What did the Tribunal hold?

The Tribunal held that the CIT(A) ought to have allowed the filing of additional evidence to verify the genuineness of the fresh capital. Since the evidence was not admitted, the matter was set aside and restored to the Assessing Officer for a fresh decision.

The assessee firm introduced fresh capital of Rs. 6,91,167/- by a partner. Due to non-participation in assessment proceedings, this amount was added to the total income. The assessee sought to submit additional evidence before the CIT(A) to prove the genuineness of the capital introduction, but it was refused.

What were the issues?

Whether the CIT(A) erred in refusing to admit additional evidence regarding fresh capital introduction by a partner.

M/S. Deepak Motors, Ghaziabad vs ITO | ITAT Delhi 2018

Income Tax Appellate Tribunal, DELHI BENCHES : B : NEW DELHI

Before: SHRI R.S. SYAL & MS SUCHITRA KAMBLE

For Respondent: Ms Ashima Neb, Sr. DR

Hearing: 26.02.2018Pronounced: 27.02.2018

Date of Hearing : 26.02.2018 Date of Pronouncement : 27.02.2018 ORDER PER R.S. SYAL, VP: This appeal filed by the assessee is directed against the order passed by the CIT(A) on 24.12.2014 in relation to the assessment year 2011-12.

The only issue raised in this appeal is against non-admission of additional evidence in respect of fresh capital introduced by the partner amounting to Rs.6,91,167/-.

Briefly stated, the facts of the case are that a fresh capital of Rs.6.91 lac was introduced by Smt. Meera Sarin, partner of the assessee firm. Since the assessee did not participate in the assessment proceedings due to one reason or the other, which led to the passing of the assessment order u/s 144 of the Act, the said amount of the fresh capital was added to the total income. The assessee furnished additional evidence before the ld. CIT(A) in support of the genuineness of the fresh capital introduced by the partner.

The ld. CIT(A) refused to admit the same. That is how the addition came to be confirmed.

We have heard the ld. DR and perused the relevant material on record.

There is no appearance from the side of the assessee despite notice. It is seen that the assessee could not appear before the Assessing Officer and that is the reason for the making of addition of Rs.6.91 lac on account of fresh capital contribution by Smt. Meera Sarin. The assessee argued before the ld. CIT(A) that there were reasons beyond its control for putting in appearance 2

Assessing Officer and adduced necessary evidence in support of such addition to the capital. In our considered opinion, the ld. CIT(A) ought to have allowed the filing of additional evidence to judge the genuineness or otherwise of fresh capital. Since such additional evidence has not been admitted, we are of the considered opinion that the ends of justice would meet adequately if the impugned order is set aside and the matter is restored to the file of the Assessing Officer. We order accordingly and direct the Assessing Officer to decide this issue afresh, after allowing a reasonable opportunity of being heard to the assessee. Needless to say, the assessee will be at liberty to lead any fresh evidence in support of fresh contribution of capital.

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

The order pronounced in the open court on 27.02.2018.

M/S. DEEPAK MOTORS,GHAZIABAD vs. ITO, GHAZIABAD

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