INCOME-TAX OFFICER 41(2)(1), MUMBAI vs. AJIT SAKHARAM CHAVAN, MUMBAI

3 & 1921 /Mum/2024 Ajit Sakharam Chavan 5. Brief facts of the case are that assessment was completed under section 143(3) of the Act and the addition was made U/s 68 of the Act unsecured loan amount of Rs.5,40,000/- received from M/s Sai Transport and from M/s Vighnaharta Developers, Rs.5,80,99,000/- which works out total amount to Rs. 5,86,39,000/- and treated it as unexplained cash credit. As the assesee was not able to offer satisfactory explanation, the tax was calculated under section 115BBE of the Act. Aggrieved, assessee filed an appeal before the CIT(A). Before the CIT(A), the assessee filed the additional evidence under Rule 46A of Income- tax Rules, 1962 (in brevity, ‘theRule’). The remand report was called for but after allowing several dates, the concerned Assessing Officer was not able to submit the remand report. The Ld.CIT(A) completed the appeal proceedings and allowed the grounds of the assessee. Being aggrieved on the appeal order, the revenue filed an appeal before us.

The Appellant has filed all the necessary documents concerning the lender during the assessment proceedings which clearly establish identity, credit worthiness and genuineness of the transactions with them. Whatever documentary evidences were filed on record, AO did not make any efforts to summon the lender and no efforts were made by the AO to verify the documents. There is no finding by the AO that materials filed before him were untrustworthy. No evidence has been brought on record to suggest that amounts given by the lender actually emanated from the coffers of the Appellant so as to render the amount of loans given by the lender as undisclosed income of the Appellant Company. Instead the AO has preferred to make irrelevant and untrue remarks about the bank statements of the lender which are of no help to him as the AO is simply groping in dark. AO has lost sight of the fact that judiciary requires higher burden of proof from Revenue to show that the money emanated from the coffers of the Appellant The appellant has further quoted Rule 46 A of the I.T rules and certain case laws to consider his appeal on merit and based on material placed on record and the evidences provided in support of his grounds of appeal

. Though the case may be treated as falling under sub clause (iii) and (iv) of Rule

46. A. However, following the principal of natural justice the remand report was requisitioned from the Ld. A.O after providing the documentary evidence submitted by the appellant for his comments. The various dates on which remand reports were requisitioned have been enumerated in tabular form which are as under: Remand report requisition:-

Considering the fact that despite requisitioning of remand report in this case by giving several opportunities as tabulated above the Ld. AO has failed to provide the same the request of the appellant for deciding his appeal on the basis of merit and material placed on record/evidences is accepted and the appeal is decided accordingly. The instant appeal related to the addition of unsecured loan taken by the appellant during the AY under consideration, which were added back to the total income on account of non-furnishing of documents/replies by the loan creditors, in response to the notices issued u/s 133(6) and 131 of the IT Act, 1961.”

Rule 46A. Production of additional evidence before the [Joint Commissioner] (Appeals)] [and Commissioner (Appeals) (3) The [Joint Commissioner] (Appeals)] [or, as the case may be, the Commissioner (Appeals)] shall not take into account any evidence produced under sub-rule (1) unless the [Assessing Officer] has been allowed a reasonable opportunity— (a) to examine the evidence or document or to cross-examine the witness produced by the appellant, or (b) to produce any evidence or document or any witness in rebuttal of the additional evidence produced by the appellant.

In appeal order it is perused that the assessee was not able to supply requisite documents before the Ld.AO for his satisfaction. Accordingly, the assessee filed the additional evidence before the Ld.CIT(A) which remains unverifiable. None of the revenue authorities had completed the verification from their end. The issue is entirely factual. The Ld.DR vehemently argued and placed that the Ld.CIT(A) without proper verification passed the order which is unjustified and liable to be quashed. Considering the issue, we set aside the appeal order and remit the matter to the file of the ld. CIT(A). It is to be directed to the Ld.AO to complete the remand proceedings of the assessee and the remand report should be issued immediately for quick completion of the appeal proceedings.We are not expressing any view on the merit of the case which will impair the appeal 7 & 1921 /Mum/2024 Ajit Sakharam Chavan proceedings. Needless to say, the assessee should get a reasonable opportunity of hearing before the Ld.CIT(A) in set aside proceeding. (A.Y. 1916-17) 8. The facts and circumstances of this appeal are identical to the one decided above, therefore, the decision arrived at therein, shall apply mutatis mutandis to this appeal also.