DCIT CIR 3(3), MUMBAI vs. SUNSHINE OLEOCHEM LTD, MUMBAI

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ITA 3729/MUM/2012Status: DisposedITAT Mumbai30 May 2018AY 2008-094 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) erred by admitting fresh evidence without giving the AO an opportunity to examine it, violating Rule 46A. The matter was restored to the AO for a de novo assessment.

What were the facts?

The Assessing Officer (AO) added Rs. 77,30,070/- as short-term capital gains on the sale of land, as the assessee did not provide details. The assessee submitted fresh evidence before the CIT(A), who deleted the addition.

What were the issues?

Whether the CIT(A) can admit fresh evidence without providing the AO an opportunity to examine it, and if so, whether the assessment should be de novo.

Which sections of the Income-tax Act were involved?

Section 143(3)

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Income Tax Appellate Tribunal, MUMBAI BENCH “E” MUMBAI

Before: SHRI JOGINDER SINGH & SHRI N.K. PRADHAN

For Appellant: Mr. Rajiv Khandewal, AR
For Respondent: Mr. V. Justin, DR, Mr. Rajiv Khandewal, AR
Hearing: 22/05/2018Pronounced: 30/05/2018

ORDER

PER N.K. PRADHAN, AM

1.

This is an appeal filed by the Revenue. The relevant assessment year is 2008-09. The appeal is directed against the order of the Commissioner of Income Tax (Appeals)-7, Mumbai [in short ‘CIT(A)’] and arises out of the assessment completed u/s 143(3) of the Income Tax Act 1961, (the ‘Act’).

2.

The grounds of appeal

filed by the Revenue read as under:

1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs.77,30,070/- made under the head “Short Term M/s Sunshine Oleochem Capital Gain” on sale of land by admitting fresh evidences furnished by the assessee during the course of Appellate Proceedings in contravention of Rule 46A of the I.T. Rules, 1962, without providing any opportunity to the AO.

2. The appellant prays that the order of the CIT(A) on the above ground be set aside and that of the Assessing Officer be restored.

3. Briefly stated, the facts of the case are that the assessee-company filed its return of income for the assessment year (AY) 2008-09 on 29.09.2008 declaring current year’s loss of Rs.3,78,99,506/-. During the course of assessment proceedings, the Assessing Officer (AO) noticed that the assessee failed to furnish details of capital gains on sale of freehold land. In Schedule 5 (Fixed Assets) of balance sheet, the assessee had shown freehold land valued at Rs.2,76,65,593/- as on 01.04.2007. There was an addition and deletion to freehold land for Rs.5,22,810/- and Rs.77,30,070/- respectively. Therefore, the AO came to a finding that the assessee had sold out immovable property for Rs.77,30,070/- during the year on which no capital gain was offered. The AO further noted that in connection with sale of freehold land, the assessee did not disclose the working of capital gain at the time of computing total income. In absence of the details of purchase of land and copies of agreement for purchase and sale of land, the AO brought to tax the amount of Rs.77,30,070/- as short term capital gains.

4. Aggrieved by the order of the AO, the assessee filed an appeal before the Ld. CIT(A). During the course of appellate proceedings before the Ld. CIT(A) the assessee filed details of purchase and sale of land. After going through the submission of the assessee and the details filed,

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