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Income Tax Appellate Tribunal, DELHI BENCH “F”, NEW DELHI
Before: SHRI R. K. PANDA & SMT. BEENA A. PILLAI
O R D E R
PER R. K. PANDA, AM :
This appeal filed by the Revenue is directed against the order dated 30.04.2013 of the CIT(A)- XVII, New Delhi relating to assessment year 2008-09.
Facts of the case, in brief, are that the assessee is a company and filed its return of income on 31.03.2009 declaring income of Rs.5,43,360/-. The case was selected for scrutiny by issue of statutory notices. The Assessing Officer issued a questionnaire to the assessee along with the notice u/s 142(1) asking the assessee to file certain details. In absence of any reply from the side of the assessee, the Assessing Officer completed the assessment u/s 144 of the I.T. Act by making the following additions :-
(i) Fresh unsecured loans raised Rs. 1,60,000/- (ii) In the absence of bills and vouchers of fixed assets Rs. 1,43,940/- (iii) Provisions made Rs. 9,41,541/- (iv) Advance recoverable in cash or kind Rs.37,98,852/- (v) Advance from customer and sundry creditors Rs.63,64,998/- (vi) Net income from business as discussed in order Rs. 9,39,921/-
Before the ld. CIT(A), the assessee filed detailed submissions along with various details. Ld. CIT(A) called for remand report from the Assessing Officer and after confronting the same to the assessee deleted the addition on account of Rs.1,60,000/- on account of unsecured loan, Rs.1,43,940/- on account of purchase of fixed asset and Rs.62,37,001/- on account of unverifiable sundry creditors.
Aggrieved with such order of the ld. CIT(A), the Revenue is in appeal before the Tribunal by raising the following grounds :-
“1. The Ld. CIT(A) has erred in law and on facts of the case in deleting the following additions accepting the additional evidences under Rule 46A of the Income Tax Rules, 1962 filed by the assessee during the appellate proceedings even after objection of the assessing officer in her report dated 07.02.2011: a) Addition of Rs.1,60,000/- on account of unsecured loan; b) Addition of Rs.1,43,940/- on account of purchase of fixed asset; c) Addition of Rs.62,37,001/- on account of unverifiable sundry creditors; 2. The appellant craves to be allowed to add any fresh grounds of appeal and/or delete or delete or amend any of the grounds of appeal.”
We have considered the rival arguments made by both the sides and perused the material available on record. We have also considered the various case laws cited before us.
So far as deletion of Rs.1,60,000/- which was made by the Assessing Officer on account of unsecured loan is concerned, we find although no confirmation was filed before the Assessing Officer during the assessment proceedings, however, before the ld. CIT(A), the assessee filed the confirmations from Mr. Neeraj Choudhary, Mrs. Parwati Rathore and Mr. O.P.
Rathore which were forwarded to the Assessing Officer for his comments. We find the Assessing Officer in her report dated 07.02.2011 has not objected to the confirmation letters for which the ld. CIT(A) after considering the confirmations had deleted the addition. Therefore, we find no infirmity in the same.
Accordingly, the same is upheld and the ground raised by the Revenue on this issue is dismissed.
So far as deletion of Rs.1,43,940/- added by the Assessing Officer on account of purchase of fixed assets is concerned, we find the assessee during the assessment proceedings did not produce the details relating to the fixed assets.
Before the ld. CIT(A), the assessee filed the details of the bills of purchase of the items, the details of which are as under :- i. A.C. Rs.34,500/- ii. Computer Rs.90,000/- iii. Printer Rs.11,440/- iv. SMS Modern Rs.8,000/- Rs.1,43,940/-
It was argued that the assessee had claimed depreciation on these assets.
However, the Assessing Officer instead of disallowing the depreciation has made addition of purchase fixed assets due to non-production of bills.
The ld. CIT(A) called for a remand report from the Assessing Officer and no objection was made by the Assessing Officer in the remand report. The ld. CIT(A) accordingly deleted the disallowance so made by the Assessing Officer.
Under these circumstances, we find no infirmity in the order of the ld. CIT(A) whose powers are coterminous with that of the Assessing Officer in deleting the disallowance made by the Assessing Officer. Accordingly, the same is upheld and the ground raised by the Revenue on this issue is dismissed.
So far as deletion of Rs.62,37,001/- on account of unverifiable sundry creditors is concerned, we find the ld. CIT(A) while deleting the addition has given the following observations :-
“9.1 The AO had made an addition of Rs.63,64,998/- and the confirmation was filed for Rs.62,17,406/-. The confirmation filed alongwith the appeal papers was forwarded to the AO by the then CIT(A) on 30.02.2011 and the AO had furnished her report on 07.02.2011. As she had not objected to the confirmation letter now filed, there is no reason to sustain the addition of Rs.62,17,406/- made by the AO. The balance amount includes telephone expenses payable of Rs.7,245/- and the appellant had filed the confirmation for Rs,12,350/- being commission payable during the appellate proceedings. The remaining amount of Rs.47,986/- is commission payable and Rs.80,011/- is expenses payable and no confirmation was filed for these amounts even during the appellate proceedings, Therefore, the addition of Rs.1,27,997/- made by the AO is sustained. The appellant gets a relief of Rs.62,37,001/- (62,17,406 + 7,245 + 12,350) and as a result this ground No. 12 is partly allowed.”
It is an admitted fact that the ld. CIT(A) has called for a remand report from the Assessing Officer. There was no objection from the side of the Assessing Officer. As mentioned earlier the powers of the ld. CIT(A) are coterminous with that of the Assessing Officer. Under these circumstances and in view of the detailed reasoning given by the ld. CIT(A), we do not find any infirmity in his order. Accordingly, the same is upheld and the ground raised by the Revenue on this issue is dismissed.
So far as the order of the ld. CIT(A) in accepting the additional evidences in violation of Rule 46A of the Income Tax Rules is concerned, we are of the considered opinion that when the powers of the ld. CIT(A) are coterminous with that of the Assessing Officer and when he has given adequate opportunity to the Assessing Officer to verify and give a report, therefore, under these circumstances, merely because the Assessing Officer has objected to the same, the same cannot be a ground for not accepting the additional evidences. It is the duty of the ld. CIT(A) to go through the various details filed before him or her and give an opportunity to the Assessing Officer to give his/her comment in shape of a remand report. In the instant case, the assessee while requesting for admission of additional evidences had given justifiable reasons as to how and why the assessee was prevented by sufficient causes from producing these documents/details before the Assessing Officer. There is no comment from the side of the Assessing Officer as to how the application of the assessee before the ld. CIT(A) under Rule 46A is wrong or incorrect. Therefore, merely because the Assessing Officer objected to such evidences without giving clear cut reasons and under which provision such additional evidences filed show that the ld. CIT(A) should not admit the same is missing. We, therefore, do not find any reason as to why such additional evidences should not have been accepted by the ld. CIT(A). Since the Revenue could not bring any material to our notice regarding the inadmissibility of such additional evidences and since the ld. CIT(A) has given adequate opportunity to the Assessing Officer to file a remand report on the basis of such additional evidences, therefore, this ground by the Revenue is dismissed.
In the result, the appeal filed by the Revenue is dismissed. Order pronounced in the open Court on this 23rd February, 2018.