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Facts
The assessee, engaged in property development, disclosed certain turnover, net profit, and various loans. The Assessing Officer (AO) made an addition of Rs. 1,31,50,000/- as unexplained cash credit under Section 68. The CIT(A) deleted a part of this addition (Rs. 1,02,00,000/-) and confirmed the remaining part (Rs. 29,50,000/-).
Held
The Tribunal held that the CIT(A)'s approach of deleting a part of the addition without calling for a Remand Report from the AO after the assessee filed additional evidence under Rule 46A was contrary to the rules. The CIT(A) should have obtained a Remand Report and considered it before deciding the appeal.
Key Issues
Whether the CIT(A) erred by admitting additional evidence and deleting additions without providing the AO an opportunity to examine them via a Remand Report as per Rule 46A.
Sections Cited
143(3), 68, 46A
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Income Tax Appellate Tribunal, DELHI
(A.Y 2018-19) ITO Vs Mr.Pankaj Singh Ward 58(3) 88, 3rd Floor, Ram Vihar, National Faceless Appeal Centre Delhi,110092 (‘NFAC’), Delhi PAN: AZXPS4757N Appellant Respondent (A.Y 2018-19) Mr. Pankaj Singh Vs ITO 88, 3rd Floor, Ram Vihar, Ward 58(3) Delhi,110092 National Faceless Appeal PAN: AZXPS4757N Centre (‘NFAC’), Delhi Appellant Respondent Assessee by Sh. Sachin Agarwal, CA Revenue by Sh. Ajay Kumar Arora, Sr. DR Date of Hearing 16/07/2025 Date of Pronouncement 25/07/2025 ORDER
PER YOGESH KUMAR, U.S. JM:
The captioned appeals are filed by the Revenue and the Assessee challenging the order of the Ld. CIT(A) dated 28/10/2024 pertaining to Assessment Year 2018-19, wherein the Ld. CIT(A) has partly allowed the Appeal of the Assessee.
Brief facts of the case are that, the assessee who was engaged in property development business during Financial Year 2017-18, disclosed turnover of Rs.4,57,10,076/- and a net profit of Rs.5,71,082/-. In the balance sheet as on 31.03.2018 the assessee disclosed secured loan of Rs.64,14,285/-, unsecured loan of Rs. 1,55,98,500/- and on the asset side, disclosed loans and advances forwarded by the assessee of Rs.1,48,50,585/-. The case was taken up for scrutiny assessment u/s 143(3) of the Income Tax Act, 1961 ('Act' for short) and an assessment order u/s 143(3) of the Act was passed on 16.04.2021 by making an addition of Rs. 1,31,50,000/-, which was received from four creditors as the said loan transaction do not pass the three conditions contemplated u/s 68 of the Act.
As against the assessment order dated 16/04/2021 passed u/s 143(3) of the Act, the Assessee preferred an Appeal before the Ld.
CIT(A). The Ld. CIT(A) vide order dated 28/10/2024, deleted the addition of Rs. 1,02,00,000/- and confirmed the disallowance of Rs. 29,50,000/-. Aggrieved by the deletion of Rs. 1,02,00,000/- the Revenue preferred the Appeal in and as against the confirmation of the addition of Rs. 29,50,000/-, the
The Ld. Departmental Representative vehemently submitted that during the appellate proceedings, the Assessee filed an application under Rule 46A of Income Tax Rules,1962 by producing certain additional evidences. However, the Ld. CIT(A) without providing proper opportunity to Jurisdictional A.O. to counter the additional evidences filed by the Assessee and without obtaining the Remand Report from the A.O., proceeded to delete the partial addition of Rs.
1,02,00,000/-, therefore, submitted that the order of the Ld. CIT(A) is erroneous and the same is deserves to be set aside.
Per contra, the Ld. Assessee's Representative vehemently submitted that the additional documents have been considered by the Ld. CIT(A) which are having evidential value and deleted the partial addition, which requires no interference. Further submitted that the addition confirmed by the Ld. CIT(A) to the tune of Rs. 29,50,000/- is also required to be deleted as the Assessee has substantiated his claim by cogent documents which have been over looked by the Ld.
CIT(A). Thus, sought for dismissal of the Appeal of the Revenue and prayed for allowing the Appeal of the Assessee.
We have heard both the parties and perused the material available on record. The Ld. A.O.in the assessment order, made addition of Rs. 1,31,50,000/- as unexplained cash credit u/s 68 of the Act. During the appellate proceedings, the Assessee filed applicationunder Rule 46 of the Income Tax Rules 1962by producing certain additional evidence. However, the Ld. CIT(A) without calling for the Remand Report or the comment from the A.O., took cognizance of those additional documents and deleted the partial addition. In our considered opinion the approach of the Ld. CIT(A) is contrary to the mandate of Rule 46A of the Rules. The Ld. CIT(A) should have called for the Remand Report and should have decided the issue based on the Remand Report and the submission of the Assessee. Therefore, without making any comment on the merits of the case, we set aside the order of the Ld. CIT(A) and remand the matter to the file of the Ld.
CIT(A) for de-novo adjudication of the appeal of the Assessee. The Ld. CIT(A) is directed to call for the Remand Report from the A.O. before admitting the additional evidence in accordance with Rule 46A of the Rules and decided the appeal in accordance with law after providing opportunity of being heard to the Assessee.
In the result, both the Appeal of the Revenue as well as the Assessee are partly allowed for statistical purpose.