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Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR
Before: SHRI V. DURGA RAO & SHRI K.M. ROY, ACCOUNTANT, MEMBER
Date of Hearing – 10/09/2024 Date of Order – 18/09/2024
O R D E R PER K.M. ROY, A.M.
The present appeal has been filed by the Revenue challenging the impugned order dated 05/10/2023, passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2018–19.
In its appeal, the Revenue has raised following grounds:– “1. Whether on the facts and in the circumstances of the ease and in law the Ld.CIT(A), NFAC was justified in deleting the addition without appreciating the fact that during the course of the assessment proceedings, the assessee failed to produce complete evidences and reply in support of his claim.
2. Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A), NFAC was justified in accepting the additional evidences which 2 Jayant Umakant Mamidwar ITA no.387/Nag./2023 were not produced before the AO and in which the Ld.CIT(A) had not recorded reasons for admission as required in rule 46A (1) & (2) of I.T. Rules 1962.
3. Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A), NFAC was justified in accepting the additional evidences filed before CIT(A) only without allowing the AO a reasonable opportunity as prescribed in rule 46A(3) of I.T. Rules 1962.
4. Any other grounds which may be raised at the time of hearing with the permission of Hon'ble ITAT.”
Facts in Brief:– The assessee has filed return of income on 31/10/2018 and declared a total income of ` 79,23,080. The case was selected for limited scrutiny under CASS and the assessment was completed under section 143(3) read with sections 143(3A) & 143(38) of the Income-tax Act, 1961 (“the Act”) by passing order dated 24/03/2021. The Assessing Officer after considering the submissions of the assessee on 24/02/2021, sought the explanation / documents in order to support the increased capital made by the assessee during the year. According to the Assessing Officer, since the assessee could not provide the required documents, the Assessing Officer concluded the assessment by stating that the assessee could not furnish credit evidence to substantiate the claim of increased capital for the receipt of share of profit from partnership firm by submitting Firm’s Balance Sheet, ledger Account, return of income, etc., and also failed to highlight the relevant transaction in the bank account statement of the assessee. Accordingly, the assessment was concluded by the Assessing Officer making an addition of ` 4,61,17,232, under section 68 of the Act on account of unexplained credit on the issue of increased share capital during the year under consideration.
The learned CIT(A) held that the Assessing Officer did not find any specific fault with reference to the details/evidences submitted by the 3 Jayant Umakant Mamidwar ITA no.387/Nag./2023 assessee before the Assessing Officer about the receipt of agriculture income, gift received from the his father and also the dividend received from the companies on account of his shareholding. The learned CIT(A) observed that with reference to the receipt of share of profit from partnership firm, the Assessing Officer stated that the assessee did not substantiate the said receipt by way of submitting firm's Balance Sheet, Ledger account, ITR, Confirmation of the Firm and also fails to highlight the relevant transaction in the bank account statement of the assessee, whereas, the assessee has submitted before the Assessing officer about the details of capital account of the assessee appearing in the books of the firms namely M/s.Balaji Properties, and M/s. Gajanan Construction Co., and also the audited balance sheet of M/s. Gajanan Construction, showing the assessee debit balance in current account to show that the assessee erred in including the liability of ` 2,64,75,203, of partnership firm in the head of Proprietor's Capital thereby increasing the capital figure instead of crediting to Sundry Creditors. Accordingly, the learned CIT(A) held that the assessee has discharged his duties before the Assessing Officer by providing the details / evidences of the receipt for the increased capital during the year. The Revenue, being aggrieved, is in appeal before the Tribunal.
We have given a thoughtful consideration to the arguments made by the rival parties and perused the material available on record. We find that the assessee has filed copies of the following documents in addition to the documents / evidences submitted before the Assessing Officer in support of his contention.
4 Jayant Umakant Mamidwar ITA no.387/Nag./2023
“4.8 During the course of appeal proceedings, the appellant has also submitted the copies of the following documents in addition to the documents/ evidences submitted before the AO in support of his contention: a) Extracts of the extent of Agriculture land holding showing the crop cultivated. b) Donor (Father's) Bank account substantiating the payments of two cheques and third party cheque received on sale of property by the appellant's father. c) ITR, Computation of tax, Tax Audit Report & Financial Statement of the firms from where the appellant received his profit of shares viz., M/s. Balaji Properties and M/s. Gajanan Construction Co. for claiming exemption u/s 10(2A) of the Act d) AGM Notice, List of Shareholders, Dividend working and DDT schedule of company, ROI filed for relevant AY.
We find that the additional evidences have not been remanded back to the Assessing Officer for verification. Thus, there is a clear cut violation of Rule-46A r/w section 250(4) of the Act. Accordingly, we set aside the impugned order passed by the learned CIT(A) and restore the entire matter to the file of the Assessing Officer for denovo adjudication in accordance with law. Thus, all the grounds raised by the Revenue are allowed for statistical purposes.
In the result, appeal filed by the Revenue is allowed for statistical purposes. Order pronounced in the open Court on 18/09/2024