ITO.,Range-1, Hyderabad, Hyderabad V. G.P.Reddy, Hyderabad

CO 2/HYD/2015

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 2177 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 05-02-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 01-02-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 02-01-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M SITARAM
• Keywords: Unexplained cash credit; Unexplained investment; Unexplained expenditure; Opportunity of being heard; Principle of natural justice; Source of fund; Additional evidence
• Section: 69C; 143(3); 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 1629/HYD/2014 ASSESSMENT YEAR: 2005-06 THE INCOME TAX OFFICER, OSD RANGE - 1, HYDERABAD VS. G.P. REDDY, HYDERABAD PAN ACGPG 3702K (APPELLANT) (RESPONDENT) C.O. NO. 2/H/15 (IN ITA NO. 1629/HYD/2014 ASSESSMENT YEAR: 2005-06) G.P. REDDY, HYDERABAD PAN ACGPG 3702K VS. THE INCOME TAX OFFICER, OSD RANGE - 1, HYDERABAD (CROSS OBJECTOR) (RESPONDENT) REVENUE BY : SHRI M. SITARAM ASSESSEE BY : NONE DATE OF HEARING 01-02-2016 DATE OF PRONOUNCEMENT 05-02-2016 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A) - V, HYDERABAD, DATED 28/03/2014 FOR THE AY 2005-06. THE ASSESSEE ALSO FILED C.O., WHICH IS IN SUPPORT OF TH E ORDER OF CIT(A). 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN DELETING AN ADDITION OF RS.16,75,838/- MA DE U/S 69A OF THE INCOME TAX ACT WITHOUT APPRECIATING THE FA CT THAT THE ASSESSEE HAS NEVER SUBMITTED ANY DETAILS WITH REG ARD TO THE 2 ITA NO. 1629/HYD/2014 & C.O. NO. 2/H/15 G.P. REDDY SOURCE OF PURCHASE OF PROPERTY, NOR FILED ANY DOC UMENTARY EVIDENCE IN SUPPORT OF ASSESSES CLAIM. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN DELETING ESTIMATED HOUSEHOLD EXPENSES OF RS. 2,96,368/- IGNORING THE FACT THAT THE ASSESSEE HA S SHOWN A MEAGER HOUSEHOLD EXPENSES OF RS.3,630/- PER ANNUM. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN DELETING AN ADVANCE RECEIVED OF RS.22 LAK HS WITHOUT APPRECIATING THE FACT THAT THE ASSESSES HAS NOT DI SCHARGED THE BASIC PRINCIPLES OF IDENTITY, GENUINENESS AND CRED IT WORTHINESS OF THE LENDER. 4. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN DELETING RS. 30 LAKHS MADE U/S 68 OF THE INCOME TAX ACT WITHOUT APPRECIATING THE FACT THAT THE ASSESS ES HAS NOT DISCHARGED THE BASIC PRINCIPLES OF IDENTITY, GENU INENESS AND CREDIT WORTHINESS' OF THE LENDER. 5. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN ADMITTING THE ADDITIONAL EVIDENCE WHICH W AS NEVER SUBMITTED BEFORE THE AO AND THEREBY THE LEARNED CI T(A) VIOLATED RULE 46A OF THE INCOME TAX RULES. 3. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE, AN INDIVIDUAL, HAS FILED HIS RETURN OF INCOME IN RESPO NSE TO THE NOTICE U/S 148 OF THE ACT ON 21/06/2007 DECLARING INCOME OF RS . 