VERSATILE VINIMAY PVT. LTD.,DELHI vs. ITO, WARD- 26(2), NEW DELHI

ORDER PER BHAVNESH SAINI, JUDICIAL MEMBER: This appeal by Assessee has been directed against the order of Ld. CIT (Appeals)-6, Kolkata {CIT(A)} dated 31.10.2016 for Assessment Year: 2008-09, challenging the addition of Rs.8,58,00,000/- u/s 68 of the I.T. Act.

The assessee derives income from commission, loans & advances and investment in shares. The AO found that assessee had debited preliminary expenses written off due to raising of share capital, which is inadmissible as per provisions of Section 35D of the I.T. Act, which has escaped assessment. The AO therefore, issued notice u/s 148 and subsequently passed order u/s 147/143(3) on 30.04.2010 determining the total income at Rs.19,220/-. The Ld. CIT initiated the proceedings u/s 263 of the I.T.

Act and set aside the re-assessment order with a direction to do the assessment afresh. The AO issued notices to the assessee to explain raising of share capital and in the absence of any explanation/documents, AO made the addition of Rs. 8.58 Crores u/s. 68 of the I.T. Act.

The assessee, in the aforesaid application has mentioned that AO passed the ex-parte assessment order and Ld. CIT(A) also decided the appeal in absence of the assessee because the assessee shifted to Delhi, and he was accordingly assessed at Delhi. Therefore, no notice have been served upon the assessee, which resulted into both the ex-parte orders. It is also stated that since both the orders have been passed ex-parte therefore, assessee could not produce any documents to prove the identity of the investors their creditworthiness and genuineness of the transactions. Non appearance before the authorities below was beyond the control of assessee. The assessee along with application for admission of additional evidences filed the additional evidences which consists of ITR acknowledgment, application form for issue of equity share, ledger account, confirmation, Board Resolution, audited balance sheet, bank statement of all the investors which are 21 in number. It is therefore, prayed that on perusal of these additional evidences assessee will be able to prove the three ingredients of Section 68 of I.T.Act, therefore, same may be admitted as additional evidences. The Ld. Counsel for the assessee, therefore, submitted that matter may be remanded to the CIT(A) for fresh adjudication of the issue.

Further the assessee was prevented by the sufficient cause in not producing these evidences before the authorities below. We, accordingly, admit the additional evidences for disposal of the appeal. Since, the authorities below have no occasion to examine the additional evidences, therefore, matter requires re-consideration at level of the Ld. CIT(A).

Further no opportunities have been given to the assessee to defend the appeal before the CIT(A). We therefore, set aside the order of Ld. CIT(A) and restore the appeal of assessee to his file with a direction to re-decide the appeal of the assessee in accordance with law, by giving reasonable and sufficient opportunities of being heard to the assessee and to the AO.

Assessee is directed to file one set off additional evidences so admitted above before the Ld. CIT(A) for disposal of the appeal. The ld. CIT(A) shall take into consideration the additional evidences filed before him at the time of deciding appeal of assessee.

Order pronounced in the Open Court on 26/02/2020.