AEGIS CARE ADVISORS PRIVATE LIMITED,MUMBAI vs. DCIT, CIRCLE 15(1)(1), MUMBAI

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ITA 2657/MUM/2026Status: DisposedITAT Mumbai31 July 2026AY 2016-175 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the assessee's inability to furnish certain documents arose from a genuine misunderstanding, and the CIT(A) should have admitted the additional evidence. The matter was restored to the CIT(A) for fresh adjudication after admitting the evidence.

What were the facts?

The Assessing Officer (AO) treated share premium received by the assessee as a bogus transaction and added it to the total income. The assessee argued that relevant evidence was submitted, but the AO claimed non-receipt and passed the assessment order. The CIT(A) rejected additional evidence filed by the assessee.

What were the issues?

Whether the CIT(A) erred in rejecting additional evidence without proper examination, and if the share premium addition under Section 68 was justified without considering all evidence.

Which sections of the Income-tax Act were involved?

Section 68,Section 250,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI

Before: SHRI ANIKESH BANERJEE & SHRI BIJAYANANDA PRUSETH

आदेश / ORDER PER: SHRI ANIKESH BANERJEE, (JM): The instant appeal of the assessee filed against the order of the NFAC, Delhi [for brevity “Ld. CIT(A)”], order passed under Section 250 of the Income Tax Act, 1961 (for brevity ‘the Act’), for Assessment Year 2016-17, date of order 07.01.2026. The impugned order emanated from the order of the Ld. Assistant Commissioner of Income Tax Circle 15(1)(1), Mumbai (for brevity ‘Ld. AO’), order passed under Section 143(3) of the Act, date of order 24.12.2018.

2.

The brief facts of the case are that the assessee filed the return by declaring total loss amount to Rs. 5,96,09,665/-. Subsequently, the case was selected for scrutiny and the assessment was completed. The Ld. AO found that the assessee had beneficiary of the share premium amount to Rs. 6,88,78,096/- which was duly received by allotting the preference & Equity shares to India Quotient 2 (IQ2) and Shri Anand Lunia total amount to Rs. 6,88,78,096/-. The Ld. AO treated the entire investment in equity and preference share as a bogus transaction which is not found in the books of the accounts of the assessee. So, in absence of any proper explanation the entire amount was added back with the total income of the assessee. The aggrieved assessee filed an appeal before the Ld. CIT(A) and filed the additional evidence during the course of appellate proceedings. But the Ld. CIT(A) observed that in assessment order the Ld. AO considered all the documents of the assessee. So, the additional evidence filed by the assessee is duly rejected and the addition is confirmed. Being aggrieved, assessee filed an appeal before us.

3.

The Ld. AR contended that during the assessment proceeding, the assessee had submitted the relevant evidence. The assessee had allotted the preference share and equity share to Shri Anand Lunia and IQ2 and the details of transactions are duly submitted before the revenue authorities. The Ld. AR further submitted notarized affidavit duly sworn on dated 28.07.2026 by the Director of the assessee company, Mr. Jagjit Singh and he explained the reasons for non-compliance of the evidence before the Ld. AO. The relevant part of the said Affidavit is reproduced as below:

