EGBERTS INDIA PRIVATE LIMITED,CHENNAI vs. INCOME TAX OFFICER, CORPORATE WARD 2(3), CHENNAI

We find that this appeal was filed with a delay of 87 days. The assessee filed an affidavit accompanied by a petition explaining the reasons. On perusal of the same and upon hearing both the parties, we

At the outset, it is noted that the AO determined the assessee’s income at Rs. 21,31,16,511/- as against the returned income of Rs. 5,88,38,660/-, inter alia, making additions under Sections 68 and 69 of the Income-tax Act, 1961 (for short, “the Act”), vide order dated 25.03.2024 passed under Section 143(3) read with Section 144B of the Act.

On perusal of the assessment order, we note that the AO issued notices under Section 142(1) and show-cause notices requiring the assessee to furnish the relevant details. As evident from paragraph No. 9 at page No. 2 of the assessment order, the AO asked the assessee to furnish details of the purchase of time deposits during FY 2021–22 and to explain their nature and source, along with supporting documents. The AO similarly asked the assessee to furnish details regarding the increase in share capital. However, as appears from pages 4 and 5 of the assessment order, the AO proceeded to make additions of Rs. 5,42,87,785/- and Rs. 10,00,00,000/- on account of unexplained cash credit and unexplained investment, respectively, in the absence of material evidence supporting the assessee’s contentions. Further, on perusal of pages 14 to 16 of the impugned order, we note that the Ld. CIT(A) categorically held that there was no evidence supporting the contentions raised in the first appellate proceedings. Therefore, it is clear that the additions made by the AO were confirmed by the Ld. CIT(A) because the assessee had not submitted the required material evidence

The Ld. AR, Mr. Santhana Krishnan, CA, submitted that the additional evidence at pages 1 to 14 constitutes material necessary for the fair adjudication of the disputed issues and requested that the matter be remanded to the file of the AO for fresh consideration.

The Ld. DR, Ms. R. Anita, CIT, reported no objection.

After hearing both parties and in view of the discussion made hereinabove, we note that there was no evidence before the AO or the Ld. CIT(A) in support of the issues relating to the increase in share capital and the purchase of time deposits. On perusal of the paper book containing the additional evidence, we note that the assessee has filed acknowledgments of the returns of income for AYs 2021–22 and 2022– 23, bank statements for the period from 01.04.2021 to 31.03.2022, customer-wise statements of advances received from customers, including each customer’s PAN, and a communication dated 19.08.2024 conveying the addition of the case to the Local Committee on High- Pitched Scrutiny Assessments. We find merit in the Ld. AR’s submission that the aforesaid documentary evidence is necessary for the fair adjudication of the disputed issues. Therefore, we deem it proper to remand the matter to the file of the AO for fresh consideration. The assessee is at liberty to file any further evidence in support of its claims. Accordingly, the order of the Ld. CIT(A) is set aside, and the grounds raised by the assessee are allowed for statistical purposes.