M/S. SHRUTI FASTNERS LTD.,NEW DELHI vs. DCIT, NEW DELHI

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ITA 1947/DEL/2013Status: DisposedITAT Delhi03 March 2017AY 2009-107 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the additional evidence filed by the assessee before the CIT(A) was essential for rendering justice. Consequently, the Tribunal admitted the additional evidence and set aside the issues in dispute to the Assessing Officer (AO) for a fresh examination.

What were the facts?

The assessee appealed against an order of the CIT(A) concerning assessment year 2009-10. The primary issue was the addition of Rs. 10,70,987/- on account of loans, and the CIT(A) had also made an enhancement of Rs. 2,21,013/-. The assessee contended that the CIT(A) failed to provide an effective opportunity for hearing and wrongly disallowed additional evidence filed under Rule 46A.

What were the issues?

Whether the CIT(A) erred in not admitting additional evidence filed under Rule 46A and whether the addition and enhancement to the income were justified without proper examination of the evidence.

Which sections of the Income-tax Act were involved?

Section 68,Section 234B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘G’ NEW DELHI

Before: SHRI H. S. SIDHU & SHRI PRASHANT MAHARISHI

ORDER PER H.S. SIDHU, JM This appeal is filed by assessee against the Order dated 28.2.2011 passed by the Ld. CIT(A)-XI, New Delhi relating to Assessment Year 2009-10 on the following grounds:-

“1. That the Ld. CIT(A) has erred on facts and under the law in not admitting the additional evidence as filed before her.

2. That the addition of Rs. 10,70,987/- as made by the AO towards the assessable

income of the appellant on account of loans being illegal and unjustified on the facts of the case, ought to have been deleted by the Ld. CIT(A).

Various observations made by the authorities below in their respective orders are either incorrect or untenable. Detailed written submissions alongwith the paper book as filed before the Ld. CIT(A) and the arguments advanced by the Counsel had not been appreciated properly or had been ignored.

3. That without prejudice to ground no. 2

above, the addition of Rs. 10,70,987/- is very excessive.

4. That the Ld. CIT(A) had erred on facts

and under the law in making enhancement to the income assessed by the AO by Rs. 2,21,013/-. In other words, the total additions made amounting to Rs. 12,92,000/- is illegal and at any rate, without prejudice very excessive.

5. That the interest as levied u/s. 234B is illegal and at any rate, without prejudice very

excessive.

6. That the appellant reserves its right to add, amend / modify the grounds of appeal.

2.

Facts narrated by the revenue authorities are not disputed by both the parties, hence, the same are not repeated here for the sake of brevity.

3.

At the time of hearing, Ld. Counsel of the Assessee, draw our attention towards the impugned order dated 10.3.2014 especially the proceedings of hearing conducted by the Ld. First Appellate Authority, as mentioned in the impugned order and stated that the Ld. First Appellate Authority has not provided effective opportunity of hearing to the assessee. He further stated that assessee has filed the Application under Rule 46A of the I.T.

Rules, 1962 alongwith the additional evidences, which was sent to the AO vide letter dated 10.7.2012 for his comments. In compliance to the same, the AO sent his Remand Report, who has not sent his comments and Ld. CIT(A) mentioned in his order that since no report has been received from the AO, he did not propose to delay the proceedings further and first taken up the issue of admissibility of additional evidence. Ld. Counsel of the assessee further stated that Ld. CIT(A) has wrongly observed that several opportunities were provide to the assessee to give complete details, but assessee could not give full details to the AO and finally held that since no reasons have been given for not giving complete details at the time of assessment proceedings, he did not admit the additional evidence filed under Rule 46A. In this regard, in this case neither the AO has sent his comments on the Remand Report, nor the Ld. CIT(A) has admitted the additional evidence filed under Rule 46A which goes to the root of the matter and are very essential to decide the issue in dispute.

Ld. Counsel for the assessee further stated that assessee has filed the Paper Book containing pages 1 to 3 in which he has attached the copy of submission dated 9.7.2012 filed before the Ld. CIT(A); copy of submission dated 10.1.2011 filed before DCIT, Circle 8(1), New Delhi during assessment proceedings; details of unsecured loans taken by the assessee during FY 2008-09 alongwith the income tax return filing proofs of the lenders, their duly confirmed copies of accounts and their bank statements; copies of ledger accounts of TDS on interest and interest on unsecured loans; copies of form 26AS as downloaded from departmental website of M/s Extreme Holdings Pvt. Ltd. And M/s Pranav Securities Pvt. Ltd; Copy of Annexure C to the tax audit report for AY 2009-10; copy of judgment of Hon’ble Delhi High court in the case of CIT-V, vs. Npar Drugs Pvt. Ltd. (ITA No. 4/Del/2008); copy of notice of enhancement dated 14.2.2013 issued by CIT(A)-XI; reply dated 26.2.2013 filed by the assessee in response to the enhancement notice issued by CIT(A)-XI. He also draw our attention towards the contention of the Application under Rule 46A of the I.T. Rules, 1962 alongwith the additional evidences filed by the assessee mentioned in the Paper Book establishing for fulfilling the requirements of the provisions under section 68 of the I.T. Act, 1961. He requested that the addition in dispute may be cancelled and or in the alternative the issue in dispute may be set aside to the AO to decide the same, after thoroughly examination of the additional evidences filed by the assessee before the Ld. CIT(A) alongwith Application u/r. 46A.

4.

On the contrary, Ld. DR relied upon the order passed by the Ld. CIT(A) and stated that assessee was given sufficient opportunity for substantiating his claim, but he could not avail the same. Therefore, the order of the authorities below especially the impugned order may be upheld and appeal of the assessee may be dismissed.

5.

We have heard both the parties and perused the records, especially the impugned order passed by the Ld. CIT(A). After examining the impugned order alongwith additional evidences filed by the assessee u/r. 46A of the I.T. Rules, 1962 in shape of Paper Book containing pages 1 to 33, as mentioned in para no. 4 above, we are of the considered view that the evidences filed by the assessee before the Ld. CIT(A) are very much essential to render the justice to the parties. Therefore, the additional evidences filed by the assessee alongwith Application u/s. 46A of the I.T. Rules, 1962 are admitted. After examining the additional evidences filed by the assessee, we are of the view that these evidences requires thorough examination at the level of the AO. Therefore, we set aside the issues in dispute to the file of the AO. The AO is directed to examine the additional evidences and other documents and decide the issue in dispute afresh, under the law, after giving adequate opportunity of being heard to the assessee.

6.

In the result, the appeal filed by the assessee stands allowed for statistical purposes.

Order pronounced in the Open Court on 03/03/2017.

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