ASST CIT 17(1), MUMBAI vs. HOTEL SUBA PLACE, MUMBAI

order dated 05/04/2016 of CIT(A)-28, Mumbai the Assessing Officer (AO) has filed the present appeal. Assessee-firm, engaged in the business of running hotels, filed its return of income on 30/09/2011,declaring total income of Rs.1.17 crores.The AO completed the assessment u/s. 143(3) of Act on 19/03/14 determining its income at Rs.5.97 crores. 2.Effective Ground of appeal (GOA 1 & 2) is about admitting additional evidences with regard to unexplained cash credits of Rs.39.57 lakhs (Rs.12.07 lakhs from BMW Financial Services India + Rs.27.50 lakhs from the partners).During the assessment proceedings,the AO found that the assessee had received loan of Rs.24.72 crores for one of the hotels.Out of the said amounts, he accepted Rs.20.43 crore as genuine loans.The balance loan of Rs.4.29 crores pertaining to 24 depositors was added as unexplained cash credit u/s. 68 of the Act, to the total income of the assessee. 3.Aggrieved by order of the AO the assessee preferred an appeal before the First Appellate Authority (FAA) and made detailed submissions. After considering the available material he deleted all the additions made u/s. 68 of the Act. However, while deleting the additions for credit of Rs.12.07 lakhs and Rs.27.50 lakhs received from BMW Financial Services India and the partners of the firm respectivel, he admitted additional evidences. 4.Before us, he Departmental Representative (DR) stated that the additional evidences were accepted in violation of Rule 46A of the Income tax Rules 1962 (Rules). The Authorised Representative (AR) could not controvert the submissions made by the DR.

4608/M/16 Hotel Suba Place There is no doubt that the FAA has powers to admit additional evidences,but same is governed by the provisions of Rule 46A.Sub Rule 3 of the Rule stipulated that the FAA will afford a reasonable opportunity to AO,if he admits new evidences during appellate proceed - ings.But,in the case under consideration,he has not followed the said procedure.Therefore, in the interest of justice we are remitting back the issue to the file of FAA. He is directed to afford a reasonable opportunity of hearing to the AO,with regard to additional evidences . Effective Ground of appeal is decided in favour of AO in part.