4 LAKHS FOR THE AY 2005-06. THE ASSESSMENT WAS COMPLETED U/S 143(3) RWS 147 OF THE ACT DETERMINING THE TOTAL INCOME AT RS. 75,72,2 06 BY MAKING THE FOLLOWING ADDITIONS: I) UNEXPLAINED INVESTMENT U/S 69A RS. 16,75,838 II) UNEXPLAINED CASH CREDIT U/S 68 RS. 22,00,000 III) UNEXPLAINED INCOME U/S 68 RS. 30,00,000 IV) UNEXPLAINED EXPENDITURE U/S 69C RS. 2,96,363 4. AS REGARDS THE GROUND NO. 1 PERTAINING TO THE A DDITION OF RS. 16,75,838/- MADE BY THE AO U/S 69A TREATING IT AS U NEXPLAINED INVESTMENT, THE AO NOTICED THAT THE ASSESSEE HAD PU RCHASED A PROPERTY SITUATED AT ROAD NO. 2, BANJARA HILLS, HYD ERABAD FOR AN AMOUNT OF RS. 16,75,838/-. ON BEING ASKED BY THE AO TO FURNISH THE 3 ITA NO. 1629/HYD/2014 & C.O. NO. 2/H/15 G.P. REDDY DETAILS, THE ASSESSEE FAILED TO FURNISH A COPY OF T HE SALE DEED AND ALSO FAILED TO EXPLAIN THE SOURCES OF INCOME FOR TH E ABOVE INVESTMENT. THE AO OBSERVED THAT ONCE THE REGISTRATION IS OVER, IT IS THE DUTY OF AO TO SEEK THE SOURCES FOR THE CONCERNED INVESTMENT S AND SINCE NO DOCUMENTARY EVIDENCE IS FILED BY THE ASSESSEE TO SU PPORT HIS CLAIM, THE AO TREATED THE SAID AMOUNT OF RS. 16,75,838/- A S UNEXPLAINED INVESTMENT AND ADDED THE SAME TO INCOME OF THE ASSE SSEE U/S 69A OF THE ACT. 5. ON APPEAL, BEFORE THE CIT(A), THE ASSESSEE FILED A COPY OF THE COMPUTERIZED LEDGER AND CASH BOOK, WHICH THE AO HAD ADMITTED TO HAVE BEEN SUBMITTED BY THE ASSESSEE DURING THE ASSE SSMENT PROCEEDINGS. REFERRING TO THE NARRATION IN THE CASH BOOK, THE CIT(A) OBSERVED THAT THE AOS CLAIM THAT THIS INVESTMENT H AS NOT BEEN RECORDED IS NOT AS PER THE RECORDS SUBMITTED DURING THE HEARING. HE OBSERVED THAT IT IS APPARENT THAT THE AO HAS NOT VE RIFIED THE RECORDS AND SIMPLY INVOKED THE PROVISIONS OF SECTION 69A ON THE CONSTRUCTED BOOKS OF ACCOUNT AND SUBMITTED, THE ACTION OF THE A O IS ARBITRARY. HE, THEREFORE, DELETED THE ADDITION OF RS. 16,75,838. 6. AS REGARDS GROUND NO. 2 PERTAINING TO THE ADDITI ON OF RS. 2,96,368/- MADE BY THE AO ON ACCOUNT OF LOW HOUSEHO LD WITHDRAWALS, THE AO MADE A PROPOSAL TO ADOPT AN AMOUNT OF RS. 25 ,000 PER MONTH TOWARDS DOMESTIC EXPENDITURE FOR HIS FAMILY BY CONS IDERING THE FACTS OF THE ASSESSEES SOCIAL STATUS, SIZE OF THE FAMILY , LOCATION OF RESIDENCE, IN THE ABSENCE OF DETAILS OF PERSONAL DR AWINGS OF THE ASSESSEE AS PER THE RETURN OF INCOME EXCEPT A MENTI ON FOR A MERE AMOUNT OF RS. 3,632/-. IN RESPONSE TO THE ABOVE PRO POSAL, THE ASSESSEE STATED THAT SINCE IT IS A JOINT FAMILY, HI S DRAWINGS WHATSOEVER ARE TAKEN CARE OF FROM HIS HUF INCOME AN D WHENEVER HE WORKS IN THE COMPANY THE EXPENDITURE IS TAKEN CARE OF BY THE COMPANY, THEREFORE, THERE WAS NO EXPENSES TOWARDS D RAWINGS IN HIS PERSONAL STATUS. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE AO OBSERVED THAT AS PER THE FACTS AND CIRCUMSTA NCES AVAILABLE ON 4 ITA NO. 1629/HYD/2014 & C.O. NO. 2/H/15 G.P. REDDY RECORD, THE AMOUNT OF RS. 3,632/- IS NOT SUFFICIENT TO MEET HIS DOMESTIC EXPENSES PER ANNUM AND, THEREFORE, HE TRE ATED AN AMOUNT OF RS. 2,96,368/- TOWARDS UNEXPLAINED EXPENDITURE U /S 69C OF THE ACT AFTER REDUCING AN AMOUNT OF RS. 3,632/- REDUCED FRO M THE TOTAL AMOUNT OF RS. 3,00,000/-. 7. ON APPEAL, THE CIT(A) AFTER CONSIDERING THE SUBM ISSIONS OF THE ASSESSEE HELD THAT THE AO IS NOT JUSTIFIED IN MAKIN G ESTIMATE OF EXPENDITURE OF ASSESSEE WITHOUT TAKING INTO CONSIDE RATION SUCH AS DEPENDENTS, EARNING MEMBERS OF FAMILY, AGRICULTURAL PRODUCE DIRECTLY CONSUMED BY THE FAMILY MEMBERS ETC. AND THE AO ALSO DID NOT CONSIDER THE AGRICULTURAL INCOME OF RS. 1,09,000 DU LY DECLARED IN THE RETURN OF INCOME OF HUF, WHICH WAS DULY VERIFIED AN D FOUND TO BE CORRECT. HE, ACCORDINGLY, DELETED THE ADDITION MADE BY THE AO. 8. AS REGARDS THE 3 RD GROUND PERTAINING TO THE ADDITION OF RS. 22.00 LAKHS MADE BY THE AO TREATING IT AS UNEXPLAIN ED CASH CREDIT U/S 68, THE AO ASKED THE ASSESSEE TO FURNISH THE DETAIL S OF ADVANCES APPEARING IN THE TRIAL BALANCE TO THE TUNE OF RS. 2 2 LAKHS. IN REPLY, THE ASSESSEE STATED THAT THE ADVANCE RECEIVED RS. 22.00 LAKHS FROM ASLAM ASSOCIATES, BANGALORE BY MEANS OF CHEQUES TOW ARDS PROJECT ADVANCE. THE AO OBSERVED THAT WITHOUT FURNISHING T HE DOCUMENTARY EVIDENCES AND FULL POSTAL ADDRESSES OF THE CREDITOR M/S ASLAM, BANGALORE AND NO CONFIRMATION LETTER HAS BEEN FILED BY THE ASSESSEE IN THIS REGARD. IN THE ABSENCE OF CONFIRMATION LET TER AND THE INCOME TAX ASSESSMENT PARTICULARS OF M/S ASLAM ASSOCIATES, BANGALORE AND TO CROSS EXAMINE THE GENUINENESS OF THE TRANSACTION WITH THE PARTY, NO ADDRESS IS GIVEN BY THE ASSESSEE, THE AO TREATED THE SAID AMOUNT AS UNEXPLAINED CASH CREDIT AND ADDED THE SAME TO TH E INCOME OF ASSESSEE U/S 68 OF THE IT ACT. 9. BEFORE THE CIT(A), THE AR OF THE ASSESSEE SUBMIT TED THAT THE AO ERRED IN MAKING THE ADDITION OF RS. 22 LAKHS REC EIVED THROUGH BANK AS UNEXPLAINED INVESTMENT. HE SUBMITTED THAT I N ING VYSYA BANK OF THE ASSESSEE, THERE ARE DEPOSITS, WHICH ARE AS UNDER: 5 ITA NO. 1629/HYD/2014 & C.O. NO. 2/H/15 G.P. REDDY S.NO. DATE OF CREDIT AMOUNT CREDITED 1 22-09-2004 RS. 8,00,000 2 22-09-2004 9,00,000 3 29-09-2004 2,50,000 4 29-09-2004 2,50,000 TOTAL 22,00,000 9.1 THE LD. AR OF THE ASSESSEE SUBMITTED THAT THESE ARE THE AMOUNTS RECEIVED FROM ONE SRI M.KOMARAIAH AND HIS F AMILY, FOR THE PURPOSE OF ACQUIRING PROPERTY AT BANGALORE THROUGH M/S FLORENCE ESTATES & CONSTRUCTIONS LIMITED. THE CONFIRMATION L ETTER ALONG WITH PETITION FOR ADMISSION BEFORE HON'BLE CIT CLAIMED T O HAVE BEEN SUBMITTED IN EARLIER HEARING WAS FILED WITH A REQU EST TO CONSIDER THE SAME AND DELETE THE ADDITION. 