered income during the survey operations, as normally; there is no loss in the export business. The AO further observed that the appellant has failed to produce export ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the impugned order wherein it is held that the Assessing Officer was justified in invoking the provisions of section 145(3) of the Act in rejecting book results of the assessee and the assessee has accepted this conclusion of first appellate authority as he has not filed any cross appeal or cross objection against these observations and conclusion of the authorities below. 8. Learned Departmental Representative further pointed out that the Assessing Officer was correct in making calculation of profit from business wherein the Assessing Officer has taken GP rate of 2.90% of the turnover on the basis of earlier year G.P. rate at ₹ 7,70,486 being 2.90% of the turnover of ₹ 2,65,68,488 relevant to financial period 2006-07 relevant to assessment year 2007-08. Learned Departmental Representative has further drawn our attention to page 4 of the assessment order and submitted that the Assessing Officer further proceeded to make logical and correct calculation of profits from business when after calculating gross profit on the basis of earlier year results, he added the surrendered amount of 85,10,000 pertaining to cash in hand and excess stock and allowed deduction of dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 2,65,68,488) and he added surrendered amount of ₹ 85,10,310 to this estimated profit and also allowed deduction of ₹ 6,73,538 on account of interest claimed and ₹ 6,24,638 on account of depreciation and calculated the net business profit at ₹ 79,82,630. Furthermore, the Assessing Officer also adjusted the amount of profit and gains from business as declared by the assessee in his return and arrived at the figure of ₹ 41,90,024 which was added to the returned income of the assessee. 11. During first appellate proceedings, the assessee submitted written submissions, which have been reproduced by the CIT(A) in para 3 of the impugned order. On careful perusal of the same, we clearly observe that the assessee has mainly challenged the conclusion of the Assessing Officer wherein he rejected books of accounts of the assessee u/s 145(3) of the Act. At the cost of repetition, we may again point out that the CIT(A) has upheld rejection of books of accounts and since the assessee has not challenged this issue by way of either cross appeal or objection, then this issue attains finality. In the written submissions, the assessee has not pointed out any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e head business income. Thus, the addition of ₹ 31,90,024/-/under the head business income is hereby deleted. Accordingly, the appellant gets relief. 13. From the above, it is apparent that the CIT(A) upheld the conclusion of the Assessing Officer in the adjudication part wherein he concluded that no documentary proof of expenses to substantiate the claim was produced before me to controvert findings of the Assessing Officer. We further observe that in the last two sentences, the CIT(A) reduced the addition to ₹ 10 lakh and granted relief of ₹ 31,90,024 to the assessee without pointing out any calculation mistake or any other allegation against the action of the Assessing Officer. Hence, we are inclined to hold that the CIT(A) granted relief to the assessee without recording any factual findings and thus we are unable to draw any conclusion about the correctness of impugned order. In this situation, we cannot expect the appellant/revenue to show and establish that the factual findings were incorrectly recorded by the first appellate authority. Hence, in our humble understanding, the benefit of ratio of the order of Hon'ble High Court of Delhi in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
