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Order u/s.254(1)of the Income-tax Act,1961(Act) लेखा सद�य,राजे�� के अनुसार लेखा सद�य राजे�� के अनुसार /Per Rajendra,AM:- लेखा सद�य लेखा सद�य राजे�� के अनुसार राजे�� के अनुसार Challenging the order,dt.17/08/2015 of CIT(A)-22, Mumbai the Assessing officer(AO) has filed the present appeal.Assessee,a private limited company,filed its return of income on 26/09/2009,declaring total income of Rs.2.21 crores.The AO completed the assessment on 25/02/2015,u/s. 143(3) r.w.s. 147 of the Act,determining its income at Rs.4.05 crores.
Effective Ground of appeal is about deleting the addition of Rs.1.83 crores made by the AO under the head unexplained expenditure, u/s.69C of the Act.During the reassessment proceedings the AO directed the assessee to file reconciliation about the professional fee as appearing in Form 26AS and as shown in the P&L account.He observed that the assessee had shown profitability of Rs.3.89 crores whereas as per Form No.26AS it had received Rs.4.76 crores during the year under appeal.Vide its letter,dated 07/02/15,the assessee submitted that it had shown professional fee against the gross receipt,that an amount of Rs.1.83 crores was netted off on account of professional fee paid and that the balance amount (including service tax of Rs.47.97 lakhs )of Rs.3.89 crores was credited in the books of account. However, the AO held that a true and correct picture of the company was not reflected in its audited P&L account, that it had not shown the gross professional fee of Rs.5.22 crores) and total payment (Rs.1.83 crores) in the P&L account ,that receipts totaling to Rs.1.83 crores were appearing in the books of account (he made disallowance of Rs.1.83
5139/M/15(09-10) M/s. Eskayem Consultants Pvt.Ltd.
Crores invoking provisions of section 69C of the Act and held that the assessee had not filed confirmation from parties, that genuineness of fee paid by the assessee remained doubtful, that the credit worthiness of the party was not proved,that it had not attached bank statements, that the legitimacy of the transactions remained untrue, that the claim made by the assessee for incurring the expenses remained doubtful,that the same were not supported by vouchers / invoices bills.
3.Aggrieved by the order of AO assessee preferred an appeal before the First Appellate Authority(FAA)and made elaborate submissions and it also relied upon certain case laws. After considering the available material,the FAA held that the assessee was not given an opportunity to explain as to why the addition on account of unexplained expenditure should not be made,that the principles of natural justice were violated , that the AO had wrongly invoked the provisions of section 69C, that the AO had not afforded an opportunity to the assessee to file vouchers/invoices/bills/receipts. Finally, he deleted the addition made by the AO.
4.Before us, the Departmental Representative (DR) stated that the assessee had not furnished necessary details before AO, that FAA had passed a cryptic and non-speaking order,that claiming deduction on account of incurring of expenditure the assessee had to produce reliable evidences. The Authorised Representative (AR) supported the order of the FAA and stated that all the necessary information was furnished during course of assessment proceed - ings, that no opportunity was given to prove its claim.
5.We have heard rival submissions and perused the materials available on record. We find that the assessee had not produced documents appearing at Sl.No.2,3,7 of PB before AO , whereas same was furnished during appellate proceedings .The FAA has not mentioned anything about the request made by assessee to produce additional evidences or acceptance of same by him.Thus,these evidences were never examined by AO. The FAA has co- terminus power with AO, so, either he should have examined the evidences or should have called for remand report from the AO. We find that order passed by him is non speaking .In our opinion,matter needs further verification.Therefore,in the interest of justice,we are remitting back the issue to the file of AO for fresh adjudication He is directed to afford a reasonable opportunity of hearing to the assessee before finalizing the assessment.Effective Ground of appeal is decided in favour of the AO in part.