TaxTMI 
TaxTMI 
2016 (7) TMI 730
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....ommissioner of Income-tax (Appeals) - II, New Delhi [hereinafter referred to as "the CIT(A)] v:de order 12th December, 2012 is void ab initio. That on the facts and circumstances of the case, the CIT(A) erred in holding that: a. The AO was right in exercising jurisdiction u/s 148 of the Act. b. The AO has not passed his order u/s 147 in violation of the settled law and pivotal facts that existed on the date of assessment order. 3. That on the facts and circumstances of the case, the CIT (A) grossly erred in holding that AO was correct in increasing the sales consideration of the Appellant to the tune of Rs. 49,56,108/- on account dump documents found at the premises on Sh. Pradeep Baranwal. 4. That on the facts and circumstances of the case the ld. CIT(A) grossly erred in exercising jurisdiction u/s 251 of the Act to enhance the income of the appellant by Rs. 4,18,472/- on account of dumb paper. 5. That on the facts and circumstances of the case the ld. CIT(A) grossly erred in upholding the addition to the tune of Rs. 2,87,028/- under the head ''other sources". 6. That on the facts and circumstances of the case the ld. ....
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....e order of the ld. CIT(A), Varanasi has been dismissed by the ITAT, Allahabad Bench vide order dated 13.12.2012 and there is no further appeal by the Revenue in this regard. Therefore, the addition on similar allegation may kindly be deleted. 6. The ld. DR supported the action of the AO and submitted that the AO rightly noted that there was a payment over and above DD payment amounting to Rs. 49,56,108/- which was not accounted by the assessee and the same was rightly taxed u/s 28 of the Act treating the amount as concealed income of the assessee. However, the ld. DR could not bring on record before us any other order of the higher authority to show that the order of the ld. CIT(A), Varanasi dated 21.6.2011, which has been upheld by the ITAT, Allahabad dated 12.12.2012 for A.Y 2008-09 similar addition in the hands of the payer/purchaser Shri Pradeep Kumar Baranwal, has been deleted. In the absence of any contrary order, we can safely presume that the addition on similar allegation in the hands of the purchaser payer has been deleted by the ld. CIT(A) and the order of the ld. CIT(A) has also been upheld by the ITAT, Allahabad and there is no further appeal by the Revenue. Therefo....
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....de in the hands of the present assessee as alleged recipient of over and above cash payment alleged by the AO and enhanced by the ld. CIT(A). We cannot ignore the fact that the order of the ld. CIT(A), Varanasi in the case of Shri Pradeep Kumar Baranwal has been upheld by the ITAT Allahabad Bench vide order dated 12.12.2012. Thus, in the absence of any other contrary order on this issue, we have no alternative but to follow the conclusion of the coordinate Bench of the ITAT Allahabad Bench in the case of the payee purchaser. Ground No. 4 of the Revenue is also allowed and the AO is directed to delete the enhanced amount made by the ld. CIT(A). Accordingly, Ground Nos. 3 and 4 are allowed. Ground Nos. 5 and 6 11. Apropos these grounds, the ld. AR contended that the ld. CIT(A) has erred in upholding the addition to the tune of Rs. 2,87,028/- under the head 'other sources'. The ld. AR also pointed out that the ld. CIT(A) erred in holding that there is no inextricable link between the FDs and the business of the assessee, therefore, the interest income earned from therefrom should be taxed under the head 'income from other sources'. 12. The ld. AR vehemently pointed out that i....
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....decline to accept allegation of the ld. CIT(A) that keeping some margin money for bank guarantee and having fixed deposits with the bank are two distinct and separate transactions. At the same time, we are satisfied that when the assessee chose to utilise its fixed deposits towards its obligation of keeping margin money towards it business obligation, then it has to be held that there is inextricable link between the fixed deposits and business obligation of keeping margin money. Hence the interest income has to be treated as business income and not income from other sources. Consequently, Ground Nos. 5 and 6 of the assessee for A.Y 2008-08 are allowed. Assessee's Appeal ITA No. 998/Del/2013 Revenue's Appeal ITA No. 558/Del/2013 A.Y 2009-10 14. These cross appeals have been filed against the order of the ld. CIT(A)-II, New Delhi 26.11.2012 passed in first appeal No. 165/2011-12 for A.Y 2009-10. Effective grounds raised by the assessee read as under: 1. That on the facts and circumstances of the case, the order dated 22nd December, 2011, as passed by the Assistant Commissioner of Income-tax, Central Circle - 21 [hereinafter referred to as "the A.O."] and as u....
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.... between the fixed deposits and business of the assessee to the entire tune of Rs. 3,04,939/-. But the ld. CIT(A) held that these are two distinct and separate transactions which are not factually correct. The ld. AR further pointed out that the facts and circumstances of the case of the A.Y 2008-09 are quite similar to the facts and circumstances of the A.Y under consideration i.e. 2009-10. 18. Replying to the above, the ld. DR strongly supported the action of the ld. CIT(A) as well as the first appellate order which upheld the addition. However the ld. DR did not object to this fact that the facts and circumstances of the case of A.Y 2008-09 are quite similar to the present A.Y 2009-10 as the AO made addition on the same allegations which was upheld by the ld. CIT(A) by observing similar findings. Since by the earlier part of the assessee for A.Y 2008-09 we have allowed the ground of the assessee pertaining to the treatment of interest income accrued to the assessee from the fixed deposits kept in the bank, therefore, in the similar set of facts and circumstances of the case, we are of the considered view that our conclusion for A.Y 2008-09 would apply mutatis mutandis to A.Y ....