2018 (1) TMI 1145 - AT - Income Tax

Tribunal remits Revenue's appeals, stresses proper reasoning

The Tribunal allowed the Revenue's appeals for statistical purposes and remitted all issues back to the Ld. CIT(A) for fresh decisions, emphasizing the ... Addition under the head business profit - CIT(A) deleted the addition - non speaking order by CIT-A - Held that:- CIT(A) has deleted the addition made by the AO under the head business profit; without appreciating the totality of facts discussed and also case laws mentioned in the assessment. It is also noted that Ld. CIT(A) also not discussed the merit of the case and not given any proper justification and reasoning for the deletion of the addition. It is further noted that Ld. CIT(A) also not discussed the Remand Report of the AO, which is contrary to law and itself establish that Ld. CIT(A) has passed the non-speaking and laconic order, which in opinion need to be remitted back to the file of the Ld. CIT(A) to decide the same denovo. See ACIT vs. M/s Shukla & Brothers [2010 (4) TMI 139 - SUPREME COURT OF INDIA] No infirmity in the arguments advanced on behalf of the Department, that no reasons have been recorded for rejecting the contentions raised, this legal infirmity has, in fact, prejudicially affected the case of the assessee before us. - Thus remit back the case to the file of the Ld. CIT(A) with the direction to hear the case de novo and pass appropriate and speaking order in accordance with law, after giving adequate opportunity of being heard. - Decided in favour of revenue for statistical purposes. Issues involved:- Appeal against impugned Orders of the Ld. CIT(A)-XXI, New Delhi for assessment years 2009-10 & 2010-11.- Deletion of additions made by the AO under business profit and loss under maintenance charges.- Disallowance of expenses shown towards projects.- Interest forgone by assessee on deposits advanced to its holding company.- Proper justification for rejecting books of accounts and estimating income.- Deletion of additions by Ld. CIT(A) without proper reasoning.- Remand of cases back to Ld. CIT(A) for fresh decision.Analysis:Issue 1: Deletion of additions under business profit and loss under maintenance charges- The Revenue appealed against the deletion of additions totaling &8377; 32,72,07,299 and &8377; 2,03,86,732 for assessment years 2009-10 and 2010-11, respectively. The Ld. CIT(A) deleted these additions without proper justification, leading to the Revenue's argument that the order lacked reasoning. The Revenue contended that the projects were completed, and the expenses were necessary, contrary to the CIT(A)'s findings. The Tribunal found the CIT(A)'s order lacking reasoning and remitted the cases back for a fresh decision.Issue 2: Disallowance of expenses towards projects- Another ground of appeal was the deletion of additions amounting to &8377; 11,82,84,871 for expenses shown towards a project. The Revenue argued that the project was completed in the earlier assessment year, which was supported by facts admitted by the assessee. However, the CIT(A) deleted this addition without appreciating the reasoning provided by the AO. The Tribunal found the CIT(A)'s order lacking proper justification and remitted the case back for a fresh decision.Issue 3: Interest forgone by assessee on deposits- The Revenue also challenged the deletion of an addition of &8377; 7,75,60,966 for interest forgone by the assessee on deposits advanced to its holding company. The CIT(A) deleted this addition without proper appreciation of the facts and reasoning mentioned in the assessment order. The Tribunal found the CIT(A)'s order lacking reasoning and remitted the case back for a fresh decision.Issue 4: Proper justification for rejecting books of accounts and estimating income- The Ld. CIT(A) had deleted additions made by the AO, stating that there was no proper justification for rejecting the books of accounts and estimating income at 15%. The Tribunal observed that the CIT(A) did not provide adequate reasoning for the deletions, leading to a lack of proper justification for the decisions. The cases were remitted back for a fresh decision.Issue 5: Deletion of additions without proper reasoning- The Tribunal found that the Ld. CIT(A) had deleted additions without appreciating the totality of facts, not providing proper justification for the deletions. The Tribunal cited a Supreme Court judgment emphasizing the need for reasoning in judicial orders. Due to the lack of reasoning in the CIT(A)'s orders, the cases were remitted back for fresh decisions.Issue 6: Remand of cases back to Ld. CIT(A) for fresh decision- Considering the lack of proper reasoning and justification in the CIT(A)'s orders, the Tribunal remitted all issues back to the Ld. CIT(A) for fresh decisions. The Tribunal emphasized the importance of providing adequate reasoning in judicial orders to assist in assessing the correctness of decisions.In conclusion, the Tribunal allowed the Revenue's appeals for statistical purposes and remitted all issues back to the Ld. CIT(A) for fresh decisions, emphasizing the need for proper reasoning and justification in the orders.