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Income Tax Appellate Tribunal, BANGALORE BENCH C, BANGALORE
Before: SHRI. ABRAHAM P. GEORGE & SHRI. VIJAYPAL RAO
IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'C', BANGALORE BEFORE SHRI. ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI. VIJAYPAL RAO, JUDICIAL MEMBER (Assessment Year : 2005-06) Asst. Commissioner of Income tax, Circle -7 (1), Bangalore .. Appellant v. M/s. Quantum Power Systems, No.408, I floor, 3rd cross, Singayanapalya, Mahadevapura Post, Bangalore 560 048 .. Respondent PAN : AAAFQ0307Q Assessee by : Shri. Cyrus Jal Bharucha, CA Revenue by : Shri. Sunil Kumar Agarwala, JCIT Heard on : 27.08.2015 Pronounced on : 04.09.2015 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER :
In this appeal filed by Revenue, its grievance is that CIT (A) allowed relief of Rs.1,03,60,961/- to the assessee considering fresh evidence filed by assessee before him, thereby violating Rule 46A of the IT Rules, 1962 (‘the Rules’ in short).
Assessee a manufacturer of HHC power products, filed its return of income for the impugned assessment year declaring income of 40,72,940/-.
ITA.804/Bang/2014 Page - 2 During the course of assessment proceedings it was noted by the AO that assesse had shown sundry creditors of Rs.90,84,970/- and unsecured loan of Rs.15,50,000/- in its balance sheet. Assessee was required to give details of these. However it seems though assessee produced letters of the sundry parties it did not give their address. As per the AO the assessee had failed to give full address of the parties, and there was no way he could verify the genuineness of the claim. AO held that assessee had failed to discharge the onus resting on him to prove the genuineness of the creditors. An addition of Rs.90,84,970/- was made. Assessee’s appeal before the CIT (A) was successful.
After considering the letters from the creditors which as per the CIT (A) proved subsequent payments made to the creditors by the assessee, he allowed assessee’s appeal.
Now before us, Ld. DR strongly assailing the order of CIT (A) submitted that records filed by the assessee before the CIT (A) were never filed before the AO. According to him there was violation of Rule 46A of the Act.
Per contra, Ld. AR supported the order of CIT (A).
We have perused the orders and heard the rival contentions. On a perusal of the assessment order, we find that the assessee had failed to produce the details called by the AO with regard to the sundry creditors, but for giving their names. Therefore the AO was justified in taking a view that assessee was unable to show the genuineness of the balances. CIT (A) had taken cognisance of the letters and addresses of the creditors submitted before him by the ITA.804/Bang/2014 Page - 3 assessee, and also those details which were submitted by the assessee during the assessment proceedings for A. Y. 2009-10 for coming to a conclusion that the addition was not warranted. We are of the opinion that AO was not given a fair opportunity to verify the materials produced by the assessee before the CIT (A). CIT (A) was bound by Rule 46A to call for a report from the AO before accepting the fresh records filed by the assessee. We are therefore of the opinion that the matter requires a fresh look by the AO. We set aside the order of CIT (A) and remit the issue back to the file of AO for consideration afresh in accordance with law.
In the result, appeal of the Revenue is allowed for statistical purpose.
Order pronounced in the open court on 4th day of September, 2015.