9.2 THE ASSESSEE SUBMITTED A PETITION FOR ADMISSIO N OF ADDITIONAL EVIDENCE BEFORE THE CIT (APPEALS)-II, HYDERABAD, ST ATING AS UNDER: 'THE APPELLANT RECEIVED RS.22 LAKHS THROUGH BANKIN G CHANNELS (FOUR CHEQUES/DDS) FROM SRI M.KOMARAIAH AND OTHERS , 96, DHANALAKSHMI COLONY, MAHENDRA HILLS, SECUNDERABA. THEY WERE DEPOSITED N HIS BANK ACCOUNT. THE ACCOUNTANT, WITH MISTAKEN IMPRESSION, ENTERED THESE AMOUNTS AS HAVI NG BEEN RECEIVED FROM ASLAM ASSOCIATES (I.E. ASLAM AND OTH ERS) OF BANGALORE. DURING THE ASST. PROCEEDINGS, THE APPEL LANT COULD NOT PRODUCE CONFIRMATION LETTERS AND THE AO ADDED THIS AMOUNT AS UNEXPLAINED CREDIT U/S 68. IT IS SUBMITTED THAT THE ABOVE AMOUNTS WERE ADVANC ES TOWARDS PURCHASE OF PROPERTY AT BANGALORE. ALL THE AMOUNTS ARE THROUGH BANKING CHANNELS. SRI M. KOMARAIAH, IN HIS CONFIRM ATION LETTER FURNISHED THE DETAILS, INCLUDING THEIR PANS OF THE FOUR PERSONS, WHO GAVE THE AMOUNTS. THIS CONFIRMATION LETTER IS SUBMITTED IN THE PAPER BOOK AT PAGE.5. COPY IS ENCLOSED. IT IS PRAYED THAT THE CIT (A) BE PLEASED TO ADMIT THIS EVIDENCE IN T HE INTEREST OF JUSTICE. ' ALONG WITH THESE, THE APPELLANT HAS ALSO SUBMITTED ADDITIONAL EVIDENCE IN THE FORM OF BANK STATEMENT OF SRI T.RA MA SUBBA REDDY, BANK STATEMENT OF THE APPELLANT AND THE LED GER ACCOUNT OT- SHRI RAMASUBBA REDDY IN THE BOOKS OF THE APPEL LANT REFLECTING THE CREDIT AND DEBIT OF RS.30 LAKHS (CA NOPY DWELLINGS) PAID BY RAMA SUBBA REDDY FOR THE PURPOS E OF 6 ITA NO. 1629/HYD/2014 & C.O. NO. 2/H/15 G.P. REDDY INVESTMENT IN THE APPELLANT'S CONSTRUCTION COMPANY , M/S FLORENCE ESTATES & CONSTRUCTION LIMITED. 9.3 THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND ADMITTING THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE, HELD THAT THE ASSESSEE HAS SATISFACTORILY EXPLAINED THE SOURC E OF RS. 22 LAKHS RECEIVED AS ADVANCE FOR PURCHASE OF PROPERTY AT BAN GALORE THROUGH M/S FLORENCE ESTATES & CONSTRUCTIONS LTD., AND, HEN CE, DELETED THE ADDITION OF RS. 22 LAKHS. 10. AS REGARDS GROUND NO. 4 PERTAINING TO THE ADDIT ION OF RS. 30,00,000 LAKHS MADE BY THE AO AS UNEXPLAINED INCOM E U/S 68, THE AO ASKED THE ASSESSEE TO FURNISH THE CONFIRMATION L ETTER FOR RS. 30 LAKHS RECEIVED FROM RAMASUBBA REDDY ON 04/11/04 AND REPAYMENT OF THE SAME ON 05/11/04. IN REPLY, THE ASSESSEE STATED THAT MR. RAMA SUBBA REDDY HAS GIVEN A CHEQUE IN MY NAME BY MISTAK E INSTEAD OF GIVING IT IN THE NAME OF FLORENCE ESTATES & CONSTRU CTIONS LIMITED IN WHICH HE WAS INTEREST TO INVEST. BUT THE STAFF WIT HOUT KNOWING THIS FACT, HAD DEPOSITED THE CHEQUE IN HIS ACCOUNT. AFTE R NOTICING THIS MISTAKE, THE VERY NEXT DAY ISSUED A CHEQUE BACK T O HIM. THE SUBMISSION OF THE ASSESSEE WAS NOT FOUND FAVOUR WIT H AO AND HE OBSERVED THAT ASSESSEE HAS FAILED TO SUBSTANTIATE H IS CLAIM THAT AMOUNT WAS WRONGLY