ACIT-16(3), FOURTH FLOOR vs. MUFFAZAL LAKDAWALA, RNA MIRAGE S.K AHIRE MARG

The assessee being aggrieved challenged the said additions by filing 1st appeal before the Ld. Commissioner and during the appellate proceedings filed ITRs of both the creditors mentioned above, for the AY 2020-21 thereby proving the identity and credit worthiness of the credit holders. The assessee also provided confirmations from the aforesaid two parties as well as also filed copy of cheque issued by Anjuman E-Mohammadi for Rs.1,50,00,000/- dated 04.10.2019. and the bank statement of the assessee with Axis Bank, wherein the amount of Rs. 1,50,00,000/- has been credited on 07.10.2019. The assessee further filed his bank statement of account maintained with HDFC Bank, which also shows credit of Rs. 1,75,00,000/- dated 30.04.2019, as against the confirmation given by Reshma Jairam Shetty, about the payment of Rs. 1,75,00,000/- made on 25.04.2019. Muffazal Lakdawala

The Revenue Department being aggrieved has preferred instant appeal. The Ld. DR mainly emphasized that the Ld. Commissioner allowed the claim of the assessee, without proper verification and affording an opportunity to the AO and without satisfying the legal requirements for establishing credit worthiness and genuineness of the loan transactions under Section 68 of the Act. Further, the Ld. Commissioner committed an error and violation of Rule 46 (9) of the Rule of the Income Tax Rules,1962 by admitting and relying on fresh evidences. Further, the Ld. Commissioner cannot substitute his own findings, over those of the AO, without directing independent verification.

On the contrary, the Ld. Counsel for the assessee submitted that the assessee has duly submitted the relevant documents before the Ld. Commissioner, may be first time, however, it is a fact that the Ld. Commissioner by issuing a notice dated 10.04.2024 under Section 250 of the Act has specially asked for the following details vide Annexure mentioned below: - In connection with the appeal proceedings, you are requested to file the following on or before 25/04/2024: Muffazal Lakdawala

The assessee, thus in response to said notice dated 10.04.2024 submitted the relevant documents, not at his own desire but in fact on asking by the Ld. Commissioner specifically and therefore, according to Rule 46 (A) of the Income-tax Rules, 1962 {in short ‘Rules’}, the Ld. Commissioner is not precluded from entertaining the additional evidence and/or documents for adjudication of the issue/case involved in its right perceptive and proper manner. Further the said documents, somehow were not available at the time of assessment proceedings and therefore, on being asked by the Ld. Commissioner, the assessee submitted the same.

We have heard the parties and perused the material available on record. No doubt in Rule 46 (A) of the Rules, there are certain conditions for admission of additional evidence. However, sub-section 4 of Rule 46 (A) enumerated an exception that Ld. Commissioner is having powers to direct the production of any document, or the examination of any witness, to enable him to dispose of the appeal, or for any other substantial cause, including the enhancement of the assessment or penalty (whether on his own motion or on the request of the Assessing Officer) under clause (a) of sub- Muffazal Lakdawala

We observe from the order of the Hon’ble Juri ictional High Court in the case of CIT – II Nagpur Vs. Suretech Hospital and Research Center Limited 293 ITR 53/164 taxmann 168 (Bombay) wherein the Hon’ble High Court has held that the appellate authority can permit production of document, which enable him to dispose of the appeal. In the facts of the case, the finding given by the Tribunal that the documents produced were necessary for disposal of the appeal on merits and therefore no question of law arise from said finding of the fact recorded by the Tribunal.

Coming to the instant case, no doubt the power of the Ld. CIT (A) is co-terminus that of the AO and it is a fact that in the instant case, in the impugned order the Ld. Commissioner failed to mention that the documents filed by the assessee are essential for adjudication of the issue, however, it is a fact that the Ld. Commissioner specifically asked the assessee to file Muffazal Lakdawala

Thus, in result, the Revenue’s appeal is dismissed. Order pronounced in the open court on 29.12.2025. (RENU JAUHRI) (NARENDER KUMAR CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER * Tarun Kushwaha Sr. Private Secretary.