Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI N.K. PRADHAN
This is an appeal by the assessee against order dated 1st March 2016, passed by the learned Commissioner (Appeals)–24, Mumbai, for the assessment year 2011–12.
Brief facts are, the assessee a company is engaged in the business of import and export of iron ore. For the assessment year under dispute, originally assessee filed its return of income on 30th September 2011, declaring total income of ` 16,70,463. Subsequently, the assessee filed a revised return of income on 23rd May 2012. During
2 Pramaask Conglobe Pvt. Ltd. the assessment proceedings, the Assessing Officer noticing substantial increase in authorised as well as issued capital called upon the assessee to furnish necessary details along with the supporting evidence. On a perusal of the details submitted, the Assessing Officer found that shares were issued to two directors of the companies and both the directors have been allotted 4.95 lakh shares each. In this regard, it was submitted by the assessee that unsecured loan of one of the directors viz. Pravin Kumar, was transferred to share investment. The Assessing Officer not being convinced with the explanation of the assessee called upon it to explain the source of share capital introduced and to establish the identity, genuineness and creditworthiness of the persons who purportedly subscribed to share capital. Alleging that the assessee did not file necessary details the Assessing Officer being of the opinion that the assessee has failed to establish the genuineness of subscription to the share capital amounting to ` 99 lakh treated it as unexplained cash credit under section 68 of the Act and added back to the income of the assessee. Further, the Assessing Officer on verifying the Balance Sheet of the company found that an amount of ` 132,74,156 has been shown as a liability on account of client dispute. Alleging that the assessee failed to furnish the details called for the Assessing Officer added back an amount of ` 82,74,156, as unexplained cash credit under section 68 of the Act. In addition to the above, the Assessing Officer found a cash
3 Pramaask Conglobe Pvt. Ltd. deposit of ` 44,51,000 made during the year. Alleging that the assessee failed to furnish any supporting evidence regarding the source of cash deposit, the Assessing Officer added back the amount of ` 45,51,000, as unexplained cash credit under section 68 of the Act. Being aggrieved of the additions made, assessee preferred appeal before the learned Commissioner (Appeals).
The learned Commissioner (Appeals) after considering the submissions of the assessee, the learned Commissioner (Appeals) deleted the amount of ` 27,81,000 out of the additions made on account of subscription to share capital and client deposits while sustaining teh addition of cash deposits in its entirety. Being aggrieved of the aforesaid decision of the learned Commissioner (Appeals), the assessee filed the present appeal.
Apart from the grounds raised by the assessee on the merits of the additions made the assessee has raised the following additional grounds in the course of hearing.
“1. On the facts and in the circumstances of the case and in law, the learned Commissioner (Appeals) erred in holding that number of additional evidences such as HDFC Bank account, etc., which were not produced before the A.O. are not produced without application under rule 46A of I.T. Rules 1962, though on additional evidences were produced.
2. On the facts and in the circumstances of the case and in law, the learned Commissioner (Appeals) erred in not considering the evidences which were before assessing and which were filed
4 Pramaask Conglobe Pvt. Ltd. during the appellate proceedings and hence, the matter is required to be set aside to the office of Income Tax Officer to consider the evidences.”
Since, the issue raised in the additional grounds are on appreciation of evidences filed by the assessee and goes to the root of the matter, we are inclined to admit the additional grounds and propose to decide them at the very outset.
The learned Authorised Representative submitted that in the course of hearing of appeal, the assessee had submitted bank account copies to prove the source of the contribution made to share capital, client deposits and cash deposits. However, the learned Commissioner (Appeals) refused to look into the evidence on the reasoning that they were in the nature of additional evidence, hence, have to be filed in the manner prescribed under rule 46A of the I.T. Rules. The learned Authorised Representative submitted, the evidences submitted before the learned Commissioner (Appeals) were not in the nature of additional evidences but were produced before the Assessing Officer. He submitted, the learned Commissioner (Appeals) without properly appreciating the facts has rejected the evidences. He submitted, since, the evidences submitted by the assessee have a crucial bearing on the validity of the additions made by the Assessing Officer, they should be considered.
5 Pramaask Conglobe Pvt. Ltd. 7. The learned Departmental Representative, though, relied upon the observations of the learned Commissioner (Appeals), however, she submitted the matter can be restored to the first appellate authority for deciding the issue afresh after examining the evidences submitted by the assessee.
We have heard rival submissions and perused material available on record. Undisputedly, the impugned additions have been made by the Assessing Officer on the ground that the assessee failed to establish the source of the investments / deposits with supporting evidences. It is evident, in the course of proceedings before the first appellate authority, the assessee produced certain evidences to establish the source of the deposits. However, the learned Commissioner (Appeals) rejected the evidences produced by the assessee on the reasoning that they were not produced following the manner prescribed under rule 46A of the Rules. It is the specific pleading of the learned Authorised Representative before us that the evidence produced before the first appellate authority are not in the nature of additional evidence as they were produced before the Assessing Officer. Without entering into the controversy as to whether the evidences sought to be produced before the first appellate authority are in the nature of additional evidences or not we are of the view that if the assessee to establish the genuineness of the deposits
6 Pramaask Conglobe Pvt. Ltd. produces certain evidences they are required to be considered on their own merits without rejecting them on purely technical grounds. In view of the aforesaid, we restore the issues arising in the present appeal to the learned Commissioner (Appeals) for deciding afresh after considering the evidences submitted by the assessee. Needless to mention, the learned Commissioner (Appeals) must afford reasonable opportunity of being heard to the assessee before deciding the issue.
In the result, assessee’s appeal is partly allowed for statistical purposes. Order pronounced in the open Court on 21.02.2018