CREDITED IN HIS ACCOUNT INSTEAD OF GOING TO THE ACCOUNT OF M/S. FLORENCE ESTATES & CONSTRUCTIONS LT D. BECAUSE UNLESS THE CHEQUE WAS DRAWN IN THE NAME OF SHRI G.P . REDDY THE CHEQUE COULD BE HONOURED BY THE BANK PEOPLE. WHILE SCRUTINIZING THE COMPUTER COPY OF THE CASH BOOK AND LEDGER IT IS FOU ND THAT THE AMOUNT WAS RECEIVED BY SHRI G.P. REDDY AND CREDITED TO HIS ACCOUNT ON 04.11.2004. LATER ON THE SAME WAS TRANSFERRED TO M/ S. CANOPY DWELLINGS ON 05.11.2004. WHEREAS THE ASSESSEE HAS S TATED THAT SHRI RAMA SUBBA REDDY WITH A VIEW TO MAKE INVESTMENT IN THE CONCERN OF M/S. FLORENCE ESTATES & CONSTRUCTIONS LTD., HYDERAB AD BUT WRONGLY DRAWN CHEQUE AND ISSUED TO THE ASSESSEE. AS THERE I S NO CORRELATION BETWEEN THE FACTS AND CIRCUMSTANCES OF THE TRANSACT ION AND EXPLANATION OFFERED BY THE ASSESSEE, THE AO HELD TH AT THE ASSESSEE'S 7 ITA NO. 1629/HYD/2014 & C.O. NO. 2/H/15 G.P. REDDY PLEA CANNOT BE CONSIDERED FAVOURABLY AND THE SAME I S TREATED AS UNEXPLAINED CREDIT U/S.68 OF THE INCOME TAX ACT, 19 61 AND ADDED TO THE INCOME OF THE ASSESSEE. 11. BEFORE THE CIT(A), THE AR OF THE ASSESSEE STATE D THAT AN AMOUNT OF RS. 30 LAKHS RECEIVED THROUGH BANK FOR TH E PURPOSE OF INVESTMENT FROM RAM SUBBA REDDY CANOPY DWELLINGS LTD. HE CONTENDED THAT THE AO WAS NOT JUSTIFIED TO TAKE ADV ANTAGE OF THE OMISSION COMMITTED BY THE ACCOUNTANT FOR THE PURPOS E OF MAKING ADDITION AGAINST THE SPIRIT OF LAW. 12. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESS EE, THE CIT(A) OBSERVED THAT AS EVIDENT FROM THE BANK ACCOUNT EXTR ACT OF SHRI T. RAMA SUBBA REDDY, THERE WAS A TRANSFER OF RS. 30 LA KHS ON 04/11/04 IN FAVOUR OF THE ASSESSEE WHICH WAS CREDITED ON 04/ 11/04 AND SUBSEQUENTLY, THE AMOUNT OF RS. 30 LAKHS WAS TRANSF ERRED FROM THE ACCOUNT OF THE ASSESSEE TO CANOPY DWELLINGS (I.E. S HRI T. RAMA SUBBA REDDY) ON 05/11/04. HE FURTHER OBSERVED THAT THE ASSESSEE ALSO FURNISHED LEDGER EXTRACT IN ITS BOOKS OF ACCOU NT REFLECTING THE CREDIT OF RS. 30 LAKHS FROM SHRI T. RAMA SUBBA REDD Y AND SUBSEQUENT DEBIT OF THE SAME, WHICH WAS PAID TO CAN OPY DWELLINGS ON 05/11/04. IN VIEW OF THE ABOVE OBSERVATIONS, THE CIT(A) DELETED THE ADDITION MADE BY THE AO. 13. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE I S IN APPEAL BEFORE US. THOUGH THE NOTICE OF HEARING FOR THE HEA RING TODAY HAS BEEN SERVED ON THE ASSESSEE THROUGH THE DEPARTMENT, NONE APPEARED FOR THE ASSESSEE. THEREFORE, WE PROCEED TO HEAR THE LD. DR AND DISPOSE OF THE APPEAL EX-PARTE QUA THE ASSESSEE. 