2012 (9) TMI 690 - AT - Income Tax

Since the matters cannot be decided before order of Settlement Commission and issues or grounds taken in these appeals in hand can only be decided by the assessing officer in the light of the order of the Settlement Commission which is still awaited. Therefore, all these three appeals are disposed of and these are treated as allowed for statistical purposes.

Summary

Issues:
- Confirmation of additions on account of commission income, advance from Pittie Cement India Ltd., income disclosed in return, sundry creditors, difference in Gross Profits, disallowance of expenses, and shareholders fund.
- Challenge to the order of the CIT(A) on various grounds including factual disputes and pending Settlement Commission application.

Analysis:
1. The appeals were filed against the order of the ld. CIT(A) for AYs 1994-95, 1997-98, and 1998-99. The grounds in all three appeals were similar, focusing on various additions confirmed by the CIT(A) related to commission income, advances, sundry creditors, difference in Gross Profits, expenses, and shareholders fund. The ITAT decided to address these appeals collectively for convenience and proper adjudication.

2. The issues raised in the appeals included challenges to the CIT(A)'s decisions on specific additions. For instance, in ITA No.2049/D/2010, challenges were made regarding the addition of commission income and an advance from Pittie Cement India Ltd. Similarly, in ITA No.2050/D/2010, challenges were raised on commission income, disclosed income, and sundry creditors. In ITA No. 5436/D/2011, various errors were highlighted, including the treatment of the appellant company as only on papers, ignoring settlement petitions, and confirming additions based on incomparable business data.

3. The AR argued that certain grounds raised by the appellant in AY 1998-99 could not be adjudicated until the Settlement Commission's decision, as an application before the Commission was pending. Referring to a previous judgment, the ITAT emphasized the importance of awaiting the Settlement Commission's final order before making decisions on the disputed issues.

4. The ITAT considered judgments from previous cases involving Settlement Commission applications and directed that the issues raised in the appeals could only be resolved by the Assessing Officer after the Settlement Commission's decision. The ITAT set aside the CIT(A)'s orders and instructed the appellant to provide a copy of the Settlement Commission's final order to support their claims for allowances and deductions.

5. Ultimately, the ITAT disposed of all three appeals by setting aside the CIT(A)'s orders and returning the issues to the Assessing Officer for further consideration in light of the Settlement Commission's pending decision. The appeals were treated as allowed for statistical purposes, emphasizing the need for the Settlement Commission's final order to determine the outcome of the disputed issues.

6. The judgment highlighted the procedural importance of awaiting the Settlement Commission's decision before resolving the issues raised in the appeals, emphasizing the need for proper documentation and compliance with the Settlement Commission's directives for a fair and accurate assessment of the disputed matters.