Assistant Commissioner of Income Tax Central Circle-2(1), Bangalore V. M/s Chaitanya Properties Pvt Ltd , Bangalore

ITA 618/BANG/2017

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 1595 (ITAT-BANGALORE)
• Duration Of Justice: 5 year(s) 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2022
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 14-03-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: V. CHANDRASHEKAR
• Keywords: Capital asset; Assessment record; Rule 8D; Capital Gains
• Section: 148; 143(3); 153A; 14A; 13; 153; 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA Nos.617 & 618/Bang/2017 Assessment years : 2010-11 & 2011-12 The Deputy Commissioner of Income Tax, Central Circle 2(1), Bangalore. Vs. M/s. Chaitanya Properties Pvt. Ltd., No.17, Sankey Road, Bengaluru – 560 020. PAN: AAACC 5900A APPELLANT RESPONDENT Appellant by : Dr. Manjunath Karkihally, CIT(DR)(ITAT), Bengaluru. Respondent by : Shri V. Chandrashekar, Advocate. Date of hearing : 02.03.2022 Date of Pronouncement : 23.05.2022 O R D E R Per Chandra Poojari, Accountant Member These appeals by the revenue are directed against the separate orders, both dated 29.12.2016 of the CIT(Appeals)-11, Bangalore for the assessment years 2010-11 & 2011-12. These appeals were heard together and disposed of by this common order for the sake of convenience. 2. Common grounds are raised by the revenue in these appeals and the grounds raised for AY 2010-11 are as follows:- “1. The learned C.I.T.(Appeals) erred in allowing the appeal of the assessee relying on the decision of the Hon'ble Supreme ITA Nos.617 & 618/Bang/2017 Page 2 of 16 Court in the case of M/s.Calcutta Knitwears (362 lTR 673)(SC) and the Boards Circular 24/2015 dated 31.12.2015. 2. The learned C.I.T.(Appeals) failed to appreciate that in the case of M/s.Calcutta Knitwears, the A.O. of the "searched person" and the "other person" were not the same whereas in the case the of the assessee, the A.O of the "searched person" and the “Other Person" are one and the same. 3. The Boards Circular no.24/2015 dated 31.12.2015 does not contemplate that satisfaction should be recorded in the case of the searched person and the other person to proceed with u/s 153C when the A.O. is the same. 4. The learned C.I.T.(Appeals) failed to appreciate that the same person i.e. when the .AO of the "searched person" and the "Other Person" are one and the same, cannot have contradictory views about satisfaction or about belongingness of the seized material. 5. The CIT(Appeals) erred in not taking into cognizance the decision of the Hon'ble Delhi ITAT in the case of M/s. Super Malls Pvt. Ltd. (76 Taxmann.com 267) dated 22.11.2016 wherein the order of the ITAT in ITA Nos.1693-1696/2015 dated 11.12.2015 was set aside. The ITAT, Delhi, had held that recording of satisfaction by the AO of the searched person was required even if the AO for the "searched person" and the "Other Person" are one and the same. 6. The learned C.I.T.(Appeals) erred in relying on the decision of the Karnataka high Court in the case of CIT Vs. IBC Knowledge Park P Ltd. (385 ITR 346)(Karnataka H.C.) allowing the appeal of the assessee stating that only when incriminating material belonging to the assessee is available, there is a case for issue of notice u/s.153C of the Income Tax Act, 1961. 7. The CIT(Appeals) erred in failing to take into account the decision rendered the Karnataka High Court in the case of M/s. Canara Housing Development Corporation (49 Taxmann.com 98) wherein it was held that "total income" and not merely "undisclosed income" that is required to be ITA Nos.617 & 618/Bang/2017 Page 3 of 16 assessed in proceedings u/s 153A which are applicable in proceedings u/s 153C also. 8. The interpretation of the learned C.I.T.(Appeals) is erroneous to the extent that the words "Incriminating materials" does not find place in the provisions of section 153C of the I.T. Act. The learned C.I.T.(Appeals)erred in stating that incriminating materials was sine qua non for invocation of provisions of section 153C. 9. For the above and any other ground that may be urged, altered, substituted at the time of hearing.” 3. The facts of the case are that the assessee had filed its original return of income for AY 2010-11 on 7.11.2010 declaring NIL income. There was a search conducted on 6.8.2012 on M/s. Srinivasa Trust which was the same address of the assessee. During the course of search certain documents belonging to the assessee were found and seized. Notice u/s. 153C was issued to the assessee and in response the assessee filed return of income on 18.3.2014. The AO completed the assessment proceedings u/s. 153C r.w.s. 143(3) of the Act vide order dated 30.3.2015 determining income at Rs.96,60,64,770 as against returned loss of Rs.93,28,580. Against this, the assessee filed appeal before the CIT(Appeals) which was decided in favour of the assessee following his order in the assessee’s own case for the AY 2007-08. Against this, the revenue is in appeals before us. 4. The ld. DR submitted that the learned C.I.T.(Appeals) failed to appreciate that in the case of M/s.Calcutta Knitwears, the A.O. of the "searched person" and the "other person" were not the same whereas in the case the of the assessee, the A.O of the "searched person" and the “Other Person" are one and the same. The Boards Circular No.24/2015 dated 31.12.2015 does not contemplate that satisfaction should be recorded in the case of the searched person and the other person to ITA Nos.617 & 618/Bang/2017 Page 4 of 16 proceed with u/s 153C when the A.O. is the same. When the AO of the "searched person" and the "Other Person" are one and the same, there cannot be contradictory views about satisfaction or about belongingness of the seized material. The words "Incriminating materials" does not find place in the provisions of section 153C of the Act to hold that incriminating material was sine qua non for invocation of provisions of section 153C. 5. The CIT(Appeals) erred in allowing the appeal of the assessee relying on the decision of the Hon'ble Supreme Court in the case of M/s.Calcutta Knitwears (362 lTR 673)(SC), Karnataka High Court Judgment in the case of CIT Vs. IBC Knowledge Park P Ltd. (385 ITR 346)(Kar) stating that only when incriminating material belonging to the assessee is available, there is a case for issue of notice u/s.153C of the Income Tax Act, 1961 and also relying on the Boards Circular 24/2015 dated 31.12.2015. The ld. DR brought to our notice the decision of the Karnataka High Court in the case of M/s. Canara Housing Development Corporation (49 Taxmann.com 98) wherein it was held that "total income" and not merely "undisclosed income" that is required to be assessed in proceedings u/s 153A which are applicable in proceedings u/s 153C also. He therefore prayed for allowing the appeals filed by the revenue. 6. The ld. AR submitted that the AO has not discharged the burden of proving that there is a valid initiation of proceedings u/s 153C to assume jurisdiction to make an assessment under section 153C of the Act. The proceedings initiated u/s 153C are not based on proper reasoning but done with no application of mind inasmuch as the following:- Material found, was not hitherto undisclosed to the income tax department & income there from was also disclosed to the department. 7. He submitted that there was a search conducted on one M/s. Srinivasa Trust on 06/08/2012, which happened to be located in the same ITA Nos.617 & 618/Bang/2017 Page 5 of 16 address as that of the Respondent. During the course of search certain documents, belonging to the Respondent, were found and seized. The AO in para.3 of the impugned assessment order states that documents marked as 14/ST/132 & 18/ST/132, belonging to the Respondent, were found and seized. As per the AO, the material 14/ST/132 contains a JDA dated 05.02.2005 between the assessee & Prestige Estates Projects Pvt. Ltd [PEPL] and other related documents. Material 18/ST/132 contains details of loans sanctions to the assessee. The JDA is noticed in the assessment orders passed u/s 143(3) for the A.Y's 2005-06 & 2007-08 on 31/12/2007 & 31/12/2009, long before the search on 06/08/2012. He submitted that neither of the above documents are incriminating in nature, nor are they hitherto undisclosed to the department. 8. He further submitted that in fact, documents contained in material No. 14/ST/132 formed the very basis for the department initiating proceedings u/s 148 on 06/03/2012 for the A.Y. 2005-06, on the ground that the document represented income hitherto concealed. Despite the objection raised by the assessee that the said document was very much disclosed to the department in the scrutiny assessment proceedings for A.Y. 2005-06 & also considered and dealt with by the concerned AO, the department proceeded to estimate income based on the covenants contained in the JDA and assessed income escaping assessment which order came to be confirmed by the CIT(Appeals). However, the assessee succeeded in its appeal before the ITAT which quashed the assessment vide its order in ITA No.551/Bang/2014 dated 21.11.2014 and the order of the ITAT was upheld by the Jurisdictional High Court for A.Y. 2005-06 which is placed at pages 23 to 54 of the paperbook. 9. The ld. AR submitted that as regards material 18/ST/132, it contains details of loans sanctioned by financial institutions and these are all duly disclosed in the balance sheets of the assessee and do not in any manner ITA Nos.617 & 618/Bang/2017 Page 6 of 16 constitute incriminating material. He submitted that that for a material to be labelled as incriminating, the same should have not been disclosed to the department and must also indicate income which a person has neither disclosed, nor has the intention to disclose ever and unearthed during the search proceedings. In the present case, the materials relied upon to initiate proceedings u/s 153C are not only known to the department long before proceedings being initiated u/s 153C, but also income from the same sought to be brought to tax even before they actually accrue to the assessee. In the light of these facts these impugned materials namely 14/ST/132 & 18/ST/132 cannot be labelled as incriminating material which is a sine qua non for initiating proceedings u/s 153C of the Act. 10. He further submitted that the assessee was once again taxed on the income from the said JDA for the A.Y. 2009-10 by an order u/s 143(3). The addition made in this order was deleted by the CIT(Appeals) in his appellate order holding that the lands which formed the subject matter of JDA were being held as Stock in Trade and the same can be taxed only when sold/transferred by a registered sale deed and not before. The said order of the CIT(Appeals) was upheld by the jurisdictional ITAT vide its order dated 27/3/2015. 11. Therefore, it is virtually a settled fact that the documents relied upon by the department to initiate proceedings u/s 153 are not INCRIMINATING but only BENIGN documents, are also known to the department and do not represent any undisclosed income. He relied upon the decision of the Jurisdictional Karnataka High Court in the case of CIT vs IBC Knowledge Park .P. Ltd, 385 ITR 346, wherein the Hon'ble High Court has in unequivocal terms held that "The Detection of Incriminating Material leading to an inference of Undisclosed Income is a sine qua non for invocation of section 153C of the Act.” He also relied upon the following judgments. ITA Nos.617 & 618/Bang/2017 Page 7 of 16 12. In CIT vs Lancy Constructions, 383 ITR 168 (Kar) the Hon'ble High Court has held that "In the absence of Incriminating Documents having been found, the same accounts of the assessee were re assessed by making further reinvestigations and this was impermissible, as the same would amount to reopening a concluded assessment, without there being any additional material found at the time of search. Otherwise it would give the Revenue a second opportunity to reopen a concluded assessment which is impermissible in law". This decision was further approved in the case of Pr.CIT vs Delhi International Airport Pvt Ltd., in ITA No. 322/2018, order dated 29th September 2021. 13. The ld. AR submitted that In the light of the above incontrovertible facts the very initiation of proceedings u /s 153C in the case of the assessee is illegal being in contravention of the provisions contained in the Act and thus renders the entire proceedings from issue of notice upto the passing of the assessment order, void ab initio. 14. He further submitted that it is important to take note of the fact that the notice u/s 153C was issued on 30/08/2013, which is the date to be considered for commencement of proceedings u/s 153C & deemed to be the date of search. The assessments for the A.Y. 2010-11 & 2011-12 do not abate on 30/08/2013. In view of the fact that these assessments do not abate, the same cannot be disturbed in the absence of incriminating material which warrants disturbance of the income returned originally. It is an undisputed fact that there is no such incriminating material unearthed during the search. He relied on the decision of the coordinate bench of this ITAT in the case of Sree Lakshmi Venkateshwara Minerals vs DCIT 123 taxmann.com 255 (Bang Trib). ITA Nos.617 & 618/Bang/2017 Page 8 of 16 15. He thus pleaded that the decision of the CIT(Appeals) cancelling the assessment orders passed u/s 153 C r.w.s. 143(3) of the Act is to be upheld. 16. We have heard the rival submissions and perused the record. There was a search in the case of Srinivasa Trust on 6.8.2012. In the course of search documents belonging to the assessee were found. The documents seized and marked as Annexure 14/ST/132 comprised Joint Development Agreement dated 5.2.2005 between the assessee and PEPL and related documents. The related document marked as 18/ST/132 consisted of loan sanction details of the assessee. After duly recording the reasons, notice u/s. 153C of the Act dated 30.8.2013 was issued and served on the assessee requiring the assessee to file return of income in the prescribed form by 10.9.2013. In this case, search took place on 6.8.2012. Now the dispute is with regard to the framing of assessment u/s 153C of the Act. There was seized material marked as 14-ST/132 & 18-ST/132. The contention of the Ld. A.R. is that these seized materials are already on record relevant to proceedings u/s 148 of the Act on 6.3.2012 for the assessment year 2005-06. According to the A.R., they are not incriminating material. In our opinion, this argument of the Ld. A.R. holds no merit since the provisions of section 153C of the Act do not discuss that seized material should be incriminating in nature or undisclosed in nature for pending assessment. It says only about any material, articles, things, books of accounts, documents seized or requisitioned that belongs to or pertains to person other than the searched person. In our opinion, there were seized material procured during the course of search action in the case of Srinivasa Trust on 6.8.2012. Therefore, framing assessment thereafter u/s 153C of the Act is valid and the question of abatement or non-abatement do not arise since there are seized material. Accordingly, the argument of the assessee’s counsel that the assessment for the ITA Nos.617 & 618/Bang/2017 Page 9 of 16 assessment year 2010-11 & 2011-12 do not abate on 30.8.2013 is incorrect and the ratio laid down by the Hon’ble Karnataka High Court in the case of Delhi International Airport Ltd. cited (supra) do not come into assistance of assessee since there is seized material. 17. Accordingly, the issue of framing of assessment u/s. 153C of the Act is upheld and order of the CIT(Appeals) is reversed on this issue. On merits 18. Further, the ld. DR submitted that in view of ground No.9, he may be permitted to argue that the issue on merits may be remitted to the CIT(Appeals) to decide each issue independently, after going through the earlier order of the Tribunal in ITA Nos.52 & 125/Bang/2013 dated 27.3.2015. As the CIT(Appeals) has failed to adjudicate each ground independently on merits by identifying similarity of facts on the additions in the present year under consideration vis-à-vis the preceding assessment year relied on by him in his order. 19. The ld. AR submitted that the additions made in the order of assessment with respect to the JDA entered into with Prestige Estates Pvt Ltd are as under:- 1) A.Y. 2010-11 (i) Rs. 75,83,01,870/- made to Income from Business; (ii) Rs. 75,83,01,870/- made to Income from Business; (iii) Rs.9,92,46,023/- made to Income from Long term Capital Gains (LTCG); (iv) Disallowance u/s 14 A Rs.6,33,414/-. 2) A.Y. 2011-12 (i) Rs. 325,32,46,980/- made to Income from Business; (ii) Rs. 325,32,46,980/- made to Income from Business; ITA Nos.617 & 618/Bang/2017 Page 10 of 16 (iii) Rs.71,90,45,278/- made to Income from Long term Capital Gains (LTCG); (iv) Rs. 84,92,10,510/- made to Income from Short term Capital Gains (STCG). (v) Disallowance u/s 14A Rs.7,91,031/-. 20. He submitted that the AO has in the assessments order concluded that the Developer has completed development and has handed over the Owners constructed Area to the Respondent and has received the Developer’s share of land from the Respondent in lieu thereof. The AO having come to the said conclusion proceeded to assess the income of the Respondent on the basis that the Respondent had transferred land to the Developer & had received consideration in the form of Built up area during the previous year relevant to the assessment year 2010-11 and assessed the Income from Business at Rs.74,76,30,690/-, Income from Long Term Capital Gains at Rs.9,92,46,023/-, Income from Short Term Capital Gains at Rs.11,72,12,043/- & Disallowance u/s 14 A Rs.6,33,414/-. 21. Likewise, for the assessment year 2011-12 he assessed the Income from Business at Rs.325,32,46,980/-, Income from Long Term Capital Gains at Rs.71,90,45,278/-, Income from Short Term Capital Gains at Rs.84,92,10,510/- & Disallowance u/s 14A Rs.7,91,031/-. 22. In the assessment order for the A.Y. 2010-11, the AO has concluded that the sum of Rs.100 crores received by way of Non refundable deposit is nothing but consideration for agreeing to take a lesser share in the built up area and that the same is income in the hands of the Respondent for the A.Y. 2010-11 as the sum of Rs.100 crores is received during the previous year relevant to the said A.Y. He therefore proceeded to assess the Income from Business at Rs.75,83,01,870/- & income from Long Term Capital Gains at Rs.9,92,46,023 & income from Short Term Capital Gains at Rs.11,72,12,043/-. ITA Nos.617 & 618/Bang/2017 Page 11 of 16 23. The assessee has during the course of the assessment proceedings submitted that the supplemental agreement dated 15/5/2009 no doubt confers PEPL to receive a larger portion of the commercial area to be built up but however PEPL will get the absolute rights to the same only after PEPL hands over Our Share of Built up area only after the Construction of which is complete in all respects and duly certified to be so by the Architect of the Project. 