Revenue's Appeals Dismissed for Non-Compliance with Circular

The Tribunal dismissed the Revenue's appeals due to non-compliance with the CBDT Circular No. 21/2015. The assessee's appeals for Assessment Years 2008-09 and 2009-10 were partly allowed for statistical purposes, with matters remitted to the CIT(A) for fresh adjudication. The CIT(A) was directed to verify tax payments and decide on the grounds raised by the assessee, providing a reasonable opportunity for the assessee to be heard.

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Issues Involved:
1. Justification of considering Rs. 11,34,710 as explained by the assessee.
2. Deletion of addition on account of deemed rent from Janjira Bungalow and flat in White Tower.
3. Restriction of addition on account of unexplained investment in Janjira Bungalow.
4. Deletion of addition on account of unexplained investment in flat no. 202 Shabnam Apartment.
5. Compliance with CBDT Circular No. 21/2015 regarding monetary limits for filing appeals.
6. Dismissal of appeal due to non-payment of tax as per income returned.
7. Classification of rent on hire of Madh bungalow.
8. Addition on account of low withdrawals.
9. Addition on account of unsecured loan.
10. Addition on account of deemed rent of residential flats.

Detailed Analysis:

1. Justification of considering Rs. 11,34,710 as explained by the assessee:
The Revenue questioned whether the CIT(A) was justified in directing the AO to consider Rs. 11,34,710 as explained by the assessee's disclosure when this amount was not reflected in the assessee's books against the Bunch Berry flat and was not explained in the capital account and balance sheet filed along with the return of income for the year.

2. Deletion of addition on account of deemed rent from Janjira Bungalow and flat in White Tower:
The Revenue contended that the CIT(A) erred in deleting the addition made on account of deemed rent from Janjira Bungalow and flat in White Tower without appreciating that section 23(2)(b) would not be applicable as the assessee owns more than one house property.

3. Restriction of addition on account of unexplained investment in Janjira Bungalow:
The CIT(A) restricted the addition made on account of unexplained investment in Janjira Bungalow from Rs. 20 lacs to Rs. 17 lacs, ignoring the statement made by the assessee during the search. The Revenue argued that the CIT(A) should have remanded the matter to the AO for getting the investment valued by a Government valuer.

4. Deletion of addition on account of unexplained investment in flat no. 202 Shabnam Apartment:
The CIT(A) held that the investment in flat 202 Shabnam Apartment was made by the firm M/s Sarang Associates and not by the assessee, thus deleting the addition of Rs. 20,50,000. The Revenue contended that the investment was made in the name of the individual and not the firm.

5. Compliance with CBDT Circular No. 21/2015 regarding monetary limits for filing appeals:
The CBDT Circular No. 21/2015 revised the monetary limits for filing appeals by the Department before the Tribunal retrospectively. The tax effect in dispute in the three appeals was below the monetary limit of Rs. 10 lacs specified in the Circular. The Departmental Representative did not bring any material to suggest that the appeals were protected by any circumstances prescribed in Para-8 of the Circular.

6. Dismissal of appeal due to non-payment of tax as per income returned:
The CIT(A) dismissed the appeal as unadmitted by invoking the provisions of Sec. 249(4) of the Act because the assessee had not paid the tax on the income of Rs. 6,32,11,810 declared in the revised return filed on 12.11.2010. The assessee argued that the revised return was non-est in the eyes of law as it was not a valid return within the meaning of Sec. 139(5) of the Act. The Tribunal found justification in the assessee's plea and remitted the matter back to the CIT(A) to verify whether the entire admitted tax had been paid.

7. Classification of rent on hire of Madh bungalow:
The assessee argued that the CIT(A) erred in not considering the rent on hire of Madh bungalow of Rs. 800000 as 'Income from house property'. This issue was remitted back to the CIT(A) for fresh adjudication.

8. Addition on account of low withdrawals:
The CIT(A) confirmed an addition of Rs. 480000 on account of low withdrawals. This issue was also remitted back to the CIT(A) for fresh adjudication.

9. Addition on account of unsecured loan:
The CIT(A) confirmed an addition of Rs. 7993024 u/s 68 of the Income Tax Act on account of an unsecured loan. This issue was remitted back to the CIT(A) for fresh adjudication.

10. Addition on account of deemed rent of residential flats:
The CIT(A) confirmed an addition of Rs. 664000 as deemed rent of residential flats. This issue was remitted back to the CIT(A) for fresh adjudication.

Conclusion:
The Tribunal dismissed the three appeals filed by the Revenue as withdrawn/not pressed due to non-compliance with the CBDT Circular No. 21/2015. The appeals filed by the assessee for Assessment Years 2008-09 and 2009-10 were partly allowed for statistical purposes, with the matters remitted back to the CIT(A) for fresh adjudication on merits. The Tribunal emphasized that the CIT(A) should verify the payment of the entire admitted tax and proceed to decide the various grounds raised by the assessee on merits, allowing a reasonable opportunity of being heard.

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