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Income Tax Appellate Tribunal, MUMBAI BENCHES “SMC”, MUMBAI
Before: SHRI SHAMIM YAHYA (AM) & SHRI RAM LAL NEGI (JM)
O R D E R
PER RAM LAL NEGI, JM
This appeal has been filed by the assessee against the order dated 22.01.2018 passed by the Commissioner of Income Tax (Appeals) (for short ‘the CIT (A)’)-2, Thane, for the assessment year 2008-09, whereby the Ld. CIT (A) has dismissed the appeal filed by the assessee against assessment order passed u/s 143 (3) read with section 147 of the Income Tax Act, 1961 (for short ‘the Act’).
Brief facts of the case are that the assessee is a sub-broker of commodity exchange broker M/s Shilpa Stock Brokers Pvt. Ltd. Since, the assessee had not file the return of income for the assessment year under consideration, AO issued notice u/s 148 of the Act. In response to the said notice, the assessee filed return declaring the total income of Rs. 6,40,070/- showing the gross Assessment Year: 2008-09 profit of Rs. 40,20,412/- and net profit of Rs. 6,03,212/- computing the income u/s 44-AD of the Act. However, books of account were not presented during the assessment proceedings. Vide order sheet the assessee was asked to justify the claim of expenses with documentary evidence. The assessee submitted the bank summary and brokers ledger to prove the expenses incurred through bank. On the basis of which the AO computed the total income of the assessee at Rs. 32,95,419/- by allowing expenses to the extent of Rs. 7,98,477/-.
The assessee challenged the assessment order before the Ld. CIT(A). The Ld. CIT(A) after hearing the assessee dismissed the appeal of the assessee and upheld the assessment order. The assessee is in appeal against the impugned order passed by the Ld. CIT(A).
The assessee has challenged the impugned order on the following effective grounds:- “Ground No. 1. 1. On the facts and the circumstances of the case and in law, the Income Tax Officer, Ward 3(3), Thane(‘the AO’) erred in passing assessment order u/s 143 (30 r.w.s. 147, without issuing a notice u/s 143 (2) of the Income Tax Act, 1961 (‘the Act’) before proceeding with assessment u/s 147 of the Act. 2. The Appellant prays that the order be considered illegal, void and bad in law and be quashed. Ground No. 2. 1. On the facts and the circumstances of the case and in law, the AO erred in completing the assessment proceeding without directing the appellant to get her books of accounts audited u/s 44AB of the Act as defined by an accountant u/s 288(2) of the Act in respect of the aforesaid assessment year. 2. The Appellant humbly prays that she may be allowed to present the audited books of accounts as additional evidence. Assessment Year: 2008-09
3. Ground No. 3 1. On the facts and circumstances of the case and in law, the Hon’ble Commissioner of Income Tax (Appeals)-2, Thane [ ‘the CIT (A)] erred in upholding the additions made by the AO amounting to Rs. 26,19,723/- on the alleged ground that funds used for the advancing loans, capital contribution in partnership firm & purchasing of house property and other assets were made out of the gross receipts amounting to Rs. 40,21,412/-. 2. The CIT (A) further erred in not considering the validity of expenses incurred to earn the gross receipts amounting to Rs. 40,21,412/- while adjudicating the aforesaid ground. 3. The Appellant therefore prays that the AO be directed to delete the aforesaid additions amounting to Rs. 26,19,723/-. Ground No. 4. 1. On the facts and circumstances of the case and in law, the Hon’ble CIT (A) erred in upholding the action of the AO in disallowing the claim of the loss incurred by her during the course of her husband amounting to Rs. 6,51,321/- either as a trade loss or bad debts. 2. The appellant prays that AO be directed to allow loss amounting to Rs. 6,51,321/- as claimed. Ground No. 5. 1. On the facts and circumstances of the case and in law, the AO erred in restricting claim of the appellant amounting to Rs. 79,369/- instead of Rs. 1,15,000/- as deduction under chapter VI A u/s 80C & 80D of the Act, without asking appellant to submit requisite details in respect of the such claims. 2. Thus, the Appellant prays that deduction claimed amounting to Rs. 1,15,000/- under chapter VI A u/s 80C & 80D of the Ace be allowed.” Assessment Year: 2008-09
Before us, the Ld. counsel for the assessee submitted that the assessee could not furnish the audit report u/s 44AD of the Act, audited financial statements comprising of capital account, profit and loss account and balance sheet for the financial year 2007-08 relevant to the A.Y. 2008-09, copy of statement of Vijaya Bank for the period Feb. 2007 to Nov. 2007 and statements reflecting housing loan amount existing as on 31.03.2008, before the authorities below as some of the documents were misplaced during the shifting of documents from Rajasthan to Mumbai. The Ld. counsel further submitted that since the aforesaid documents are available with the assessee, the same may be admitted as additional evidence in the interest of justice.
On the other hand, the Ld. Departmental Representative (DR) opposed the request and submitted that since the assessee has failed to submit the aforesaid documents before the authorities below despite availing several opportunities, this ground of appeal
is liable to be dismissed.
7. We have heard the rival submissions and also gone through the orders passed by the authorities below. It is apparent from the record that the documents produced by the assessee before us for admitting as additional evidence were not examined by the authorities below and the AO has passed the assessment order on the basis of material available on record. The Ld. counsel further submitted that the documents could not be produced during the assessment proceedings or during the first appellate proceedings due to the circumstances beyond control as some of the documents were misplaced during the shifting of business from Rajasthan to Mumbai. The Ld. CIT (A) has upheld the assessment order passed by the AO without verifying the books of account of the assessee. Under these circumstances, we are of the considered view that the additional evidence requires examination by the AO in the interest of justice. We therefore, allow application for additional evidence and admit the additional evidence in the interest of justice. Accordingly, we set Assessment Year: 2008-09 aside the impugned order passed by the Ld. CIT (A) without going into the merits of the appeal of the assessee and remit the appeal back to the AO for passing assessment order afresh after considering the additional evidence adduced by the assessee and giving the assessee opportunity of being heard.
In the result, appeal filed by the assessee for assessment year 2008- 2009 is allowed for statistical purposes.