THE ITO, DHAR vs. SHRI SHAILENDRA KUMAR JAISWAL, DHAR

आदेश /O R D E R

PER O.P. MEENA, ACCOUTANT MEMEBR. This appeal is filed by the Revenue against the order of

ld. Commissioner of Income-tax (Appeals)-I, Indore [hereinafter

I.T.A.No. 561/Ind/2016 A.Y. 2011-12 Shri Shailendra Kumar Jaiswal, Dhar Page 2 of 10

referred to as the CIT(A)] dated 26.02.2016 and pertains to

assessment year 2008-09 as against appeal decided in

assessment order passed u/s 144 of the Act dated 14.03.2014

of ITO, Dhar[hereinafter referred to as the AO].

appeal :-

CIT(A) erred in contradicting his findings that the

order u/s 144 was justified in the facts of the case,

by calling for a remand report from the AO.

CIT(A) erred in law after coming to the conclusion that

order u/s 1`44 was justified should have upheld the

assessment order where the AO had considered all

the facts of the case.

CIT(A) erred in law by allowing the appeal of the

assessee by ignoring the very fact that the assessee

was allowed ample opportunities to attend this case

I.T.A.No. 561/Ind/2016 A.Y. 2011-12 Shri Shailendra Kumar Jaiswal, Dhar Page 3 of 10

but he did not attend and the AO was compelled to

pass order u/s 144 of the Income-tax Act, 1961.

the ld. CIT(A) erred in calling for remand report even

after holding that the order passed u/s 144 of the

Income-tax Act, 1961, was justified.

CIT(A) erred in law by directing the AO to verify the

claim of deduction under chapter VIA and then

allowed the said deduction, the CIT(A) has in effect

set aside the order which is not permissible under

the Act.

assessee is an individual and derives income from liquor

business. The assessee has filed his return of income on

30.09.2011 disclosing total income at Rs. 6,90,040/-. The AO

required the assessee to furnish the details of purchase and

sales and explain the source of expenses claimed and details

of sundry creditors with confirmation. However, having been

I.T.A.No. 561/Ind/2016 A.Y. 2011-12 Shri Shailendra Kumar Jaiswal, Dhar Page 4 of 10

allowed various opportunities of being heard, the assessee has

failed to comply. Therefore, the AO was forced to make

assessment u/s 144 of the Act. Accordingly, the AO assessed

income at Rs. 1,08,13,774/- by making various additions.

before the CIT(A).

assessee has filed written submission vide letter dated

30.04.2015 and 19.10.2015, giving various details and

additional evidences. The ld. CIT(A) observed that the AO has

allowed the number of opportunities fixing the date of hearing

on 23.12.2013, 05.02.2014, but requisite details were not

furnished. Therefore, the ld. CIT(A) upheld that the sufficient

opportunity was provided to the assessee. Therefore, the AO

was justified in framing the assessment u/s 144 of the Act.

The ld. CIT(A) has also called for the comments of the AO by

way of remand report and dealt with various issues and

deleted the addition of Rs. 1 lakh of disallowances made under

Chapter VIA subject to verification. The ld. CIT(A) further

I.T.A.No. 561/Ind/2016 A.Y. 2011-12 Shri Shailendra Kumar Jaiswal, Dhar Page 5 of 10

deleted the addition of Rs. 55,19,272/- being cash deposits in

Bank account with State Bank of India after considering the

remand report and also deleted the addition of Rs. 9,09,057/-

being estimated profit. Similarly, the addition of Rs.

8,80,035/- being basic licence fee unexplained and Rs.

25,150/- being penalty debited in profit and loss account was

also came to be deleted and addition on account of sundry

creditors amounting to Rs. 7,80,000/- was restricted to Rs.

1,80,000/-. Similarly, the addition of Rs. 6 lakhs pertaining to

credit amount in the name of Phool Badan Singh was deleted

and addition of Rs. 4,96,400/- being investment for advances

for flat was also deleted.

taking the grounds that the ld. CIT(A) was not justified in

deleting the additions made by the AO, while upholding the

finding that the order u/s 144 was justified in the facts of the

case. The Ld. Sr. DR further argued that the ld. CIT(A) has

admitted the additional evidences without giving findings and

reasons for admission of the same. Therefore, the view taken

I.T.A.No. 561/Ind/2016 A.Y. 2011-12 Shri Shailendra Kumar Jaiswal, Dhar Page 6 of 10

by the ld. CIT(A) is contradictory in itself as at the same time

he is upholding the action of the AO in framing the

assessment u/s 144 of the Act and on the other hand, the

additional evidences are admitted and additions made by the

AO are being deleted on the basis of remand report. The ld. Sr.

