ITO 16(1)(1), MUMBAI vs. CHAITANYA KIRAN SHANTARAM, MUMBAI

Per Manoj Kumar Aggarwal (Accountant Member) 1. The captioned appeal by revenue for Assessment Year [AY] 2011- 12 contest the order of Ld. Commissioner of Income-Tax (Appeals)-4 [CIT(A)], Mumbai, Appeal No.CIT(A)-4/Tr.347/Appeal-(3)/ITO- 11(1)(4)/2014-15 dated 16/03/2016. The assessment for impugned AY was framed by Ld. Income Tax Officer 11(1)(4), Mumbai [AO] u/s 143(3)

ITA.No.4292/Mum/2016 Chaitanya Kiran Shantaram Assessment Year 2011-12 of the Income Tax Act,1961 on 26/03/2014. The revenue has raised the following effective Grounds of Appeal:-

1. On the facts and circumstances of the case and in law, whether the Ld. CIT(A) was justified in directing to delete the addition of Rs.1 Crore made u/s.68 of Income-tax Act,1961 by admitting additional evidence in course of the appellate proceedings without granting an opportunity to the Assessing Officer, which is in violation of Rule 46A of the Income-tax Rules,1962.

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

2. Fact, in brief, are that the assessee being resident individual engaged as event organizer was assessed at Rs.103.48 Lacs as against returned loss of Rs.2.44 Lacs e-filed by the assessee on 30/03/2013. During assessment proceedings, it was noted that the assessee received advance of Rs.1 Crores from an entity namely Naisha & Co. and subsequently paid an advance tax of Rs.20 Lacs on various dates out of the said advance. It was further noted that the assessee utilized the advance partly for purchase of motorcar and partly towards advancement of certain loan. To confirm the advance, notice u/s 133(6) was issued to the lender but no satisfactory reply was received against the same. Accordingly, the said advance was treated as unexplained cash credit u/s 68 and added to the income of the assessee.

3. Aggrieved, the assessee contested the same with success before Ld. CIT(A) vide impugned order dated 16/03/2016 where the assessee pointed out that the said advance was received by the assessee against production of a Marathi Film titled as ‘Diary’ which could not be produced due to enhancement of the cost. Satisfied with assessee’s explanation, Ld. CIT(A) deleted the impugned addition. Aggrieved, the revenue is in further appeal before us.