Loading judgment…
Facts
The assessee's appeal pertains to the AY 2011-12, arising from an order of the CIT(A) which upheld the assessment order. The AO had made disallowances on account of project expenses, miscellaneous balance write-off, interest/rebate/delay charges, and disallowance u/s 40(a)(ia) of the Act.
Held
The Tribunal found that the CIT(A) erred in not admitting additional evidence filed by the assessee, which was relevant for adjudication. The AO's report, solely based on the opportunities given during assessment, was not sufficient reason to deny admission.
Key Issues
Whether the CIT(A) was justified in denying the admission of additional evidences filed by the assessee during appeal proceedings?
Sections Cited
143(3), 40(a)(ia), 46A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “E”: NEW DELHI
Before: SHRI KUL BHARAT & SHRI M. BALAGANESH
O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in AY 2011-12, arises out of the order of the ld CIT(A)-6, New Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] dated 23.04.2017 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 28.03.2014 by the ITO, Ward-13(2), New Delhi (hereinafter referred to as ‘ld. AO’).
At the outset, we find that the assessee had filed additional grounds stating that additional evidences filed by it before the ld CIT(A) were not admitted on the ground that sufficient opportunities were indeed given to the assessee by the ld AO during the course of assessment proceedings. The ld AO in the assessment order had made 100% disallowances of expenses on account of project washed
Niho Construction Ltd away of Rs. 4,54,97,000/-; on account of miscellaneous balance written off of Rs. 1,75,65,646/-; on account of interest/ rebate/ delay charges of Rs. 1,63,99,917/- and disallowance u/s 40(a)(ia) of the Act of Rs. 10,81,933/-. From the ordersheet entries of the assessment proceedings placed on record by the ld DR before us, we find that the assessee had in fact furnished the ledger account copies of the all these expenses together with various other expenses before the ld AO. Admittedly the assessee had not furnished the books of account before the ld AO despite being called for by the ld AO on several occasions. This behavior of the assessee had apparently driven the ld AO to make 100% disallowance of aforesaid four expenses. However, it is a fact that the ld AO had accepted the claim of the other expenses claimed by the assessee in the return of income, despite the fact that the books of account were not produced. Admittedly the disallowance of the aforesaid expenses were made for want of documentary evidences from the side of the assessee. These documentary evidences were admittedly filed by the assessee before the ld CIT(A) in the form of additional evidences in terms of Rule 46A of the Income Tax Rules. The ld CIT(A) even sought for remand report from the ld AO on these additional evidences. The ld AO gave his remand report by stating that the additional evidences should not be admitted by the ld CIT(A) in view of the fact that the sufficient opportunities were given to the assessee during the course of assessment proceedings. We find that the ld CIT(A) merely followed this remand report and proceeded to deny the admission of additional evidences filed by the assessee, without going into the fact as to whether these evidences are indeed relevant and necessary material for the adjudication of the issue in dispute before him. This action of the ld CIT(A), in our considered opinion, is not sustainable. In these facts and circumstances, we are inclined to admit the additional grounds raised by the assessee and direct the ld CIT(A) to admit all the additional evidences filed by the Page | 2
Niho Construction Ltd assessee in support of disallowance of aforesaid four items and decided the allowability of the same afresh, in accordance with law. The assessee is also given liberty to furnish further evidences, if any, in support of its contentions. Accordingly, grounds raised and additional grounds raised by the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on /01/2024.