TEKSONS P. LTD,THANE vs. DCIT 5(3), MUMBAI

Though the assessee had raised various grounds before us, the preliminary ground raised is that there is a violation of principles of natural justice committed by the ld. CIT(A) while dismissing the appeal of the assessee. As this aspect goes to the root of the matter, we deem it fit and appropriate to address the same first.

We have heard the rival submissions and perused the materials available on record. We find that the assessee company is engaged in the business of manufacturing of industrial radiators. The return of income for the Asst Year 2010-11 was filed by the assessee on 12.10.2010 declaring total income of Rs.4,87,49,360/- under normal provisions of the Act and Rs. 3,64,96,383/- as book profits u/s 115JB of the Act. The assessment was completed u/s 143(3) of the Act on 6.3.2013 determining total income of Rs. 11,04,32,408/- under normal provisions of the Act and book profits of Rs. 11,66,77,218/- u/s 115JB of the Act after making the following additions/disallowances :- a) Disallowance u/s 14A of the Act – Rs 5,49,353/- b) Dividend from Cooling Systems Flexible Pte Ltd – Rs 4,27,21,681/- c) Difference in AIR reconciliation – Rs 1,84,385/- d) Disallowance u/s 40(a)(ia) of the Act – Rs 1,30,54,298/- e) Foreign Exchange Fluctuation Loss – Rs 17,19,494/- f) Disallowance u/s 43B of the Act – Rs 34,53,837/- g) Disallowance of Brought Forward Losses or Depreciation for computation of book profit u/s 115JB of the Act – Rs 3,44,90,347/-

During the course of appellate proceedings, the assessee furnished various additional evidences which were duly forwarded to the ld. AO by the ld. CIT(A) for seeking a remand report. The mere fact that the remand report is called for from the ld. AO proves that the additional evidences were initially admitted by the ld. CIT(A) and forwarded to the ld. AO in terms of Rule 46A of the Income Tax Rules and remand report called thereon. We find that the ld. AO in the remand report had recommended the admission of the various additional evidences filed by the assessee. This fact is even recorded by the ld. CIT(A) in para 7.3.4. page 10 of his order. Despite the recommendation of the ld. AO and despite his initial admission of additional evidences which is evident from the fact that a remand report is called for from the ld. AO, the ld. CIT(A) merely brushed aside all the additional evidences and held that those additional evidences cannot be admitted. We find that the assessee had submitted that the evidences were gathered subsequent to completion of assessment proceedings and hence could not be furnished earlier. This crucial fact has been overlooked by the ld. CIT(A) in the instant case. Accordingly, we hold that the ld. CIT(A) committed gross violation of principles of natural justice in the instant case. Since the additional evidences filed by the assessee need to be addressed by the ld. AO , we find that in the interest of fair adjudication of the issues in dispute, the entire appeal deserves to be remanded back to the file of ld. AO for denovo adjudication and the ld. AO is directed to frame the assessment afresh qua the issues in dispute before us, in the light of evidences submitted by the assessee. Accordingly, the entire grounds raised by the assessee are set aside to the file of ld. AO for denovo adjudication and allowed for statistical purposes.

In the result, the appeal of the assessee is allowed for statistical purposes.