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TMI Blog2012 (9) TMI 713X X X X Extracts X X X X X X X X Extracts X X X X ..... d creditors – Assessee submit the confirmation with CIT(A) – CIT(A) set aside the order of AO for reconsideration – Held that:- CIT(A) has no power to set aside the assessment for reconsideration. But the fact remains is that the assessee has filed the confirmation letters from the creditors which needs to be considered by the AO in accordance with law. Issue remand back to file of AO. - IT(SS)A No. 111/Coch/2005 IT(SS)A No.139/Coch/2005 - - - Dated:- 22-6-2012 - Shri N.R.S. Ganesan And Shri B.R. Baskaran JJ. Assessee by : Shri C.R. Harish Respondent by : S.R. Senapati O R D E R Per N.R.S. Ganesan (JM) Both the appeals of the assessee and the revenue are directed against the very same order of the Commissioner of Income-tax(A)-I, Kochi dated 21-03-2005 and pertains to block period 01-04-1996 to 28-08-2002. Since both the appeals arise out of the very same order of the Commissioner of Income-tax(A), we heard them together and dispose of the same by this common order. IT(SS)A. 111/Coch/2005 Assessee s Appeal 2. The first ground in assessee s appeal is with regard to investment in sandal wood business to the extent of Rs.39,71,500. The department ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found in the seized material to the extent of Rs.10 lakhs as on 05-05-2002 and Rs.15,000 as on 23-06-2002 relating to the firm, M/s South India Perfumers. According to the ld.DR, the assessee is a partner in South India Perfumers. This credit, according to the ld.representative, relates to sandal wood business of the assessee. The ld.DR further submitted that a further entry was found in the seized document in respect of financial transaction with M.R. Industries to the extent of Rs.24 lakhs and Rs.49,32,511. In respect of credit found to the extent of R.10 lakhs and Rs.15,000 the assessee admitted that this is the business transaction and he will pay the tax after due verification. As regards the reference of Rs.49,32,511 the assessee stated that it relates to M.R. Industries. Referring to the amount of Rs. 24 lakhs the ld.DR submitted that the assessee stated before the revenue authorities that he can give explanation only after examination of the paper. Therefore, it is obvious that the assessee has not come out with true facts regarding the sandal wood business. Therefore, the assessing officer has made the addition. 6. We have considered the rival submissions on either s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f income for the assessment year 2001-02 to 2003-04. According to the ld.representative, the assessee owns 10.94 acres of agricultural land consisting of 8 acres of rubber plantation and in the remaining land about 3 acres are cultivated with coconut, aracanut, plantain and miscellaneous crops. The assessee claimed Rs.4,06,255 as agricultural income on the basis of the Rubber Board specification. The assessing officer, however, found that the Rubber Board specification shows the possible yield per acre from the rubber estate provided the trees are manured and maintained properly and that the maintenance of rubber trees would come approximately Rs.21,000 per acre. Considering all these facts, the assessing officer found that there was a difference of Rs.8,24,706 which was assessed as undisclosed income for the block period. However, on appeal by the assessee, the Commissioner of Income-tax(A) found that the agricultural income disclosed by the assessee for the period 01-04-2001 to 31-03-2002 is reasonable. The Commissioner of Income-tax(A) further held that the agricultural income shown to the extent of Rs.3,20,000 was to be assessed as income from other sources and reduced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ultural income over and above what was disclosed in the regular course. Since the assessee himself returned this income, the Commissioner of Income-tax(A) sustained the addition as Income from other sources . Therefore, we do not find any infirmity in the order of the lower authority. Accordingly the same is confirmed. Revenue s appeal ITSS 139/Coch/2005 12. Now the next ground of appeal in the revenue s appeal is with regard to the addition of Rs.58,24,931 towards the investment in shares of M.A Motors. According to the ld.DR, the actual investment of the assessee in M.A Motors as per the seized material is Rs.78,23,054. However, the assessee has shown the investment only to the extent of Rs.19,98,123 in the books of account. Therefore, the balance of Rs.58,24,931 was assessed as income from undisclosed sources for the block period. However, the Commissioner of Income-tax(A) deleted the addition on the ground that the seized material is an estimate of expenditure for the forthcoming period. Therefore, the estimated figure is only for planning purpose and hence, there cannot be any addition. According to the ld.representative, the seized document clearly indicate the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rders of the lower authorities are set aide and the issue relating to investment in the capital of M.A Motors is remitted back to the file of the assessing officer for reconsideration in the light of the material found during the course of search operation. 15. The next ground of appeal in the revenue s appeal is with regard to NRI loan to the extent of Rs.5,97,574. The ld.DR submitted that in the cash flow statement, the assessee has shown the loan of Rs.5,97,574 from three parties. The Commissioner of Income-tax(A) directed the assessing officer to verify the confirmation letter filed by the assessee. According to the ld.DR, the direction of the Commissioner of Income-tax(A) to verify the confirmation letter tantamount to setting aside the assessment order for reconsideration. The ld.DR submitted that the Commissioner of Income-tax(A) has no power to set aside the assessment for reconsideration. Therefore, the order of Commissioner of Income-tax(A) is not justified. 16. We have heard the ld.representatives for the revenue and the assessee. No doubt, the Commissioner of Income-tax(A) has no power to set aside the assessment for reconsideration. But the fact remains is that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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