DCIT, NEW DELHI vs. M/S. TRIVENI MOTORS, NEW DELHI

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ITA 6429/DEL/2014Status: DisposedITAT Delhi19 November 2018AY 2008-095 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) erred by admitting additional evidence without providing the Assessing Officer an opportunity to examine and comment on it. The matter was restored to the CIT(A) for re-adjudication.

What were the facts?

The Revenue appealed against the CIT(A)'s deletion of additions made by the AO. The assessee failed to provide evidence for expenses and the source of a large cash deposit. The CIT(A) admitted additional evidence without giving the AO an opportunity to examine it.

What were the issues?

Whether the CIT(A) correctly admitted additional evidence without providing the AO an opportunity to examine it, and whether the assessee provided sufficient evidence for expenses and cash deposits.

Which sections of the Income-tax Act were involved?

Section 153A,Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘D’ NEW DELHI

Before: SHRI G.D. AGRAWAL & SHRI SUDHANSHU SRIVASTAVA

For Respondent: Shri Vijay Varma, CIT DR
Hearing: 21.08.2018Pronounced: 19.11.2018

order of the Ld. Commissioner of Income Tax (A)-III, New Delhi for assessment year 2008-09 on the following grounds of appeal:-

“1. On facts and in the circumstances of the case, the CIT(A) has erred in deleting the addition of Rs.1,67,370/- (being 10% of direct expenses) despite the fact that the assessee failed to submit any evidence either before the AO or even before the CIT (A) to substantiate these expenses to be genuine.”

Assessment year 2008-09 2. On facts and in the circumstances of the case, the CIT(A) has erred in deleting the addition of Rs. 56,44,331/- ((being 50% of administrative and selling charges) despite the fact that the assessee failed to submit any evidence either before the AO or even before the CIT(A) to substantiate these expenses to be genuine.

3.

On facts and in the circumstances of the case, the CIT (A) has erred in deleting the addition of Rs. 6,00,01,000/- without giving any opportunity to the AO.

4.

On facts and in the circumstances of the case, the CIT(A) has erred in accepting the assessee’s unsupported contention about the source of deposit of Rs.6,00,01,000/- without granting opportunity to the Assessing Officer and without any evidence about the alleged and deal with group concern.

5.

The order of the CIT (A) is erroneous and is not tenable on facts and in law.

6.

The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal.” 2.0 None was present on behalf of the assessee/respondent when the appeal was called out for hearing and a perusal of the order sheet entries shows that this appeal was fixed for the first time on 31.10.2017. Thereafter, it was fixed for hearing on 1.2.2018 and then again on 9.5.2018. The assessee/respondent was not represented on any of the occasions and even today none was present for the assessee/respondent when the appeal was called out for hearing and no adjournment application was also Assessment year 2008-09 received on behalf of the assessee/respondent. Accordingly, it is apparent that the respondent/assessee does not wish to avail of the opportunity of hearing and, therefore, we deem it expedient to hear the appeal ex parte qua the assessee/respondent.

3.0 At the outset, the Ld. CIT DR drew our attention to the orders of the authorities below and submitted that there was a search of case of the assessee on 28.9.2010 and the notice u/s 153A of the Income Tax Act, 1961 (hereinafter referred to as "the Act") was issued on 7.2.2012 but the assessee chose to file the return only on 8.1.2013 i.e. just a few months before the expiry of the limitation period. It was further submitted that even during the assessment proceedings, the assessee did not file complete details of expenditure so as to enable the Assessing Officer to examine the allowability of the same. It was also submitted that source of cash deposit in the bank accounts was also not explained leading to addition u/s 68 of the Act. The Ld. CIT DR also referred to the order of the Ld. CIT (A) and submitted that the Ld. CIT (A) had admitted additional evidence and reconciliation filed by the assessee giving the Assessing Officer any opportunity to examine the additional evidence. It was prayed that since the mandate, as laid down in Rule 46A of the Income Tax Rules, 3 Assessment year 2008-09 1962, was not followed, the department’s appeal deserved to be allowed.

4.0 Having heard the Ld. CIT DR and after having perused the material on record as well as the impugned order, we find that the averment of the Ld. CIT DR is correct inasmuch as the Ld. CIT (A) admitted additional evidence but did not call for a remand report from the Assessing Officer nor gave the Assessing Officer any opportunity to examine the evidence which were furnished before him by the assessee for the first time. This should not have been done and the Ld. CIT (A) should have followed the provisions of Rule 46A in this regard. Accordingly, in light of the factual matrix, we restore the file to the office of the Ld. CIT (A) with the direction to re-adjudicate the grounds raised before him after giving opportunity to the Assessing Officer to examine and comment on the additional evidences which have been earlier admitted by him and also after giving due opportunity to the assessee to rebut the observations of the AO.

5.0 In the result, the appeal of the revenue stands allowed for statistical purposes.

Assessment year 2008-09 Order pronounced in the open court on 19th November, 2018.

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