ASSISTANT COMMISSIONER OF INCOME TAX vs. SHRI BAJRANG ALLOYS LTD

JUDGMENT (Passedon 13/12/2012) Per Abhay Manohar Sapre, J:- si r , (1) This is an appeal filed by the Assistant Comrnissioner of Incoine Tax (Revenue) under Section 260A of the Income Tax Act, 1961 (for short called "The Act") against the order dated 29/02/2008 passed by the Income Tax Appellate Tribunal Bilaspur Bench, Bilaspur (for short called "The Tribunal") in I.T.A. No. 144/NAG./2007 for Assessment Year 2005-2006. (2) By impugned order, fhe Tribunal allowed the assessee's appeal in part in so far as the issue involved in this appeal is concerned and hence the assessee is in appeal against that part of the order of Tribunal which decided the issue in their appeal against the assessee. (3) So the question which arises for consideration in this appeal is whether Tribunal was justified in allowing the assessee's appeal inso far as it relates to the issue involved in this appeal. (4) This appeal was admitted for final hearing on followin; substantial question of law:-

<r-^ s '»- "Whether on the facts and in the circuinstances of the case, the Inconie Tax Appellate Tribunal was justified fai law in setting aside the finding of Assessing Officer, which was subsequently afflrmed by the CIT (Appeals) whereby books of account of the assessee was rejected on the ground of detection of shortage of cash amount, excess of raw material and shortage of finished goods?" (5) The issue relates to addition of Rs.39,95,865/- which was added in the total income of the assessee. It arises out of assessment year 2005-2006. (6) It was a case of raid and survey made under Sections 132 and 133-A of the Act by the income tax slethues. It was conducted in the business/office premises ofthe assessee who at the relevant time was engaged in the business of structural rolling mill. The amount was added in their total income. The addition was upheld by the Corumissioner of Appeals by dismissing assessee's appeal. The assessee then carried the cnatter further in appeal before the Tribunal. By impugned order, the Tribunal set aside the findings of the assessin^ authority and that of the Coinmissioner of Appeals and deleted the addition made by the assessing authority. It is this issue which is now raised by the revenue in this appeal contending interalia that there was no case made out for such deletion and that Tribunal should have upheld the addition made by the assessing authority. (7) Having heard the learned counsel for the parties and on perusal of the record of the case, we have forined an opinion to remand the case to the Tribunal for deciding the appeal filed by the assessee out of which this appeal arises afresh on merits in the light of our observations. (8) The need to remand the case for deciding the appeal afresh on merits to the Tribunal has arisen for more than one reason. First: the arguments which are now being raised by the respondent (assessee) to support the impugned order

.d^¥aite&, '•<» '• >B»a5"». ft ''^^^^. ^ ^ . ^.^ ^ ^@^@3 -"s before this Court were not raised before the Tribunal. Second: the Tribunal also did not examine the issue arising in appeal keeping in view the law laid down on such legal points and proceeded to decide the appeal on the facts on which the Assessing Officer and Commissioner of Appeals had decided. That apart, the Tribunal though reversed the finding in favour of assessee but did not say a word as to why the finding which was recorded by the Assessing Officer and Comn-iissioner of Appeal in revenue's favour were bad. (9) In a case of reversal of the finding, the Tribunal had to first deal with the finding recorded by the Commissioner of Appeals as to why such finding was bad. The Tribunal being last Court on facts, it was necessaiy for the Tribunal to have taken note of these well settled rule of procedure while recording the finding before proceeding to reverse the findings of two lower authorities. It was not done and hence we consider it proper to remand the matter instead of undertaking the task of recording the finding for the first time on the issues urged in appeal. (10) In our considered opinion, the Tribunal should have decided the issue relating to addition of Rs. 39,95,865/- keeping in view the provisions of Section 132 and in particular Section 132 (4) and the law laid down by the Supreme Court in a case reported in [2006] 287 ITR 209 (SC) (P.R.Metrani v. Cominissioner of Incoine Tax, Bangalore) and other case law in holding the field on the subject. (11) As observed supra, since the Tribunal did not take note of law on the subject and nor examined the issue in that light and hence a case for remand is called for to the Tribunal. (12) We therefore do not consider it necessary at this stage to record any finding on the merits of the controversy raised in this appeal by both the parties and leave for the Tribunal to decide in the light of our observations made supra. (13) In the light of foregoing discussion, the appeal succeeds and is allowed. The impugned order is set aside. The ^- ;^ "fc®^1 ^'Hs^^''^: !s'- ^ .::".?.;*'-^.';<'.^ ^l ? r -^^..^.y ^ ;^-~. ''"' . rf^' '&^'.jf\3r3^f' case is remanded to the Tribunal for deciding the appeal afresh on merits strictly in accordance with law. (14) No order as to costs. (Abhay Manohar SsLpre) JUDGE Su7- (G. MiAiajuddin) JUDGE Tiwari