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TMI Blog2011 (5) TMI 917X X X X Extracts X X X X X X X X Extracts X X X X ..... filed within the period of time. The assessee, therefore, prayed that nominal delay may be condoned in filing the Cross Objection of the assessee. The learned DR has no objection if the delay is condoned. Considering the explanation of the assessee and that there is a nominal delay in filing the Cross Objection on which also the learned DR has no objection if the delay is condoned. Accordingly, we condone the delay in filing the Cross Objection. 4. On ground No.1 of the appeal, the revenue challenged the deletion of addition of addition of ₹ 2,38,2992/- on account of folding charges. The assessee had claimed folding charges of ₹ 2,38,2992/- which is claimed to have been paid to M/s. Sajid Folding Works at ₹ 1,22,748/- and M/s. Avkar Folding Works at ₹ 1,15,544/-. The AO has made enquiries with regard to the payments and he did not allegedly find any evidence like bank documents in support of cheque payments made by the assessee. Therefore, the entire folding charges were disallowed. It was submitted before the learned CIT(A) that folding charges were paid to the persons who did folding works of cloth of dyeing , printing and processing. The assessee fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances, the AO has allowed the claim of the assessee in assessment year 1992- 93 in respect of the same parties, therefore, disallowance was deleted and the claim of the assessee has been allowed. 5. The learned DR relied upon the order of the AO. On the other hand, the learned Counsel for the assessee reiterated the submissions made before the authorities below and referred to the order of the Tribunal for assessment years 1993-94 and 1992-93 dated 6-1-2006 (PB - 158) in the case of the same assessee in which the Tribunal noted that the AO has allowed similar claim of the assessee in assessment year 1992-93 after due verification of facts. Copy of the order of the AO in set aside proceedings for assessment year 1992-93 is filed at page 44 of the paper book. 6. We have considered the rival submissions and the material available on record. The assessee claimed folding charges paid to M/s. Sajid Folding Works and M/s. Avkar Folding Works. Similar payments were made to these parties in assessment year 1992-93 also. The proceedings for assessment year 1992-93 were reopened while finalizing the assessment for assessment year 1993-94. It was claimed before the Tribunal that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d out the suppression of job work charges at ₹ 22,64,800/-. The assessee filed written submission before the learned CIT(A) which is reproduced in the appellate order in which it was briefly explained that the AO has failed to appreciate that entire cloth received by the assessee for the purpose of processing, the entire process would not be completed immediately or within the same financial year itself because in view of different stages of processing to be carried out, there is bound to be some cloth remaining under process or in the intermediate stage. During the course of the appellate proceedings of this year against the original assessment order, the assessee has furnished the figures of grey cloth received and process cloth delivered in the subsequent year which was admitted as evidence in view of no objection of the AO given on dated 17-1-1997. The learned CIT(A) gave his findings on 30-1-1997 that in the subsequent year cloth delivered is more than grey cloth received because grey cloth during the course of process in stock at the end of the year is delivered in the subsequent year. In the subsequent year delivery of the processed cloth is more by 2328569 meters. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... speaking order but the assessee has already made contention that as per decisions of the Hon ble Gujarat High Court in the case of President Industries and Gurbachan Singh Juneja (supra) the entire processing charges cannot be taxed as income, only the profit on the same may be taxed. He has, therefore, submitted that the assessee has already offered reasonable amount for the purpose of addition on which the learned CIT(A) has also restricted the addition and further submitted that since this is old matter, therefore, the matter may not be sent back to the learned CIT(A) for reconsideration. 11. We have heard the rival submissions and considered the material available on record and do not find any justification to restore the matter in issue again to the file of the learned CIT(A) for fresh adjudication. We find that earlier, the matter was considered by the Tribunal and was restored to the file of the AO for deciding the issue afresh vide order dated 6-1-2006. It is an old matter, therefore, it would be appropriate to decide the issue once for all on the basis of the material available on record instead of remanding the matter to the file of the learned CIT(A). It is not in di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f income is increased in the subsequent year, it would result back to the assessment year under appeal. Further, the assessee could not have earned the entire job charges without incurring any expenditure on the same. Therefore, profit rate could be applied for making the addition on this issue. The assessee has declared taxable income of ₹ 1,15,250/- in the return of income in respect of processing of cloth measured at about 14478551 meters. Therefore, for the shortage of 1887967 meters, the job charges could never be considered at ₹ 22,64,800/- as estimated by the AO outside the books of accounts. We find that the assessee had given the estimated figure of gross profit earned on the transaction in the matter as per the average processing charges, but the learned CIT(A) on proper appreciation of the fact has correctly estimated the lump sum addition in a sum of ₹ 3,50,000/-. Considering the totality of the facts and circumstances of the case in the light of the decisions of the Hon ble Gujarat High Court in the case of President Industries and Gurbachan Singh Juneja (supra), we do not find any justification to interfere with the order of the learned CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee. Copy of ledger account was filed. Under these circumstances, later on the assessee firm executed a leave and license agreement on 8-6-1992 with one M/s. Anurag Screen Printers whereby super structure along with water tank, electric motor, printing table, furniture and fittings etc. were given for use in consideration of services charges of ₹ 9,000/- per month. Another agreement was also executed by the co-owners of the land on the same date with the said party whereby land was given on license fees of ₹ 3,000/- per month. Accordingly, license fees towards the land were credited in the capital account of the partners in profit sharing ratio. During the original assessment proceedings the AO held that entire property being land and super structure with other assets was owned by the assessee firm and rent was assessable as property income in the hands of the assessee firm. On appeal, the learned CIT(A) allowed the claim of the assessee firm. On further appeal by the revenue, the issue was restored back to the AO mainly on the ground that material on record did not disclose as to how and in what category it was held by the assessee firm i.e. as investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee had let out portion of the factory and received rent of ₹ 90,000/-, therefore, the assessee is entitled for repairs etc. and balance may be taxed. The learned CIT(A) accepted the contention of the assessee and deduction of one fifth out of rental income was allowed and directed to add the balance amount of ₹ 72,000/-. 15. The learned DR relied upon the order of the AO and submitted that the assessee has not filed complete details before the AO and further when the property in question was let out on which one fifth deduction has been allowed as per section 24 of the IT Act on rental income, depreciation should not have been allowed in favour of the assessee. The learned DR submitted that findings of the learned CIT(A) are contrary to the provisions of law and the learned CIT(A) passed a non-speaking order, therefore, the matter may be restored to the file of the learned CIT(A) for reconsideration. 16. On the other hand, the learned Counsel for the assessee reiterated the submissions made before the authorities below and submitted that the land belonged to the partners and the super structure was constructed by the assessee and given on leave and license basis t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to be given whether it was rent received under the head income from house property or income from business . Since the assessee claimed partial rent of the property for temporary period, it can be considered as continuation of business activity, but the learned CIT(A) choose to ignore all the facts of the case and has not given any finding in accordance with law. Once deduction is allowed u/s 24 of the IT Act in favour of the assessee, there was no reason to grant depreciation to the assessee. Depreciation and deduction u/s 24 of the IT Act are all together different deductions provided under different heads as per the IT Act. The learned CIT(A) merely reproduced the written submission of the assessee and in few words accepted the claim of the assessee without giving reasons for decision. The order of the learned CIT(A) is thus contrary to the facts and material on record as well as contrary to his own findings on both the grounds of appeal. We accordingly, set aside the order of the learned CIT(A) on both the grounds No.3 and 4 and restore these issues to his file with direction to adjudicate both the grounds afresh. The learned CIT(A) shall give specific reasons for decision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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