ITO, NEW DELHI vs. SHRI JAGMEET SINGH BARAR, GURGAON

ORDER PER H.S. SIDHU : JM

The Revenue has filed the Appeal and Assessee has filed the Cross Objection against the Order dated 23.12.2013 of the Ld. CIT(A)-XXVI, New Delhi relevant to assessment year 2009-10.

2. The grounds raised in the Revenue ‘s Appeal read as under:-

1. On the facts and circumstances of the case, the Ld.

CIT(A) has erred in facts and in law by admitting the additional evidences during the appellate proceedings under Rule 46A despite the fact that none of the conditions laid down in Rule 46A are applicable to the case.

2. The Ld. CIT(A) has erred in deleting the additions of Rs.

51,80,000/- made by the AO during the assessment proceedings on account of income from undisclosed sources u/s. 69 of the Act.

3. The Ld. CIT(A) has erred in accepting the contention of the assessee that the sale proceeds of agricultural land

belonging to mother of the assessee was received by the assessee in the absence of documentary evidence in the form of a will or gift deed etc.

4. That the appellant craves for the permission to add,

delete or amend the grounds of appeal before or at the time of hearing of appeal.

3. The grounds raised in the Assessee’s Cross Objection read as under:-

of the case, Ld. CIT(A) has erred in law and on facts in confirming the addition to the extent of Rs. 6,20,000/- out of total addition of Rs. 58,00,000/- on account of deposits in bank account.

action of the ld. CIT(A) in confirming the addition to the extent of Rs. 6,20,000/- out of total addition of Rs.

58,00,000/- on account of deposits in bank account is bad in law and against the facts and circumstances of the case.

of the case, Ld. CIT(A) has erred in law and on facts in observing that capital gain on sale of lands requires investigation and thereafter taxed as per law and further observed that wealth tax also appears leviable on these lands and further erred in directing the AO to pass on the information to the AO of Smt. Jagdish Kaur, more so when there is no such powers conferred under the law.

4. That the cross objector craves the leave to add,

amend, modify, delete any of the ground(s) of cross objection before or at the time of hearing.

Rs. 25,50,807/- withdrawal of cash

Rs. 34,00,000/- sale of agricultural land (ancestral)

Rs. 5,75,000/- Agricultural income 4.1 As per the assessment order the assessee has not filed any evidence supporting his explanation especially for the sale of agricultural land. Secondly, the AO also found from the Bank Statement of the assessee that mature proceeds of FDRs created to his account includes the amount of interest also which has also not been declared as income of the assessee as his income in his return of income which amounting to Rs. 2,92,799/-. Finally the AO has completed the assessment by making the addition of Rs. 58 lacs as income from undisclosed sources u/s. 69 of the I.T. Act and Rs. 2,93,691/- as income from other sources and completed the assessment u/s. 143(3) of the I.T. Act on 28.12.2011.

He further stated that on the basis of the AIR information, the AO called the explanation from the assessee regarding cash deposit of Rs. 63,45,000/- in the Bank account of the assessee, but in response to the same the assessee explained that Rs. 25,50,807/- is a withdrawal of cash; Rs. 34 lacs is a sale from ancestral agricultural land and Rs. 5.75 lacs as agricultural income. Ld. DR further stated that assesse has not filed any evidence supporting his explanation before AO and the AO has rightly made the addition of Rs. 58 lacs u/s. 69 of the Act and Rs. 2,93,691/- as income from other sources and completed the assessment. He further stated that in Appeal filed by the assessee, the Ld. CIT(A) has deleted the addition in dispute by accepting the additional evidences under Rule 46A of the Income Tax Rules, 1962, despite the fact that none of the conditions laid in Rule 46A of the Income Tax Rules, 1962 are applicable to the case of the assessee. He further stated that no opportunity. For verifying the additional evidence has been given to the AO by the Ld. CIT(A) and he has wrongly admitted the additional evidence and deleted the addition in dispute. He requested that the issue in dispute may be set aside to the AO to examine the additional evidences filed by the assessee before the Ld. CIT(A) and decide the issue in dispute afresh, as per law, after giving opportunity to the assessee for substantiating his case.

Therefore, the assesee has filed the detailed submissions alongwith 7 sale deeds of agricultural land from which a sum of Rs. 52,07,500/- was received and assessee has also filed Cash Flow Statement alongwith the details submissions as well as Medical Certificate of Doctor stating that Smt. Jagdish Kaur mother of the assessee was a serious patient of DEMEMTIA since last 6-8 years.

He further submitted that the assessee being the Legal Heir is looking after his mother and keep the sale consideration with him which later on was deposited in the bank. Since the evidence were not submitted before the AO, therefore, these evidences were filed before the Ld. CIT(A) as additional evidence which was sent to the AO for Remand Report. He requested that there is no violation of any condition of Rule 46A of the Income Tax Rules, 1962, hence, the issue raised by the Revenue in the Appeal regarding not following the condition during appellate proceedings under Rule 46A of the Income Tax Rules, 1962 may be dismissed.

“Production of additional evidence before the [Deputy Commissioner (Appeals)] [and Commissioner (Appeals)].

46A. (1) The appellant shall not be entitled to produce before the [Deputy Commissioner (Appeals)] [or, as the case may be, the Commissioner (Appeals)], any evidence, whether oral or documentary, other than the evidence produced by him during the course of proceedings before the [Assessing Officer], except in the following circumstances, namely :

(a) where the [Assessing Officer] has refused to admit evidence which ought to have been admitted ; or (b) where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to produce by the [Assessing Officer] ; or (c) where the appellant was prevented by sufficient cause from producing before the [Assessing Officer] any evidence which is relevant to any ground of appeal ; or (d) where the [Assessing Officer] has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal.

(2) No evidence shall be admitted under sub-rule (1) unless the [Deputy Commissioner (Appeals)] [or, as the case may be, the Commissioner (Appeals)] records in writing the reasons for its admission.

(3) The [Deputy 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 8[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.

(4) Nothing contained in this rule shall affect the power of the [Deputy Commissioner (Appeals)] [or, as the case may be, the Commissioner (Appeals)] to direct the production of any document, or the examination of any witness, to enable him to dispose of the appeal, or for any other substantial cause including the enhancement of the assessment or penalty (whether on his own motion or on the request of the [Assessing Officer]) under clause (a) of sub-section (1) of section 251 or the imposition of penalty under section 271.]”

9.1 After going through the order passed by the revenue authorities as well as the condition as laid down under Rule 46A of the Income Tax Rules, 1962, as reproduced above, we find that as per the information from AIR, there is a cash deposit of Rs. 63,45,000/- in the State Bank of India, Sansad Marg, New Delhi. Assessee explained about the deposit that he has cash withdrawal of Rs. 25,50,807/-; Rs. 34,00,000/- from sale of agricultural land (ancestral) and Rs. 5,75,000/- from Agricultural income. But in 9 support his contention, the assessee has not filed any evidence before the AO, in spite of the requests of the AO. Secondly, the AO has also asked the assessee about the credit of interest of FDR in his bank statement amounting to Rs. 2,92,799/- which the assessee has not shown in his return of income. No explanation has been given by the assessee in this regard before the AO and AO has no alternative except to complete the assessment as per law and hence, he completed the assessment u/s. 143(3) of the I.T. Act on 28.12.2011. Aggrieved with the order of the assessment order dated 28.12.2011, assessee filed the appeal before the Ld. CIT(A) and Ld. CIT(A) vide his impugned order vide para no. 4.1 at page no. 3 to 4 has stated that the one and only one issue involved in the present appeal i.e. regarding the deposit amounting to Rs. 58 lacs which has been taxed by the AO u/s. 69 of the I.T. Act. But there is another issue of interest on FDR of Rs. 2 ,92,799/- which has not shown in the return of income also. No doubt that as per impugned order the assessee has filed the additional evidences before the Ld. CIT(A) alongwith submission as well as 7 sale deeds of land from which a sum of Rs. 52,07,500/- was received by the assessee and the Ld. CIT(A) has admitted the additional evidences and deleted the addition on the basis of the additional evidence which has not been properly confronted to the AO and opportunity of thoroughly examination of the same has also not been given by the Ld. CIT(A) to the AO. It is pertinent to mention here that the Revenue has raised 4 grounds of appeal challenging the impugned order and argued especially the ground no. 1 challenging the additional evidences filed by the assessee during the appellate proceedings u/r. 46A of the Income Tax Rules, 1962, but the assessee has not filed all the additional evidences i.e. 7 sale deeds of land from which the assesseee has received Rs. 52,07,500/- before this Bench. Assessee has also not filed any Remand Report dated 5.8.2013 for perusal of the Bench and taken the issue in dispute very lightly when the Department has challenged the admission of additional evidence under Rule 46A of the Income Tax Rules, 1962. This Bench has right to examine the additional evidence filed by the assessee under Rule 46A of the Income Tax Rules, 1962 before Ld. First Appellate Authority which has not been filed by the assessee for supporting the order of the Ld. CIT(A). Therefore, in the interest of justice, we are of the considered view that the Ld. CIT(A) has deleted the addition in dispute on the basis of the additional evidences filed by the assessee which has been challenged by the Revenue in ground no.

1. We are of the view that the action of the Ld. CIT(A) in admitting these additional evidences is contrary to the conditions as laid down under Rule 46A of the Income Tax Rules, 1962. Assessee has not established before us that the AO has refused to admit the additional evidence which ought to be admitted by the AO. Assessee has also not established that assesee is prevented by sufficient cause for producing the additional evidence before the AO. After going through the assessment records, we have also seen that AO has given opportunity to the assessee for producing the evidence supporting the claim of the assessee, but the assessee has failed to avail the same and the AO has competed the assessment as per law. Keeping in view of the facts and circumstances as explained above, we are of the considered view that the additional evidences filed before the Ld. CIT(A) needs to be thoroughly examined at the level of the AO. Therefore, we set aside the issues in dispute to the file of the AO for fresh consideration, after thoroughly examining the additional evidences filed by the assessee before the Ld. CIT(A). As a result, the appeal filed by the Revenue stands allowed for statistical purposes.

10. As regards, the Asseessee’s Cross Objection is concerned, since we have already set aside the issues to the file of the AO for fresh consideration, after considering the additional evidences, hence, the Cross Objection filed by the Assessee has become infructuous and dismissed as such.

Order pronounced in the Open Court on 09/01/2017.