What did the Tribunal hold?

The Tribunal admitted the additional evidence, finding that the AO made inquiries behind the assessee's back without proper investigation. The issue was set aside to the AO for fresh adjudication.

The assessee, an LIC agent, had his income significantly increased by the AO. The First Appellate Authority granted partial relief, leading to the assessee's appeal. The assessee sought to admit additional evidence to prove a third party's sale of machinery and declaration of capital gains.

What were the issues?

Whether additional evidence should be admitted to prove a third party's transactions and whether the AO's assessment was based on proper inquiry.

Man Mohan Garg, New Delhi vs ITO | ITAT Delhi 2017

Income Tax Appellate Tribunal, DELHI BENCH ‘SMC-3’, NEW DELHI

Before: SHRI J. SUDHAKAR REDDY

Appellant by : Sh. C.S.Anand, C.A. Respondent by : Sh. Anil Sharma, Sr.D.R. ORDER

This is an appeal filed by the assessee directed against the order of the Ld. Commissioner of Income Tax (Appeals)-19, New Delhi dt. 23.01.2015 pertaining to the assessment year (A.Y.) 2009-10.

Facts in brief:- The assessee is an LIC agent and filed his return of income on 26.3.2010 declaring total income of Rs.1,47,940/-. He earns a commission for mediating in sale of machinery. The Assessing Officer (A.O.) passed an order under section 143(3) on 29.12 2011 determining the income at Rs.23,89,940/-.

2.1. On appeal the First Appellate Authority granted part relief. Aggrieved the assessee is in appeal before me.

Sh. Man Mohan Garg, New Delhi 3. The assessee moved an application under rule 29 of ITAT Rules,1963 seeking admission of additional evidence which are as follows. (i) computation of income along with relevant enclosures of Shri Ramesh Chand Gupta for the assessment year (A.Y.) 2009-10. (ii) The assessee submits that these documents prove that Sh. Ramesh Chander Gupta of M/s RS Electricals has sold machines for Rs.18 lakhs and declared short term capital gain of Rs.1,97,377/- (Rs.18,00,000 (-) Rs.16,05,623) and that he had also paid income tax on the same. He submits that this return of income and the intimation issued by the department u/s 143(1) of the Act shows that Shri Ramesh Chander Gupta is the sole Proprietor of M/s R.S. Electricals.

The Ld.Counsel for the assessee submitted that the A.O. had conducted enquiry behind the back of the assessee and came to a wrong conclusion that M/s R.S.Electricals has not filed its income tax returns. It was submitted that neither the A.O. nor the Ld.CIT(A) directed the assessee to file any of these documents and hence these could not be obtained from the third party and filed. He prayed that these additional evidences may be admitted.

The Ld.D.R. on the other hand relied on the order of lower authorities.

Sh. Man Mohan Garg, New Delhi 6. After hearing rival contentions I find that this is a fit case for admission of additional evidence, as the assessing officer has made enquiries behind the back of the assessee and has made addition without proper enquiries. Thus I admit the additional evidence. I set aside the issue to the file of the assessing officer for fresh adjudication in accordance with law.

In the result the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the Open Court on 05th January, 2017.

MAN MOHAN GARG,NEW DELHI vs. ITO, NEW DELHI

What did the Tribunal hold?

What were the facts?

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