“4. That the Ld. Assessing Officer (Ld. AO), vide notice u/s. 142(1) of the Act dated 24.11.2018 sought certain details with regard to issue of shares to India Quotient 2 and Mr. Anand Lunia including copy of bank statement, capital account and balance sheet for relevant assessment year, copy of Board Resolution, copy of ITR-V and computation of income, to which the Appellant duly furnished reply dated 28-11-2018 through online mode/e-processing portal along with all supporting documents and evidences as called for. Thereafter, another notice dated 17.12.2018 was issued seeking similar information/details, which was also duly complied with by the Appellant vide reply dated 18.12.2018 along with all supporting documents and evidence through online mode/e-processing portal. 5. However, thereafter vide show cause notice dated 20-12-2018, the Ld. AO stated that the supporting documents/details called for vide notice dated 17-12-2018 were not received and required the appellant to explain on or before 21-12-2018 (1 day). Upon becoming aware of the same, the appellant was shocked since the requisite details and supporting evidence had already been furnished twice through online mode/e-proceeding portal and therefore, in order to avoid any confusion or discrepancy, the appellant decided to furnish the details personally before the Ld. AO. 6. However, on 21-12-2018 (Friday), the person handling the assessment proceedings on behalf of the appellant was out of station and therefore could not appear before the Ld. AO on the scheduled date of hearing. Thereafter, on the immediately succeeding working day i.e. 24-12-2018 (Monday), when the representative of the appellant personally appeared before the Ld. AO, the Ld. AO for the first time specifically clarified that copies of bank statements, ITR-V, capital account and balance sheet of the investors were required. The appellant during all this time believed that what the AO was seeking was copies of bank statements, ITR-V, capital account and balance sheet of the appellant. It was only after the appellant personally appeared before the Ld. AO on 24-12-2018 that it became clear to him that the Ld. AO was seeking all this details for the investors and not the appellant. The appellant assured the Ld. AO that the same would be furnished shortly. However, on the very same day itself i.e. 24-12-2018 the Ld. AO proceeded to pass the assessment order u/s 143(3) of the Act making addition of Rs. 6,88,78,096/-u/s 68 of the Act.”

4.

The Ld. AR contended that the identical issue is duly adjudicated by the Coordinate Benches of ITAT where the Benches have directed to accept the Additional Evidence to the revenue to adjudicate on merit. The Ld. AR respectfully relied on the following orders of the Coordinate Benches of ITAT- Mumbai & Delhi.

i. Javed Rasool Shaikh vs ITO, ITA No. 273/Mum/2025 Dated 18/03/2025. ii. Dayalu Fashions Pvt Ltd vs. ITO, ITA No. 5743/Del/2025 Dated 04/05/2026.

5.

The Ld. DR argued and stands in favour of the orders of the revenue authorities.

6.

Having considered the rival submissions and the material available on record, we find that the assessee has consistently contended that the requisite details were either furnished during the assessment proceedings or that the inability to furnish certain investor-related documents arose due to a genuine misunderstanding regarding the nature of the information sought by the Ld. AO. The notarized affidavit of the Director also explains the circumstances leading to the alleged non-compliance. We further note that the assessee sought to place the relevant documents on record before the Ld. CIT(A) by way of additional evidence under Rule 46A of the Income-tax Rules, 1962. However, the Ld. CIT(A), without properly examining the explanation furnished by the assessee or the necessity of such evidence for effective adjudication, declined to admit the additional evidence and proceeded to confirm the addition. In our considered view, the facts and circumstances of the present case warrant a liberal approach in the interest of substantial justice. The principles of natural justice require that a party should be afforded a fair and effective opportunity to substantiate its claim, particularly where the additional evidence goes to the root of the controversy and may have a bearing on the determination of the issue under section 68 of the Act. Accordingly, we deem it appropriate to set aside the impugned order of the Ld. CIT(A) and restore the matter to his file with a direction to admit and examine the additional evidence in accordance with law, after calling for a remand report from the Ld. AO, if considered necessary, and thereafter to pass a reasoned and speaking order after granting adequate opportunity of hearing to both parties. It is clarified that we have not expressed any opinion on the merits of the addition under section 68 of the Act, and all issues are left open for fresh adjudication by the Ld. CIT(A) in accordance with law. The assessee is also directed to extend full cooperation in the appellate proceedings and shall not seek unnecessary adjournments. In the result, the appeal of the assessee is allowed for statistical purposes.

7.

In the result, the appeal of the assessee bearing ITA No.2657/Mum/2026 is allowed for statistical purposes. Order pronounced in the open court on 31st day of July 2026. Sd/- Sd/- (BIJAYANANDA PRUSETH) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,िदनांक/Dated: 31/07/2026 Soumili, PS Copy of the Order forwarded to: 1. अपीलाथ�/The Appellant , 2. �ितवादी/ The Respondent. 3. आयकरआयु� CIT 4. िवभागीय�ितिनिध, आय.अपी.अिध., मुंबई/DR, ITAT, Mumbai 5. गाड�फाइल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, MUMBAI

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