14. WE HAVE HEARD THE ARGUMENTS OF LD. DR AND PERUS ED THE ORDERS OF REVENUE AUTHORITIES AS WELL AS MATERIAL ON RECOR D. WE FIND THAT THE CIT(A) HAS PASSED THE ORDER IN A CRYPTIC MANNER AND THE FINDINGS GIVEN BY HIM WHILE DELETING THE ADDITIONS MADE BY T HE AO UNDER VARIOUS HEADS ARE NOT PROPER/JUSTIFIABLE. AS CONTEN DED BY THE REVENUE 8 ITA NO. 1629/HYD/2014 & C.O. NO. 2/H/15 G.P. REDDY IN THE GROUNDS OF APPEAL, THE CIT(A) ADMITTED THE A DDITIONAL EVIDENCE SUBMITTED BY THE ASSESSEE, WHICH WAS NEVER SUBMITTE D BEFORE THE AO AND THEREBY THE CIT(A) VIOLATED RULE 46A OF THE IT RULES BY NOT REMANDING THE ADDITIONAL EVIDENCE TO THE AO FOR EXA MINATION. 14.1 APPARENTLY, THE LD. CIT(A) HAS NOT PASSED A SP EAKING ORDER. WE ARE OF THE OPINION THAT THE APPLICATION OF MIND TO THE MATERIAL FACTS AND THE ARGUMENTS SHOULD MANIFEST ITSELF IN THE ORD ER. SECTION 250(6) OF THE INCOME TAX ACT MANDATES THAT THE ORDER OF TH E CIT(A) WHILE DISPOSING OF THE APPEAL SHALL BE IN WRITING AND SHA LL STATE THE POINTS FOR DETERMINATION, THE DECISION THEREON AND THE REA SON FOR THE DECISION. AS IS APPARENT FROM THE IMPUGNED ORDER, I N OUR OPINION, THE ORDER PASSED BY THE LD. CIT(A) IS CRYPTIC AND GROSS LY VIOLATIVE OF ONE OF THE FACETS OF THE RULES OF NATURAL JUSTICE, NAME LY, THAT EVERY JUDICIAL/QUASI-JUDICIAL BODY/AUTHORITY MUST PASS RE ASONED ORDER, WHICH SHOULD REFLECT APPLICATION OF MIND BY THE CONCERNED AUTHORITY TO THE ISSUES/POINTS RAISED BEFORE IT. THE REQUIREMENT OF RECORDING OF REASONS AND COMMUNICATION THEREOF HAS BEEN READ AS AN INTEGRAL PART OF THE CONCEPT OF FAIR PROCEDURE AND SAFEGUARD TO E NSURE OBSERVANCE OF THE RULE OF LAW. IT INTRODUCES CLARITY, CHECKS T HE INTRODUCTION OF EXTRANEOUS OR IRRELEVANT CONSIDERATIONS AND MINIMIZ ES ARBITRARINESS IN THE DECISION-MAKING PROCESS. WE MAY POINT OUT THAT A DECISION DOES NOT MERELY MEAN THE CONCLUSION. IT EMBRACES WITHI N ITS FOLD THE REASONS FORMING BASIS FOR THE CONCLUSION. 14.2 IN VIEW OF THE ABOVE DISCUSSION, WE SET ASIDE THE ORDER OF THE CIT(A) AND REMIT THE FILE BACK TO THE AOS FILE TO CONSIDER THE WHOLE SUBMISSIONS AND EVIDENCES FILED BY THE ASSESSEE BEF ORE THE CIT(A) AND DO THE ASSESSMENT DE-NOVO AFTER PROVIDING REAS ONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 15. AS THE ORDER OF THE CIT(A) IS SET ASIDE AND THE FILE IS REMITTED BACK TO THE FILE OF CIT(A), AND THE C.O. FILED BY T HE ASSESSEE, WHICH IS IN SUPPORT OF ORDER OF CIT(A), THE SAME IS DISMISSE D AS INFRUCTUOUS. 9 ITA NO. 1629/HYD/2014 & C.O. NO. 2/H/15 G.P. REDDY 16. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES AND THE C.O. FILED BY THE ASSESSEE IS DISM ISSED. PRONOUNCED IN THE OPEN COURT ON 5 TH FEBRUARY, 2016. SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RAHM AN) JUDICIAL MEMBER A CCOUNTANT MEMBER HYDERABAD, DATED: 5 TH FEBRUARY, 2016 KV COPY TO:- 1) ITO - OSD, RANGE 1, 4 TH FLOOR, AAYAKAR BHAVAN, HYDERABAD 2) SRI G. PITCHI REDDY, FLAT NO. 1291, ROAD NO. 65, JUBILEE HILLS, HYDERABAD. 3) CIT (A)- V , HYDERABAD. 4) CIT I, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD.