- (1.) THOUGH the appeal was admitted on five substantial questions of law but Mr. Kasliwal, counsel appearing for the appellant -assessee submits that the effective issue is in question No. 3, which reads as under: Whether the Tribunal was justified in sustaining the addition at Rs. 1.50 lakhs on the appeal filed by the Revenue against the order of CIT(A), irrespective of the fact that the Tribunal has accepted, that order passed by the CIT(A) is reasoned one ?
(2.) THE appellant is a partnership firm and derived income from sale of liquor. The appellant filed its IT return for the asst. yr. 1985 -86 declaring income of Rs. 50,000. A notice under Section 143 of the IT Act was issued to the appellant and the AO vide order dt. 29th March, 1990, while declining to accept the book result, assessed the net profit of the appellant -assessee at the rate of 3 per cent. The AO estimated the sales from Rs. 3,62,87,231 to Rs. 4,00,00,000, made an addition of Rs. 12,00,000 and assessed the income of the assessee as Rs. 18,60,224. Challenging this order of the AO, the appellant -assessee filed an appeal before the CIT(A). The CIT(A) vide its order dt. 23rd Oct., 1990 allowed the appeal, set aside the addition of Rs. 12,00,000 as made by the AO and remitted the case to the AO to consider the matter afresh, The AO reconsidered the matter and the material placed before it and after considering the material, estimated the sales of the assessee as Rs. 4,00,00,000 and after applying a net profit at the rate of 3 per cent made the addition of Rs. 12,00,000 in the income and after allowing the depreciation, he assessed the income of the appellant as Rs. 18,12,289. The assessee again filed an appeal before the CIT(A), The CIT(A) reduced the addition from Rs. 12,00,000 to Rs. 1,20,000. The assessee has not chosen to challenge the addition of Rs. 1,20,000. However, the Department challenged the order of CIT(A) in appeal before the Income -tax Appellate Tribunal (for short 'the Tribunal') whereby addition of Rs. 12,00,000 has been reduced to Rs. 1,20,000. The Tribunal by the impugned order has enhanced addition from Rs. 1,20,000 to Rs. 1,50,000.
(3.) HEARD , learned Counsel for the parties.;