THANAWALA BROTHERS & INNS PVT LTD,THANE vs. PNE C-(72) (1) CIRCLE 3, THANE

In the instant case, the AO, vide assessment order dated 19.03.2024 passed u/s 147 r.w.s. 144 and 144B of the Act, made

The Assessee, being aggrieved, challenged the aforesaid disallowance before the Ld. Commissioner. The Ld. Commissioner, vide the impugned order, observed that despite opportunities, the Assessee failed to furnish item-wise correlation and independent supporting evidence to establish the necessity and nexus of the expenditure with the income earned. Consequently, the Ld. Commissioner sustained the disallowance of Rs.20,09,540/-.

Before us, the Ld. AR, relying upon the additional evidence placed on record, submitted that the said material has a direct bearing on the issue under consideration and, therefore, deserves to be admitted and considered, while adjudicating the allowability of the expenditure.

On the contrary, the Ld. DR opposed the claim of the Assessee and submitted that the additional evidence filed for the first time before the Tribunal ought not to be considered, without examination by the lower authority. Alternatively, the Ld. DR submitted that, if such evidence is to be admitted, then the matter may appropriately be restored to the file of the Ld. Commissioner for examination and decision afresh.

We have heard the parties and perused the material available on record and given thoughtful consideration to the rival claims of the parties. The Assessee has filed a paper book containing

It appears from the paper-book index that the Assessee had, inter alia, filed before the lower authorities the acknowledgment of return, computation of income, audit report and audited financial statements. Before us, the Assessee has additionally filed certain amenities agreements relating to Bank of Baroda, Bajaj and Kotak premises/units, which were not examined by the authorities below.

The aforesaid additional evidence prima facie appears relevant for proper adjudication of the issue, particularly when the disallowance has been sustained substantially for want of item-wise correlation and supporting evidence establishing the necessity and nexus of the expenditure. At the same time, such evidence requires factual verification and examination by the Ld. Commissioner and the Revenue should also have an opportunity to examine the same.

Accordingly, in the interest of justice, the case is remanded to the file of the Ld. Commissioner for decision afresh, suffice to say, by considering the additional evidence filed before us, which the Assessee shall place before the Ld. Commissioner without delay, along with an item-wise correlation of the expenditure and supporting material establishing its nature, necessity and nexus with the corresponding income.

The Ld. Commissioner shall examine the aforesaid material, permit the Revenue/AO to verify the same, wherever considered necessary, and thereafter decide the issue afresh in accordance with law by passing a speaking order, after affording a reasonable opportunity of being heard to the Assessee. We clarify that no opinion is expressed by us on the merits of the claim.

In the result, the appeal filed by the ASSESSEE is allowed for statistical purposes.