2018 (5) TMI 709 - AT - Income Tax

Undisclosed sources u/s 68 - Held that - It is a serious lapse which requires investigation at the highest level, how the A.O. passed two orders one in favour of Revenue and another in favour of Assessee. It may also be noted that the Ld. CIT(A) simply followed his order for A.Y. 2005-2006 for the purpose of deleting the addition. Learned Counsel for the Assessee however, fairly stated that in A.Y. 2005-2006, the issue was of unexplained share application money, but, in assessment year under appeal, the issue is of unsecured loans. CIT(A) has co-terminus powers to that of the A.O. Therefore, it is his duty to verify the facts and then pass the order as per Law. The Ld. CIT(A) without giving any reasons for decision in the appellate order passed the order following his order for A.Y. 2005-2006 which may not be relevant to the matter in issue. Ld. CIT(A) have also not verified as to how two different orders have been passed by the A.O. on the same matter in issue showing different additions against the assessee. In this view of the matter, we are of the view that the matter in issue requires reconsideration at the level of the Ld. CIT(A). - Appeal of Revenue is allowed for statistical purposes.

Summary

Issues:
1. Deletion of addition of income from undisclosed sources under section 68 of the I.T. Act, 1961.
2. Deletion of addition of interest paid on TDS payable on unsecured loans.
3. Confusion regarding the addition made by the Assessing Officer and the subsequent deletion by the Ld. CIT(A).

Analysis:

Issue 1: Deletion of addition of income from undisclosed sources under section 68 of the I.T. Act, 1961.
The Ld. CIT(A) deleted the addition of ?1,61,04,949/- made by the Assessing Officer on account of income from undisclosed sources under section 68 of the I.T. Act, 1961. The Revenue challenged this deletion in the Departmental Appeal, arguing that the Ld. CIT(A) erred in law and on facts. The Ld. CIT(A) based his decision on the grounds that the reasons for the addition were the same as in a previous assessment year where the issue was decided in favor of the assessee. The Tribunal noted that the Ld. CIT(A) did not provide any other findings and that there was confusion regarding the addition amount as reflected in different assessment orders. The matter was remanded to the Ld. CIT(A) for reconsideration to verify the facts and provide a reasoned decision based on the evidence on record.

Issue 2: Deletion of addition of interest paid on TDS payable on unsecured loans.
The Ld. CIT(A) also deleted the addition of ?1,04,949/- made by the Assessing Officer on account of interest paid on TDS payable on unsecured loans. The Revenue challenged this deletion, claiming an error in law and facts. The Tribunal noted the confusion arising from contradictory assessment orders and remanded the matter to the Ld. CIT(A) to re-decide the appeal based on verified facts and evidence on record.

Issue 3: Confusion regarding the addition made by the Assessing Officer and subsequent deletion by the Ld. CIT(A).
There was a discrepancy in the addition made by the Assessing Officer in different assessment orders, leading to confusion and a lack of clarity in the proceedings. The Tribunal highlighted the need for the Ld. CIT(A) to thoroughly examine the facts, provide reasoned decisions, and investigate how contradictory orders were passed on the same issue. The matter was remanded to the Ld. CIT(A) for a fresh decision, emphasizing the importance of verifying facts and providing a well-reasoned order based on the evidence presented.

In conclusion, the Tribunal allowed the Revenue's appeal for statistical purposes, remanding the case to the Ld. CIT(A) for a reevaluation of the issues and a detailed examination of the facts and evidence to ensure a just and lawful decision.