Tribunal remands issues to CIT(A) for reconsideration, orders speaking order, grants parties sufficient opportunity. Appeal allowed. (A)

The Tribunal remanded all issues back to the CIT(A) for reconsideration, directing a speaking order and providing sufficient opportunity to both parties. The appeal was allowed for statistical purposes.

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Issues Involved:

1. Deletion of addition of Rs. 11,523/- on account of profit on sale of Rs. 2,30,460/- by applying a profit rate of 10%.
2. Deletion of addition of Rs. 4,25,075/- on account of commission from trading of shares.
3. Deletion of addition of Rs. 2,00,000/- and Rs. 5,06,170/- out of Rs. 58,55,500/- on account of cash deposits in the bank account.

Detailed Analysis:

Issue 1: Deletion of Addition on Account of Profit on Sale

The Assessing Officer (AO) completed the assessment under section 144 of the Income-tax Act due to the persistent non-compliance of the assessee. The AO added 10% of the amount of Rs. 2,30,460/- as profit on the sale of glass, resulting in an addition of Rs. 23,046/-. The CIT(A) reduced this addition by 50%, estimating the income on sale of glass at 5%, considering it was old stock. The Revenue contended that the CIT(A) was not justified in reducing the addition without giving an opportunity to the AO and without any evidence as to whom the stock was sold and what the margin was. The Tribunal found that the CIT(A) did not allow any opportunity to the AO before reducing the addition and did not ascertain the complete facts. Thus, the issue was remanded back to the CIT(A) for reconsideration.

Issue 2: Deletion of Addition on Account of Commission from Trading of Shares

The AO noticed that the assessee received an amount of Rs. 4,00,998/- from M/s Best Bull Stock (P) Ltd. on account of commission on trading in shares, and TDS of Rs. 24,077/- was deducted. Since the assessee claimed the TDS credit but did not declare the corresponding commission income, an addition of Rs. 4,25,075/- was made. The CIT(A) deleted this addition, stating that the commission income of Rs. 1,14,286/- was duly reflected after deducting expenses. The Revenue argued that the CIT(A) deleted the addition without examining the nature and genuineness of the expenses and without giving an opportunity to the AO. The Tribunal noted that the CIT(A) did not allow any opportunity to the AO and did not ascertain the complete facts, thus remanding the issue back to the CIT(A) for reconsideration.

Issue 3: Deletion of Addition on Account of Cash Deposits in Bank Account

The AO noticed cash deposits totaling Rs. 58,55,500/- in the assessee's bank accounts and added the amount as investment out of undisclosed sources since the assessee did not explain the source of these deposits. The CIT(A) concluded that Rs. 26,85,000/- out of the total deposits did not pertain to the year under consideration and allowed set off for Rs. 2,00,000/- from the sale of old stock of glass and Rs. 5,06,170/- from the income declared. The Revenue argued that the CIT(A) allowed the set off without any evidence of a nexus between the amounts and without giving an opportunity to the AO. The Tribunal found that the CIT(A) did not allow any opportunity to the AO and did not ascertain the complete facts. Hence, the issue was remanded back to the CIT(A) for reconsideration.

Conclusion:

The Tribunal set aside the order of the CIT(A) and remanded the issues back for reconsideration, directing the CIT(A) to pass a speaking order after allowing sufficient opportunity to both parties and keeping in mind the mandate of section 250(6) of the Income-tax Act. The appeal was allowed for statistical purposes.

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