24. The sum of Rs.100 crores is not consideration but represents Non Refundable Deposit & will remain as Non refundable Deposit till such time the Developer completes his part of the contract. In the event the Developer is not able to perform & is forced to abandon the contract for any reason what so ever the Non-Refundable Deposit would then remain with the assessee & would partake the nature of a Capital Receipt. The same will fructify into income only upon the developer performing his part of the contract & will become converted into income on a proportionate basis as and when the Developer hands over the Respondent’s share of the built-up area to the Respondent. In other words, the Respondent is to receive total built up commercial space of 6,99,469 sft from PEPL. The Non-Refundable deposit of Rs100 crores is in respect of this entire agreed area of 6,99,469 sft of built up area. If the developer were to hand over 69,947 sft being 10% of the agreed built up area in a particular financial year, then Rs10 crores would be transferred to income from the Non-Refundable deposit of Rs.100 crores & the Non-Refundable Deposit as on 31st March of the said financial year would stand reduced to Rs.90 crores. 25. As a natural corollary since no built-up area is received by us during A.Y. 2010-11 & 2011-12, no portion of the Non-Refundable Deposit of Rs.100 crores would fructify into income for the said assessment year. ITA Nos.617 & 618/Bang/2017 Page 12 of 16 26. The fact that the land which is subjected to Joint Development is Stock In Trade of the assessee is a very important fact to take note off in order to decide the exact point in time as to when the ownership in these lands held as stock in trade gets actually transferred from the Respondent. The application of section 45 is limited to sub section (2) of section 45 in as much as the impugned lands are held as Stock in Trade. The provisions of section 53A of the Transfer of Property Act apply to an asset held as a Capital asset /investment & not to Stock In Trade. 27. It is submitted that from a reading & understanding of the JDA what has to be ascertained is the date on which PEPL starting exercising the POA to convey ownership of the undivided interest in the land held as Stock in Trade & treat only those portions of undivided interest in land which are actually registered in favour of PEPL or its nominees or any third person for that matter & bring to tax the Capital Gains arising out of such conveyance in such years in which it is transferred. The sale of undivided interest in land has two components of income. The first is Income from Capital Gains which is to be worked out as per the provisions of sub section (2) of section 45 & the other component being Income from Business, which is to be computed on the basis of the value attributed to the building in the office of the sub – registrar for purposes of stamp duty at the time of registration of the sale deed of an apartment. The Sale deed for an apartment will consist of two components namely Value of the undivided interest in land & Value of building. The purchaser of the apartment will pay a composite price which will be split up into the above two components for purpose of registration. If one were to study the Sale deeds executed by PEPL transferring ownership of the apartment to the purchasers, one can find out the value per sft of land and the value per sft of building. Both these components are to be taxed in the assessment year relevant to the previous year in which the undivided interest in land is actually conveyed ITA Nos.617 & 618/Bang/2017 Page 13 of 16 and to the limited extent of the land actually conveyed by the process of registration. 28. It is submitted that the property being held by way of stock in trade, the sale of the same will have to be recognised only when the same is actually conveyed by a registered sale deed. This principle which is applicable to stock in trade has been upheld by the Jurisdictional Bangalore Bench of the ITAT in the assessee’s own case for the A.Y. 2009-10 wherein the Tribunal, confirming the decision of the CIT(A) has held categorically in its order that “When an immoveable property is held as Stock in Trade, the same is to be considered as sold only when the sale is conveyed by means of a registered sale deed and not before that.” 29. Further on the issue of Non Refundable Deposit, the ITAT, again confirming the decision of the CIT(A), held that “The Non Refundable Deposit would partake the character of sale consideration only upon the ownership of the undivided interest in land being transferred by a sale deed and not before that and then only to the extent of the amount proportionately applicable to the extent of land so transferred.” 30. Thus, from the above brief submissions made above as regard to the merits of the matter, it is submitted that the additions made in the order of assessment is not warranted and further the binding decision of the Jurisdictional ITAT, Bangalore Bench in assessee’s own case for the AY 2009-10 in ITA No. 52/Bang/2013, order dated 27/03/2015 supports the contention of the assessee, as no income accrues to the assessee either by way of Income from Business and nor by way of Capital Gains whether Long or Short Term Capital gains which has held that when an immovable property is held as stock-in-trade, the same is to be considered as sold only when the sale is conveyed by means of a registered sale deed and not before that. ITA Nos.617 & 618/Bang/2017 Page 14 of 16 31. Thus, the additions made by the AO have been rightly deleted by the CIT A for the A.Y. 2010-11 & 2011-12 & the order of the CIT(A) needs to be confirmed in the interest of Justice. 