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Income Tax Appellate Tribunal, ‘A’ BENCH, BENGALURU
Before: SHRI B.R. BASKARAN & SHRI PAVAN KUMAR GADALE
The revenue has filed the appeal against the order of the CIT(A), Bengaluru-6, Bengaluru, passed u/s 143(3) and 250 of the Income-tax Act,1961 ['the Act' for short].
The revenue has raised the following grounds of appeal:
Page 2 of 6 1. The order of the CIT(Appeals) is opposed to law and the facts and circumstances of the case.
2. On the facts and circumstances of the case, whether the Ld. CIT(A) was right in passing the order without providing an opportunity to the AO to examine the additional evidence submitted by the assessee as per the provisions of rule 46A of IT Rules.
3. For these and such other grounds that may be urged at the time of hearing, it is humbly prayed that the order of the CIT(A), in so far as it relates to the above grounds may be reversed and that of the Assessing Officer be restored.
The appellant craves leave to add, to alter, to amend or delete any of the grounds that may be urged at the time of hearing of the appeal.
Brief facts of the case are that the assessee is a partnership firm engaged in real estate business and filed the Return of income on 1/10/2013 disclosing total income of Rs.31,01,250/-. Subsequently the case was selected for scrutiny under CASS and notice under section 143(2) and 142(1) were issued. In compliance, the AR of the assessee appeared on various dates and furnished books of account and details of expenses as called for. The assessing officer, based on the information in AIR found that the assessee has introduced capital of Rs.1 crore into business and source for capital introduction was called to explain. But in spite of providing many opportunities the assessee was unable to produce any proof and Page 3 of 6 documents/evidence in respect of the transactions.
Hence, the assessing officer, applied the provisions of section 69 of the Act and made addition as unexplained investments and determined the total income of Rs.1,31,01,250/- under section 143(3) of the Act.
4. Aggrieved by the order, the assessee has filed an appeal with CIT(A). In the appellate proceedings the CIT(A) considered the grounds of appeal and findings of the assessing officer and the submissions and the material filed by the assessee confirming the source of Rs.1 crore credited to capital account and bank statements and whereas the CIT(A) relied on the information and deleted the addition and allowed the appeal of the assessee.
Aggrieved by the CIT(A) order the revenue has filed appeal before The Tribunal.
The learned DR submitted that the CIT(A) has erred in in admitting additional evidence without providing opportunity to the assessing officer to examine the evidences filed in the course of appellate proceedings and in violation of rule 46A of the IT rules. Further referred to Page 4 of 6 the observations of the CIT(A) in the order where information was submitted and prayed for allowing the appeal of the revenue. Contra, the learned AR supported the orders of the CIT(A).
We heard the rival submissions and perused material on record. The only disputed issue is with respect to be violation of rule 46A of the IT Rules, where the assessee has submitted the details which were not filed before the AO in the course of assessment proceedings. The learned DR’s contention that the assessee has submitted information and bank statements before the CIT(A) and in particular at para.9, where the assessee has filed details of Rs.1 crore received from the State Bank of Mysore and also copy of the assessee’s bank statements with State Bank of India. The learned departmental representative’s contentions that the information was not filed in the assessment proceedings and referred to the observations of the AO at para.3 of the assessment order. Whereas the learned AR submitted that the information was filed in the course of first appellate proceedings before the CIT(A). We have perused the order of the assessing officer where it
Page 5 of 6 was observed that the assessee is unable to produce any proof or document evidencing the transaction of introduction of capital of Rs.1 crore into the business.
Before us, these facts could not be controverted by the learned AR of the assessee and further on perusal of the order of the CIT(A), the appellate authority has granted relief based on the bank statements and the confirmation of Rs.1 crore from State Bank of Mysore. Prima facie, we found the learned DR’s submission are that the AO was deprived to verify and examine the evidences filed in the course of appellate proceedings. Accordingly, to meet the ends of justice and the principles of natural justice, we are of the substantive opinion that the disputed issue has to be verified and examined by the AO. Accordingly, we restore the entire disputed issue to the file of the assessing officer to examine the evidence filed by the assessee and assessee shall be provided the opportunity of hearing and shall co-operate in submitting the information, explanation and we order accordingly.
Page 6 of 6 7. In the result, the appeal filed by the revenue is allowed for statistical purposes.
Order pronounced in the open court on 15th May, 2019.