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Income Tax Appellate Tribunal, “K” BENCH, MUMBAI
Before: SHRI RAJENDRA & SHRI SAKTIJIT DEY
आयकर अपीऱीय अधिकरण, म ुंबई न्यायपीठ ‘के’ म ुंबई IN THE INCOME TAX APPELLATE TRIBUNAL “K” BENCH, MUMBAI श्री राजेंद्र, ऱेखा सदस्य एवुं श्री शक्तिजीि दे, न्याययक सदस्य के समक्ष BEFORE SHRI RAJENDRA, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER आयकर अऩीऱ सं. / ITA no. 4717/Mum./2015 (ननधधारण वषा / Assessment Year : 2006–07) Income Tax Officer …….………. अऩीऱधथी / Ward–9(2)(3), Aayakar Bhawan Appellant 101, M.K. Road, Mumbai 400 020 v/s M/s. Cosmos Brand Distributors Pvt. Ltd. 7th Level, Aryston Centre ..…….………. प्रत्यथी / Opp. J.W. Marriott Hotel Respondent Juhu Road, Juhu, Mumbai 400 049 PAN – AABCC6856G रधजस्व की ओर से / Revenue by : Shri Sujit Banger ननधधाररती की ओर से / Assessee by : Shri Lalchand Choudhary सुनवधई की तधरीख / आदेश घोषणध की तधरीख / Date of Hearing – 20.10.2016 Date of Order – 28.10.2014 आदेश / ORDER शक्तिजीि दे, न्याययक सदस्य के द्वारा / PER SAKTIJIT DEY, J.M.
Captioned appeal at the instance of the Revenue is directed against the order dated 29th May 2015, passed by the learned Commissioner (Appeals)–16, Mumbai, for assessment year 2006–07.
2 M/s. Cosmos Brand Distributors Pvt. Ltd.
Brief facts are, the assessee an Indian company filed its return of income for the impugned assessment year on 30th November 2006, declaring loss of ` 2,14,46,185. The assessee is engaged in the trading of cosmetic and perfume and providing beauty treatment service. As observed by the Assessing Officer in the assessment order, despite issuance of several statutory notices, neither any one appeared on behalf of the assessee nor produced the information / details called for. Therefore, the Assessing Officer proceeded to complete the assessment on the basis of material available on record and made various additions, one amongst being addition of ` 6,66,62,990 on account of unexplained unsecured loans. Against the assessment order so passed, assessee preferred appeal before the first appellate authority and being unsuccessful there, the assessee went in further appeal before the Tribunal. The Tribunal in a common order passed for the assessment year 2005–06 and 2006–07 restored the matter back to the file of the learned Commissioner (Appeals) for denovo adjudication on merits. In pursuance to the direction of the Tribunal, the learned Commissioner (Appeals) has passed impugned order deleting the addition of ` 6,66,62,990. Being aggrieved, the Revenue is in appeal before us on the following grounds:
– “1. On the facts and in the circumstances of the case and in law, the learned Commissioner (Appeals) erred in directing the Assessing Officer to delete the addition of ` 6,66,62,990 on 3. M/s. Cosmos Brand Distributors Pvt. Ltd. account of unproved unsecured loans without appreciating the facts that assessee was not able to furnish the loan confirmations with PAN or ledger account copies even after giving ample opportunity.
2. On the facts and in the circumstances of the case and in law, the learned Commissioner (Appeals) erred in deleting the addition of ` 6,66,62,990 on account of unproved unsecured loans by admitting the additional evidences without following the procedure given in rule 46A(3) and asking the Assessing Officer to examine these evidences or to produce any evidence or documents in rebuttal of the additional evidences produced before the CIT(A).
3. The specific grievance of the Revenue as articulated by the learned Departmental Representative is, in the course of assessment proceedings, the assessee neither appeared before the Assessing Officer in spite of several opportunities being granted to him nor produced any evidence to prove the genuineness of the unsecured loans. He submitted, before the first appellate authority, the assessee appeared and produced additional evidence in support of the loan transaction and the first appellate authority on considering such additional evidence, granted relief to the assessee without either confronting those additional evidence to the Assessing Officer or giving him an opportunity to have his “say” on the issue. He, therefore, submitted, the admission of additional evidence being in violation of provisions of rule 46A(3), the order of the learned Commissioner (Appeals) should be set aside.
Learned Authorised Representative on the other hand submitted before us that the impugned order of the learned Commissioner 4 M/s. Cosmos Brand Distributors Pvt. Ltd. (Appeals) is in pursuance to the direction of the Tribunal, wherein, the Tribunal has directed the learned Commissioner (Appeals) to decide the issue on merits after affording reasonable opportunity of being heard to the assessee and also to produce necessary evidence. He, therefore, submitted, there is no violation of provisions of rule 46A.
We have considered the submissions of the parties and perused the material available on record. On a perusal of the assessment order it is evident that in the course of assessment proceedings, the assessee neither appeared nor produced information / details called for by the Assessing Officer to prove the genuineness of the unsecured loans. However, before the first appellate authority, the assessee produced certain additional evidences to prove the genuineness of unsecured loans. It is also not disputed that after considering such additional evidence, the learned Commissioner (Appeals) deleted the addition. It is clear from the facts and material on record that after admitting the additional evidences, the learned Commissioner (Appeals) did not follow the mandate of rule 46A(3) by extending an opportunity to the Assessing Officer to examine the additional evidences submitted by the assessee and submit the remand report. This fact has not been controverted by the learned Authorised Representative also. On a perusal of the order of the Tribunal, we have noted the Tribunal while restoring the matter back to the learned 5 M/s. Cosmos Brand Distributors Pvt. Ltd. Commissioner (Appeals), vide order dated 2nd June 2014, in M/s. Cosmos Brands Distributors Pvt. Ltd. v/s DCIT, Mum./2011, had observed as under:– “7. We have heard both the parties and their contentions have carefully been considered. From the affidavit it is clear that there was some dispute going on amongst family members and as per affidavit now the members of the family are on speaking terms. Keeping in view all these facts, we are of the opinion that the matter should be restored back to the file of Ld.CIT(A) with a direction to re-adjudicate both these appeals on merits after giving the assessee a reasonable opportunity of hearing and also after giving opportunity to the assessee to place on record all the material and evidences required for proper adjudication of the issues raised in both the appeals. We direct accordingly.
On a careful reading of the aforesaid findings of the Tribunal, we do not find any observations / direction to the learned Commissioner (Appeals) to admit additional evidences and decide the issue without following the mandate of rule 46A(3). It is salutary principle of rule of natural justice that no issue should be decided against a party without giving him an opportunity of being heard. The same principle of law has been ingrained also in rule 46A(3). Therefore, the learned Commissioner (Appeals), though, is empowered to admit additional evidence submitted by assessee in the course of proceedings before him, however, the provisions of rule 46A(3) requires him to allow opportunity to the Assessing Officer to examine these additional evidences and offer his comments. This mandatory requirement of law having not been fulfilled by learned Commissioner (Appeals), we are 6 M/s. Cosmos Brand Distributors Pvt. Ltd. inclined to set aside the impugned order of the first appellate authority and restore the matter back to his file for denovo adjudication after due opportunity of being heard to the assessee. The learned Commissioner (Appeals) should also allow opportunity to the Assessing Officer to examine the additional evidences submitted by the assessee and offer his comments / views, if any, on them and only thereafter the learned Commissioner (Appeals) should decide the issues raised by the assessee on merits.