SANJANA GUPTA,AHMEDABAD vs. THE DCIT, CENTRAL CIRCLE-2(2), AHMEDABAD

The grounds of appeal raised by the assessee read as under: 2. “A. As regards to demand on account of deemed dividend of Rs. 16,60,000/- - On the facts and in the circumstances of the case and in law the Learned ‘Commissioner of Income-tax (Appeals)’ erred in keeping the addition of Rs. 16,60,000/- on account of Deemed dividend. - The applicant had submitted all the necessary explanation and documentation which has not been taken into account to prove the genuineness of the transaction. - The assessment order is contrary to the principals of natural justice and hence invalid; - The Applicant would like to provide the affidavit from the companies declaring that the assessment if any would be the responsibility on there end and it would be there endeavor at there end to provide full justification of the loan transaction undertaken. The Appellant craves liberty to add, amend, alter, vary, modify and delete any of the grounds of appeal on or before its hearing. The appellant also craves liberty to make request for grant of permission for submission of additional evidences, documents, details, explanation etc. as and when the same is necessary for due justice to the assessee.”

Aggrieved by the assessment order the assessee filed before the CIT(A). The CIT(A) dismiss the appeal of the assessee.

The Ld. A.R. submitted that the assessee was not conversant with the income tax laws and it appears that the Chartered Accountant and Authorized Representative did not take reasonable care to ensure that the aforementioned advance of Rs. 16,66,000/- was made by Orient Spa Ltd. to Gujarat Syscom Technologies Pvt. Ltd. (‘GSTPL’) during the F.Y. 2009-10 and not the Financial Year 2010-11. Therefore, the addition of Rs. 16,66,000/- for the relevant A.Y. 2011-12 is not warranted in this instance. The Ld. A.R. submitted that the audited books of account of Orient Spa Ltd. has made this fact clear. The assessee has produce additional evidence before the Tribunal consisting of audited annual accounts of Orient Spa Ltd. alongwith its groupings besides the confirmation of account by Gujarat Syscom Technologies Pvt. Ltd. in form of a Paper Book too. The annual audited accounts of Orient Spa Ltd are being ‘public documents’ within the meaning of Section 74 of the Indian Evidence Act and made as additional evidence. The Ld. A.R. also pointed out that the Income Tax Department has seized copied of the annual accounts and other documents of the Orient Spa Ltd. during the course of extensive searches carried out at the premises of “Neesa Group” on 08.09.2010. Therefore, the Ld. A.R. submitted that the addition made by the Assessing Officer is not warranted for.

The Ld. D.R. submitted that the assessee was given proper opportunity for filing the evidences which the assessee was not aware.

Heard both the parties, and perused the relevant material available on record. It is evident that the assessment order is simply based on the submission of the assessee and no evidence was filed by the assessee during the assessment proceedings. Before the CIT(A) also the assessee could not file the evidences which are crucial to the addition as the documents related to Orient Spa Ltd. were seized by the Income Tax Department. Therefore, it will be appropriate to admit the additional evidences and remit back the issue on merit to the file of the Assessing Officer for proper adjudication of the evidences and the submissions of the assessee. Needless to say, the assessee be given opportunity of hearing by following principle of natural justice.

In the result, the appeal of the assessee is partly allowed for statistical purposes. This Order pronounced in Open Court on 30/11/2022