What did the Tribunal hold?

The Tribunal noted that the Commissioner of Income Tax (Appeals) had failed to adjudicate Ground No. 2 in both assessment years. Therefore, the issue was remitted back to the CIT(A) for adjudication.

The assessee's appeals for AY 2009-10 and 2010-11 were decided by the ITAT, but a specific ground (Ground No. 2) regarding the calculation of unaccounted investment was not adjudicated. The assessee filed miscellaneous applications, and the ITAT recalled its earlier order to address this ground.

What were the issues?

Whether the CIT(A) failed to adjudicate the assessee's ground regarding the correct method of calculating unaccounted investment by deducting actual cost instead of WDV.

M/S. Rahemutalla Restaurant… vs ACIT | ITAT Pune 2018

Income Tax Appellate Tribunal, “B” BENCH, PUNE

Before: SHRI D. KARUNAKARA RAO, AM & SHRI VIKAS AWASTHY, JM

For Appellant: Shri Pramod Shingte

Heard together (2 matters)

ITA No.955/PUN/2013

ITA No.2177/PUN/2013

Read from the judgment's own cause title. This page is filed under one of them.

आदेश / ORDER

PER VIKAS AWASTHY, JM :

ITA No. 955/PUN/2013 by the assessee is directed against the order of Commissioner of Income Tax (Appeals), Kolhapur dated 22-03-2013 for the assessment year 2009-10 and ITA No. 2177/PUN/2013 by the assessee is directed against the order of Commissioner of Income Tax (Appeals) dated 21-11-2013 for the assessment year 2010-11.

Both the appeals were decided by the Tribunal vide common order dated 30-11-2016. However, ground No. 2 raised in both the appeals were somehow not dwelled upon. The assessee filed Miscellaneous Applications seeking rectification of the order dated 30-11-2016 for adjudicating ground No. 2 raised in appeals for assessment years 2009-10 and 2010-11, respectively. The Tribunal vide order dated 15-09-2017 in MA Nos. 46 & 49/PUN/2017 recalled the order of Tribunal dated 30-11-2016 for limited purpose of adjudicated ground No. 2 raised in the respective appeals by the assessee. Hence, in the present proceedings we would be dealing with only ground No. 2 raised in the appeals for assessment years 2009-10 and 2010-11.

The ground No.2 raised in the appeal by assessee for assessment year 2009-10 reads as under : “2.1 The learned CIT(A) failed to appreciate the fact that instead of WDV of the asset, actual cost of investment in building and furniture is required to be deducted from the cost of the said assets determined by the DVO for arriving at unaccounted investment in building and furniture.

3 ITA Nos.955 & 2177/PUN/2013, A.Ys. 2009-10 & 2010-11

2.2 The learned CIT(A) erred in not considering the aforesaid claim made by the assessee. 2.3 The learned CIT(A)/AO may be directed to consider the actual cost of the assets incurred by the assessee, while arriving at the figure of undisclosed investment in place of w.d.v. of such assets.”

The ground No. 2 raised in the appeal by assessee for assessment year 2010-11 reads as under : “2.1 The learned CIT(A) failed to appreciate the fact that instead of WDV of the asset, actual cost of investment in building and furniture is required to be deducted from the cost of the said assets determined by the DVO for arriving at unaccounted investment in building and furniture. 2.2 The learned CIT(A) erred in not considering the aforesaid claim made by the assessee. 2.3 The learned CIT(A)/AO may be directed to consider the actual cost of the assets incurred by the assessee, while arriving at the figure of undisclosed investment in place of WDV of such assets. 2.4 Considering the relief available to assessee as per ground No. 1.1 to 1.3 and 2.1 to 2.3 the addition on account of unexplained investment in building and interior decoration be restricted to Rs.9,13,599/-.”

A perusal of the above grounds show that the issue raised in both the assessment years in ground No. 2 is identical.

Shri Pramod Shingte appearing on behalf of the assessee submitted that the Commissioner of Income Tax (Appeals) has failed to take note of the fact that instead of Written Down Value (WDV) of the asset, actual cost of investment in building and furniture was required to be deducted from the cost of assets determined by DVO while determining unaccounted investment in building and furniture. The assessee had raised this objection before the Commissioner of Income Tax (Appeals). However, the

4 ITA Nos.955 & 2177/PUN/2013, A.Ys. 2009-10 & 2010-11

Commissioner of Income Tax (Appeals) failed to adjudicate this ground. The ld. AR referred to ground No. 2 raised in the grounds of appeal before the Commissioner of Income Tax (Appeals) in respect of both the assessment years under appeal. The ld. AR contended the issue needs to be restored to the file of Commissioner of Income Tax (Appeals) for adjudication of ground No. 2.

Dr. Vivek Aggarwal representing the Department fairly admitted that ground No. 2 raised in both the appeals by the assessee has not been adjudicated by the Commissioner of Income Tax (Appeals).

We have heard the submissions made by representatives of rival sides and have perused the impugned orders. The solitary issue before us in the present proceedings is ground No. 2 that has been reproduced here- in-above relating to determination of value of unaccounted investment. Both the sides are unanimous in stating that the First Appellate Authority has failed to consider the plea of assessee raised in ground No. 2 of the appeal. Without commenting on merits of the issue, we deem it appropriate to remit the issue contained in ground No. 2 of the appeal back to the file of Commissioner of Income Tax (Appeals) for adjudication. The Commissioner of Income Tax (Appeals) shall grant reasonable opportunity of hearing to the assessee before deciding the ground No. 2 raised in the appeal for assessment year 2009-10, as well as assessment year 2010-11. Accordingly, ground No. 2 raised by the assessee in both the appeals are allowed for statistical purpose.

5 ITA Nos.955 & 2177/PUN/2013, A.Ys. 2009-10 & 2010-11

In the result, both the appeals of the assessee are allowed for statistical purpose.

Order pronounced on Wednesday, the 03rd day of January, 2018.

Sd/- Sd/- (डी. करुणाकरा राव/D. Karunakara Rao) (ववकास अवस्थी / Vikas Awasthy) ऱेखा सदस्य / ACCOUNTANT MEMBER न्याययक सदस्य / JUDICIAL MEMBER ऩुणे / Pune; ददनाांक / Dated : 03rd January, 2018 RK आदेश की प्रयिलऱवऩ अग्रेवषि / Copy of the Order forwarded to : अऩीऱाथी / The Appellant. 1. प्रत्यथी / The Respondent. 2. आयकर आयुक्त (अऩीऱ) / The CIT(A), Kolhapur 3. आयकर आयुक्त / The CIT-I/II, Kolhapur/CIT (Central), Pune 4. ववभागीय प्रयतयनधध, आयकर अऩीऱीय अधधकरण, “बी” बेंच, 5. ऩुणे / DR, ITAT, “B” Bench, Pune. गाडड फ़ाइऱ / Guard File. 6. //सत्यावऩत प्रयत // True Copy// आदेशानुसार / BY ORDER,

यनजी सधचव / Private Secretary, आयकर अऩीऱीय अधधकरण, ऩुणे / ITAT, Pune

M/S. RAHEMUTALLA RESTAURANT,SANGLI vs. ASSISTANT COMMISSIONER OF INCOME-TAX,

What did the Tribunal hold?

What were the facts?

What were the issues?

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