32. The ld. AR also submitted that assessee has started declaring income from the said JDA as & when the Sale deeds are actually registered on & from A.Y. 2012-13. The Respondent has so far declared a Total Taxable income of Rs. 435,43,56,426/- which includes a sum of Rs. 310,96,66,066/-as Income from Business & Rs.124,46,90,420/- as Income from Long Term Capital Gain which are income arising out of the JDA on upto A.Y. 2020-21. The assessee has paid the due taxes & assessments are completed for most of the years except A.Y. 2020-21, which is in progress. 33. The details of the Returns filed for the A.Y’s 2012-13 to 2020-21 & a consolidated chart showing income declared under the heads Business Income & Long Term Capital Gains, year wise, arising out of the Project is also filed separately before this Tribunal. This proves that there is no intention on the part of the assessee not to disclose income from the JDA but that the assessee is declaring the same in accordance with law. Any addition made in A.Y. 2010-11 & 2011-12 would amount to double addition & double collection of taxes on the very same income. Addition of Rs. 6,33,414/-/- & 7,91,031/- made by way of disallowance u/s 14A of the Act: 34. It is submitted that there is no incriminating seized material which has bought to the notice of the AO that income has escaped assessment on this count. The addition made by the AO is purely based on information available in the assessment records of the assessee and not based on any incriminating seized material which leads to an inference of undisclosed income. The Addition thus fails on this ground. The fact that these ITA Nos.617 & 618/Bang/2017 Page 15 of 16 assessments do not abate is an important aspect & hence an addition u/s 14A cannot be made in the absence of incriminating material. 35. There is no proper satisfaction arrived at by the AO to come a conclusion that disallowance of expenses is indeed warranted. Several Appellate authorities have held that application of the provisions of section 14A cannot be done without application of mind and that a proper satisfaction is essential to proceed with disallowance. The following decisions are in support of this proposition:- 36. Reliance is placed on the assessee’s own case in ITA No.52/Bang/2013 for the A.Y. 2009-10 in favour of the assessee and the case of DCIT vs Subramanya Constructions & Development Co. Ltd 154 ITD 303, ITAT Bangalore Bench. 37. Further it is now a settled law that any disallowance of expenditure u/s section 14A by applying rule 8D (2)(ii) & (iii) cannot exceed the income earned from the said investment. In the present case the income earned is NIL and hence no expenditure can be disallowed. The assessee relies upon the following decisions in support of the above said proposition:- CIT vs Cortech Energy Pvt Ltd 372 ITR 97, (Guj); CIT vs Lakhani Marketing 272 CTR 265, (P&H); 38. Wherefore in the light of the above facts and circumstances of the case it is prayed that the appeals of the revenue are to be dismissed. 39. We have heard both the parties and perused the material on record. We find that the CIT(Appeals) has passed a cryptic order on merits on the additions made by the AO and his findings are as follows:- “6.3 In view of the answer to question raised in ground no.2 in favour of the appellant, it is not necessary to answer ground No. ITA Nos.617 & 618/Bang/2017 Page 16 of 16 4, 5, 6 & 7 which are on the merits of the addition. In this appeal, however, it would be relevant to state that the issues raised in Grounds No.4, 5 & 6 are also squarely covered in favour of the appellant by virtue of decision of the Hon’ble ITAT Bangalore Bench in the appellant’s own case for the AY 2009-10 in I.T.A. No.52/Bang/2013 and I.T.A. No.125/Bang/2013 dated 27.03.2015.” 40. We have heard both the parties and perused the material on record. In order to render substantial justice, we deem it appropriate to remand the issues on merits to the CIT(Appeals) to be decided in accordance with law. The CIT(Appeals) is directed to pass a detailed order on merits independently based on evidence filed qua each addition for the assessment years under consideration, after providing opportunity of being heard to the assessee as well as the AO. 41. In the result, the revenue’s appeals are allowed for statistical purposes. Pronounced in the open court on this 23 rd day of May, 2022. Sd/- Sd/- ( BEENA PILLAI ) ( CHANDRA POOJARI ) JUDICIAL MEMBER ACCOUNTANT MEMBER Bangalore, Dated, the 23 rd May, 2022. /Desai S Murthy /VG Copy to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR, ITAT, Bangalore. By order Assistant Registrar ITAT, Bangalore.