DCIT CIR 6(3)(2), MUMBAI vs. KAPADIA ASSOCIATES P.LTD, MUMBAI

The above titled appeal by the Revenue and the cross objection by the assessee have been preferred against the order dated 07.10.2015 of the Commissioner of Income Tax (Appeals)

The short facts of the case are as under: The assessee is engaged in the business of architect and designing. On perusal of reconciliation of 26AS the Assessing Officer (hereinafter referred to as the AO) found that there was an unaccounted and undisclosed income of Rs.1,50,000/- received from Savvy Siddhi Reality & Infrastructure LLP which is in pattern of 26AS and which is in disagreement with the assessee’s books of account.

Matter carried to the Ld. CIT(A) and the Ld. CIT(A) has partly allowed the appeal of the assessee by observing as under: “It is seen that the income of Rs.1,50,000/- has been offered for income by the appellant in the next assessment year after due reconciliation of 26AS statement. Thus, the A.O. is directed to verify the same from the assessment record of 2013- 14 and then allow it. Ground of Appeal no. 4 is partly allowed.”

Second issue is that during the course of assessment proceedings assessee was asked to reconcile the AIR information in respect of mutual fund investment. The assessee was unable to explain the investment. Therefore, the AO made the addition. The matter carried to the Ld. CIT(A) and the Ld. CIT(A) has allowed by observing as under: “It is seen that the entire reconciliation of the Mutual Funds investment along with the source thereof as per the AIR information has been submitted by the appellant before the A.O. during the course of assessment. However, it is seen that the A.O. has made the addition of Rs. 80,00,000/- without verifying the difference between the AIR information along with the appellant's books of account. The A.O. is 3 CO No.215/M/2016 M/s. Kapadia Associates Pvt. Ltd. directed to carry out necessary verification and then allow the same, if it is to be allowed. Therefore, Ground of Appeal no. 5 is partly allowed.”

During the course of hearing, we find that the Ld. D.R. has objected to the direction given by the Ld. CIT(A) on the ground that Ld. CIT(A) has no power to give direction. Therefore, department has filed the appeal.

We find that Ld. CIT(A) has no power to set aside the issue but Tribunal has all the powers. Therefore, we direct accordingly.

In the result, the appeal of the Revenue is partly allowed and the cross objection of the assessee is dismissed.