Loading judgment…
Facts
The assessee appealed against the order of the CIT(A) which confirmed an addition of Rs. 48,16,500/-. The assessee contended that the CIT(A) relied on documents and transactions pertaining to a third party, Mr. Ramzan Kokani, which were not related to the assessee's case.
Held
The Tribunal held that the CIT(A)'s decision was based on assumptions from a third party's proceedings and not a specific appreciation of the assessee's case. The CIT(A) failed to independently evaluate the assessee's submissions.
Key Issues
Whether the CIT(A) erred in confirming the addition by relying on documents and transactions of a third party, without proper appreciation of the assessee's case and submissions.
Sections Cited
250, 69A, 1961
AI-generated summary — verify with the full judgment below
Order PER LALIET KUMAR, J.M: This appeal by the assessee is directed against the order dated 24.05.2024 passed by the Ld. CIT(A), NFAC, Delhi, under Section 250 of the Income-tax Act, 1961, for the assessment year 2017–18.
In the present appeal the sole grievance of the assessee is that the Ld. CIT(A) has erred in confirming the addition of Rs.48,16,500/- under Section 69A of the Act without properly appreciating the facts and submissions specific to the assessee's case. It was submitted that the order suffers from factual inaccuracies and reliance on irrelevant materials pertaining to a third party.
The Ld. AR submitted that the Ld. CIT(A) has based his decision on certain seized documents and transactions connected with one Mr. Ramzan Kokani, whose dealings are not related to the assessee. It was pointed out that the CIT(A), while confirming the addition, has wrongly held that the name of the appellant appears in the seized documents and that loan entries in the name of Mr. Ramzan Kokani appear in the assessee's books of accounts. These findings, it was submitted, are factually incorrect and pertain to a third party.
3.1 It was contended that the CIT(A) has proceeded to decide the appeal by relying upon assumptions and facts of an unrelated case, without dealing with the assessee’s specific explanations and without proper appreciation of the documents on record. As such, the appellate order suffers from serious irregularities and cannot be sustained in law.
The Ld. DR, however, supported the orders of the lower authorities.
We have considered the rival submissions and perused the material on record. On going through the impugned order of the Ld. CIT(A), it is evident that the decision has been largely influenced by references to seized documents and observations relating to Mr. Ramzan Kokani, a third party. The CIT(A) has recorded that the name of the appellant appeared in the seized documents and that loan entries pertaining to Mr. Ramzan Kokani were found in the assessee’s books. However, no such material appears to have been independently verified or established with reference to the assessee's books or conduct.
5.1 In our considered view, the findings of the CIT(A) are based on assumptions drawn from proceedings concerning a third party, and not based on a specific factual appreciation of the assessee’s case. The CIT(A) has failed to independently evaluate the assessee's submissions and has merely proceeded to affirm the addition based on generalized observations and borrowed findings, which is not permissible under law.
5.2 In view of the above, we find that the impugned order of the Ld. CIT(A) is not sustainable and deserves to be set aside. We, accordingly, remit the matter back to the file of the Assessing Officer for denovo adjudication. The AO shall verify all relevant facts, documents, and submissions of the assessee independently and dispose of the matter after affording due opportunity of being heard.
5.3 We clarify that this remand is being made without expressing any opinion on the merits of the case, and all contentions are left open to be decided afresh.
In the result, the appeal of the assessee is allowed for statistical purposes.