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TMI Blog2017 (12) TMI 1164X X X X Extracts X X X X X X X X Extracts X X X X ..... any other evidence to establish that there is a case for making the addition of interest income separately. Therefore, we are of the considered opinion the issue needs further verification to hold whether the interest is a separate source of receipt other than from the source of business or not. Therefore we set aside the order of the CIT(A) and remit the matter back to the file of the AO to examine the correctness of assessee’s claim that the interest forms part of business income or not and decide the issue afresh on merits. Assessee’s appeal on this ground is allowed for statistical purposes. - I.T.A. No. 333/VIZ/2017 - - - Dated:- 20-12-2017 - Shri V. Durga Rao, Judicial Member And Shri D. S. Sunder Singh, Accountant Member Appellant by : Shri M. S. R. Prasad, AR Respondent by : Shri M. N. Murthy Naik, DR ORDER Per D. S. Sunder Singh, Accountant Member 1. This appeal is filed by the assessee against the order of the Commissioner of Income-Tax (Appeals), Vijayawada vide ITA No.215/CIT(A)/VJA/2015-16 dated 31.01.2017 for the assessment year 2010-11. 2. The assessee filed total ten grounds of appeal along with the Appeal Memo in Form No.36. Since the gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 51/- representing interest received which is connected with contract works under taken by the assessee on which income is estimated. 3. Ground No.1 and 9 of the revised grounds of appeal are general in nature which does not require specific adjudication. 4. Ground No. 2 to 6 are related to the direction of the Commissioner of Income Tax(CIT) in order u/s 263 relating to the addition of ₹ 35,65,818/- representing the depreciation. In this case, original assessment was completed u/s 143(3) on total income of ₹ 64,11,951/- and subsequently, the CIT has taken up the case for revision u/s 263 and observed that the assessing officer(AO) has allowed the depreciation from the estimated income. The Ld.CIT was of the view that from the estimated income there is no scope for allowing the depreciation as per section 30 to 38 of I.T.Act. Therefore, the Ld.CIT has directed the AO to add the depreciation and redetermine the income. Pursuant to the orders of the Ld.CIT, the AO has passed the consequential order u/s 143(3) r.w.s.263 making the addition of ₹ 35,65,818/-. The assessee filed appeal before the CIT(A) and the Ld.CIT(A) declined to interfere with the order of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he CIT passed u/s 263. 7. We have heard both the parties and perused the material placed on record. In this case, the CIT has taken up the case for revision u/s 263 and given a specific direction to the AO to make addition of depreciation amounting to ₹ 35,65,818/-. For ready reference, we reproduce para No.6.2 of the order passed by CIT u/s 263. 6.2. The assessee's submissions are considered Business income, per se, IS the taxable income, which apparently is net of all related expenses and other eligible deductions Hence, once business Income is estimated, there is no scope for deductions from Sec 30 to 38 of the Act Based on the facts and circumstances of the case, the P.O has estimated the income at a specified percentage which ,.Was not agitated by the assessee at any stage during the assessment or later proceedings Hence, keeping In view the Intent of the judicial pronouncements made in the cases of M/s. Indwell Constructions Pvt. Ltd., MIS. KNR Constructions Ltd and the Ia er8ecrstons of the Mantle ITAT, Hyderabad in Sri P V Sitaramaswamy vs. Addl. CIT, Range-B, Hyderabad In ITA No 264/Hyd/2012 - ay 2008-09, dt. 09/01/2013, the AC should not have allowed dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the revision order u/s 263 are not relevant to the present appeal and accordingly dismissed. 8. The CIT u/s 263 has given a specific direction to make the addition of ₹ 35,65,818/- representing the depreciation. While passing the consequential order, the AO has made the addition of ₹ 35,65,818/- representing the depreciation and correctly followed the direction of CIT. The Ld.CIT(A) dismissed the appeal of the assessee stating that it is a specific remand. For ready reference, we reproduce para 5.1.2. of CIT(A). 5.1.2. As the direction of CIT u/s 263 of the Act is a specific direction. I do not find any reason to interfere with addition made by A.O. (in due compliance with that specific direction). Appellant should have sought necessary remedy from the appropriate authority viz ITAT. As CIT CIT(A) are parallel and equal authorities, appeal against the assessment completed as per the specific directions of CIT u/s 263 of the Act could not be decided by the CIT(A). If it is an open remand, in my view, first appellate authority can decide the issue on merits. But in appellant s case, it is a specific remand. This ground of appeal is dismissed. 8.1. As pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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