DR has also submitted that the ld. CIT(A) has deleted the

addition of Rs. 55 lakhs being cash deposited in State Bank of

India after allowing set-off against the turnover and similarly,

the addition of Rs. 4,96,400/- being advance against flats was

deleted inspite of the AO having been reported that source of

investment cannot be verified as the assessee has not

submitted the cash book/bank reconciliation statement

inspite of repeated reminders. The ld. Sr. DR has also placed

reliance on the decision of Hon'ble Supreme Court in the case

of Jyotsna Suri vs. I.T.A.T., (2003) 179 CTR ( S.C.) 265,

wherein the Hon'ble Supreme Court has held as under :-

“2. The Tribunal has disposed of the appeal by its order

of 3rd Jan.,1997, without considering the pending

application under Rule 29 of the I.T.A.T. Rules, 1963, for

I.T.A.No. 561/Ind/2016 A.Y. 2011-12 Shri Shailendra Kumar Jaiswal, Dhar Page 7 of 10

adducing additional evidence. Obviously, that application

was required to be disposed of first before the Tribunal

heard the appeal on merits. The appellant also undertakes

to withdraw the pending application before the Tribunal

for making a reference under Section 256(1) of the Income-

tax Act, 1961, for the above purpose. In view thereof, we

direct that the Tribunal should first dispose of the

application under Rule 29 on merits and thereafter

proceed to dispose of the appeal on merits. The order

dated 3rd Jan.,1997,is, therefore, set-aside and the matter

is remitted to the Tribunal for disposal on merit in

accordance with law. The order of the High Court is set-

aside as above and the appeal is disposed of accordingly.”

may be restored to the file of the AO for examination of

additional evidence produced by the assessee after admitting

additional evidence.

of the assessee relied on the order of the CIT(A) and submitted

I.T.A.No. 561/Ind/2016 A.Y. 2011-12 Shri Shailendra Kumar Jaiswal, Dhar Page 8 of 10

that the additions have been deleted after duly considering the

remand report submitted by the AO vide letter dated

04.11.2015 and 28.01.2016. Therefore, the ld. Authorized

Representative of the assessee supported the order of the

CIT(A).

perused the material available on record. We find that the ld.

CIT(A) has upheld framing the assessment made u/s 144 of

the Income-tax Act, 1961, but on the same time, the ld. CIT(A)

has deleted all the additions made by the AO without giving

finding of admission regarding additional evidence produced

by the assessee before him. We have also gone through the

remand report and find that inspite of disallowances

pertaining to salary expenses under Chapter VIA, cash credit

of Rs. 6 lakhs in the name of Phool Badan Singh and cash

deposits of Rs. 55 lakhs in the Bank account have been

deleted on the basis of remand report favouring the assessee

and licence fee of Rs. 8,80,035/- on the basis of estimate.

However, the addition of Rs. 4,96,400/- being advance

I.T.A.No. 561/Ind/2016 A.Y. 2011-12 Shri Shailendra Kumar Jaiswal, Dhar Page 9 of 10

against flat and addition on profit estimated was deleted

without any reference of remand report. Considering these

facts, we are of the considered opinion that without recording

finding of admission of additional evidence by the assessee,

there is a procedural lacuna in the order of the ld. CIT(A).

Further, the confirmation of the framing of assessment u/s

144 of the Act and thereafter deleting the entire addition based

on general observations on the remand report. The ld. CIT(A)

was not justified in deleting the additions without recording

the finding of the admission of additional evidences in the light

of Hon'ble Supreme Court’s decision in the case of Jyotsna

Suri vs. I.T.A.T. (supra). Therefore, in the interest of justice

and fair play, we deem it necessary to set-aside the whole

issue to the file of AO to examine the additional evidences filed

by the assessee and make the fresh assessment after allowing

opportunity to the assessee. We also allow admission of

additional evidence. Consequently, the appeal of the Revenue

is set-aside. The AO will allow to furnish necessary details by

the assessee and proper opportunity of being heard.

I.T.A.No. 561/Ind/2016 A.Y. 2011-12 Shri Shailendra Kumar Jaiswal, Dhar Page 10 of 10

statistical purposes.

The order has been pronounced in open court on the

11th January, 2017.

Sd/- Sd/- (डी.ट�.गरा�सया) (ओ.पी.मीना) �या�यक सद�य लेखा सद�य (D.T.GARASIA) (O.P.MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER

�दनांक /Dated : 11thJanuary, 2017.

CPU*