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Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI KULDIP SINGH
Per : Kuldip Singh, Judicial Member:
The appellant, M/s Maredian Realtors Pvt. Ltd. (hereinafter referred to as ‘the assessee’) by filing the present appeal, sought to set aside the impugned order dated 28.03.2019 passed by Commissioner of Income Tax (Appeals)-17, Mumbai [hereinafter referred to as “CIT(A)”] qua the assessment year 2012-13 on the grounds inter alia that :- “1 A. In the facts and circumstances of the case and in law, the Learned CIT(Appeal) erred in confirming the addition of Rs.43,11,000/- towards share application money received by the appellant not appreciating the fact that the appellant has submitted confirmation from parties, copies of Bank statement
(A.Y.2012-13) 2 M/s. Maredian Realtors Pvt. Ltd. and copy of TTR-V, ROC Papers and that the shares have been allotted to the parties. B. The appellant therefore submits that the identity, genuineness and source of transaction being proved the addition of Rs.43,11,000/-needs to be deleted. 2 A. The learned CIT(Appeal) erred in enhancing the assessment on the basis of observation made by the AO in his remand report for treating the registration charges of motor car Rs.15,29,235/ as capital in nature which was claimed as revenue and allowed in the Assessment u/s 143(3). B. The appellant submits that the registration charges being revenue in nature the same should be fully allowed.
The appellant craves leave to add, alter or amend any grounds of appeal at the time of hearing.”
2. Briefly stated the facts necessary for adjudication of the issues at hand are: Assessee as builder and developer, filed the return of income for the year under consideration at the total income of Rs.17,22,835/- which was subjected to scrutiny. Assessing Officer (AO) noticed that the assessee company has shown share application money to the tune of Rs.43,11,000/- having received from five entities/persons. AO after declining the contentions raised by the assesse proceeded to hold that despite numerous opportunities assessee could not file any share application form, resolutions or any other supporting evidence and that the shares are not allotted subsequently also. AO made addition of Rs.43,11,000/- claimed to have been received by the assesse as unexplained cash credit u/s 68 of the Act and thereby framed the assessment u/s 143 (3) of the Income Tax Act,1961 (hereinafter referred to as “the Act”).
3. Assessee carried the matter before learned CIT(A) by way of filing appeal who is confirmed the addition by dismissing the appeal. Feeling aggrieved from the impugned order passed by learned CIT(A) assessee has come up before the Tribunal by way of filing present appeal. 4. I have heard the learned Authorised Representatives (ARs) of the parties to the appeal, perused the material available on record and orders
(A.Y.2012-13) 3 M/s. Maredian Realtors Pvt. Ltd. passed by the learned Lower Authorities in the light of the law applicable thereto.
At the very outset, it is brought to the notice of the Bench by the learned AR for the assessee that during the course of appellate proceedings, assessee moved an application for additional evidence. Learned CIT(A) has given an opportunity to the AO under Rule 46(A). AO submitted the remand report and pleaded that additional evidence claimed by the assessee deserves to be rejected as the assessee company has been unable to prove nature and genuineness of the transaction of the major share applicants.
Bare perusal of the impugned order passed by learned CIT(A) goes to prove that the order has been passed mechanically merely on the basis of remand report filed by the AO “that additional evidence sought to bring on record by the assessee needs to be rejected.” I fail to appreciate the findings returned by learned CIT(A) that as to how the additional evidence which the assessee could not file before the AO cannot be entertained.
Assessee sought to prove identity genuineness and creditworthiness by way of filing copy of Income Tax Returns, copy of PAN, copy of Bank Statement etc. No doubt during remand proceedings assessee could not produce major parties concerning share application money but the documents sought to be brought on record by the assessee can otherwise be considered on merit by entertaining as additional evidence. The entire enquiry in this case, at the level of AO as well as learned CIT(A) is a botched up enquiry and does not lead to any logical conclusion.
One more fact had come on record from para 4.7 that by way of remand report AO sought to enhance the income of the Assessee by learned CIT(A) on account of registration charges on motor car being capital in nature. Surprisingly, the learned CIT(A) enhanced the income of the assessee at the mere asking of AO, without applying his mind and without issuing any notice
(A.Y.2012-13) 4 M/s. Maredian Realtors Pvt. Ltd. to the assessee. Since, the entire order passed by learned CIT(A) is cryptic and mechanical in nature it fails to withstand the judicial scrutiny. I am of the considered view that evidence which the assessee sought to be brought on record by way of additional evidence is a necessary piece of evidence which goes to the root of the case hence required to be entertained. So, it is ordered that additional evidence sought to be brought on record by the assessee is allowed.
Since all the additional evidence sought to be brought on record by the assessee is required to be examined at length by the Filed Officer, it would be in the interest of justice to set aside this case to the AO to decide afresh after entertaining the additional evidence by providing opportunity of being heard to the assessee.
Resultantly, appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the open court on 24.11.2022.