2013 (11) TMI 1548 - AT - Income Tax

Addition on Working of capital gain and tax entire business income - CIT(A) directing AO to delete the working of capital gain and tax entire business income and not to treat any part there of as capital gain - invoking the provisions of section 153A - Held that - During the appellate proceedings before us, assessee filed three compilations. In reply to the query of the Bench, it was stated that all the documents filed in compilations were before AO as well as Ld. CIT(A). To verify the same, assessment records were called for and it was found that certain documents claimed to have been filed before AO were not part of the assessment record. Learned counsel of the assessee was fair enough to concede that the papers which are not part of assessment records may be treated as additional evidence before Ld. CIT(A) and therefore matter may be sent back to the file of Ld. CIT(A) for fresh adjudication after obtaining remand report from the AO on this additional evidence. Ld. DR did not object to this submission of the assessee s counsel. - Decided in favour of assessee for statistical purpose.

Summary

Issues Involved:
1. Appeal against the order of Ld. CIT(A) for assessment years 2006-07 & 2007-08.
2. Treatment of capital gain and business income.
3. Invocation of provisions of section 153A.
4. Adjudication on the value for section 45(2) of the I.T. Act.
5. Levy of interest u/s. 234A, 234B, and 234C of the I.T. Act.

Analysis:
1. The appeals by the revenue and Cross-Objections (COs) by the assessee were filed against the consolidated order of Ld. CIT(A)-I for assessment years 2006-07 & 2007-08. The revenue challenged the direction given by the CIT(A) regarding the treatment of capital gain and business income. The grounds of appeal raised by the revenue were identical in both the appeals.

2. The main contention in the appeals was the direction of the CIT(A) to delete the working of capital gain and tax the entire business income without treating any part as capital gain. This issue was a significant point of dispute between the parties, leading to the appeals before the tribunal.

3. The COs filed by the assessee raised several grounds, including the invocation of provisions of section 153A. The assessee contended that it was not a fit case for invoking section 153A for the years in question. The tribunal was tasked with evaluating the validity of this contention and determining whether the provisions of section 153A were correctly applied.

4. Another issue raised in the COs was the value to be adopted for the purpose of section 45(2) of the I.T. Act. The CIT(A) was criticized for not adjudicating upon the respondent's alternative plea regarding the value to be adopted. The tribunal had to assess the correctness of the CIT(A)'s decision and provide a resolution on this matter.

5. The final issue related to the levy of interest under sections 234A, 234B, and 234C of the I.T. Act. The assessee pleaded that it was not a fit case for the imposition of interest under these sections. The tribunal needed to determine whether the levy of interest was justified based on the facts and circumstances of the case.

6. During the appellate proceedings, it was discovered that certain documents claimed to have been filed before the Assessing Officer were not part of the assessment record. The tribunal decided to send the matter back to the file of the CIT(A) for fresh adjudication after obtaining a remand report from the AO on this additional evidence. Both the revenue's appeals and the COs filed by the assessee were allowed for statistical purposes, indicating that the matter required further examination and clarification.