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Facts
The assessee appealed an order from the CIT(A) concerning the assessment year 2020-21. The appeal emanated from an order dated 27/01/2023. The assessee raised multiple grounds, including the incorrect framing of the order by the CIT(A) and the denial of credit for returned business income against an addition made by the AO.
Held
The Tribunal found that the grounds raised by the assessee were not effectively adjudicated by the CIT(A). Consequently, the matter was restored to the file of the CIT(A) for a fresh decision on the grounds raised.
Key Issues
Whether the CIT(A) properly adjudicated the grounds raised by the assessee, particularly regarding the denial of credit for returned business income against the AO's addition, and whether the CIT(A) order was justified and in accordance with the law.
Sections Cited
250, 143(3), 234A, 234B, 234C
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR
Before: SHRI V. DURGA RAO & SHRI K.M. ROY, ACCOUNTANT, MEMBER
Date of Hearing – 27/01/2025 Date of Order – 29/01/2025
O R D E R PER K.M. ROY, A.M.
The aforesaid appeal by the assessee is emanating from the impugned order dated 27/01/2023, passed by the learned Commissioner of Income Tax (Appeals)–3, Nagpur, [“learned CIT(A)”], for the assessment year 2020–21.
2. In its appeal, the assessee has raised following grounds:–
“1. That the order framed under sec 250 by the CIT(A) is unjustified and bad in law. 2. That the Hon'ble CIT(A) erred in not providing the credit of returned business income of Rs 14,05,792/- against the addition of Rs 14,85,000/-. 3. Any other ground shall be prayed at the time of hearing.”
2 Ajay Kumar Vishandas Kamnani (HUF) ITA no.59/Nag./2023
3. We find that the very same ground was raised before the learned CIT(A) as per the grounds per Form no.35, which are reproduced below:– “1. That the Order passed under sec 143(3) by the Ld. AO is unjustified and bad in law.
The addition made by AO at Rs.38,92,460/- as estimated profit on estimated turnover under the head business is unjustified, unwarranted and bad in law.
The Ld. AO erred in calculating the average daily production at 1,361 kgs.
4. That the Ld. AO erred in not appreciating the fact that the assesse unit abandoned its operation with effect from 31-12-2019.
The Ld. AO erred in not appreciating the fact that there is wastage of about 10% in the manufacturing of plastic pannies from polymers. The Ld. AO while addition estimated business income for the entire years Fought to have allowed a credit of the returned business income declared by the assesse.
The assesse denies liability to be assessed to interest u/s 234A, 234B and 234C of the income tax Act 1961. Without prejudice the interest levied u/s 234A, 234B and 234C is unjustified and unwarranted.
Any other ground shall be prayed at the time of hearing.
The learned CIT(A) directed vide Para–4 of the impugned order, which is reproduced below:–
“4. Discussion and decision:- As many as six grounds of appeal s has been raised by the appellants. Ground no. 1 is being general in nature requires no separate adjudication and is dismissed. Ground no. 2 to 6 relates to addition made by the AO at Rs. 38,92,460/- as estimated profit on estimated turnover. The AO is correct in arriving at turnover of Rs.4,86,55,750/- (1361kg X 325 days X Rs. 110 per kg.). this is on the basis of seized materials and their extrapolation. Considering the fact that the net profit offered by the appellant has been less than 4% over the previous assessment years. Further the per day kg production of Rs. 1361 and no. of days calculated also seems to be on the higher side as it is extrapolated data. Hence considering the above facts, I calculate the turnover of the appellant at Rs. 2,97,00,000/-(900kg X 300X 110 per kg). further 5% of NP is reasonable according to me. Considering the 3. Ajay Kumar Vishandas Kamnani (HUF) ITA no.59/Nag./2023 nature of trade and the past net profit percentage of the appellant and the fact that incriminating documents were seized from the residence of the appellant groups concerns. Hence I restrict the addition on the above issue to Rs.14,85,000.”
5. There is no effective adjudication on the above grounds. Accordingly, we deem it fit to restore the matter to the file of the learned CIT(A) to decide the matter afresh since he has failed to apply his mind on these grounds. The learned Authorised Representative for the assessee is directed to adjudicate the ground at our end. But since it is not a legal ground, we refrain from doing so. Thus, grounds raised by the assessee are allowed for statistical purposes.
In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 29/01/2025